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What changed in TWFG, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TWFG, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+557 added−709 removedSource: 10-K (2026-03-10) vs 10-K (2025-03-27)

Top changes in TWFG, Inc.'s 2025 10-K

557 paragraphs added · 709 removed · 381 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

76 edited+14 added−21 removed56 unchanged
Biggest changeWe are trusted by insurance carriers, offering them efficient, effective and experienced distribution on a national scale. Our twenty-plus year track record, expanding agent footprint, consistent growth and collaborative approach to managing portfolios provides our over 300 insurance carriers access to a profitable, efficient distribution channel.
Biggest changeOur twenty-five year track record, expanding agent footprint, consistent growth and collaborative approach to managing portfolios provides our over 300 insurance carriers access to a profitable, efficient distribution channel. By providing centralized insurance carrier relations, third-party administrative services and managing our network’s premium volume and commissions, we provide an easy opportunity for insurance carriers to operate with us.
Branches with annual revenues greater than $1.0 million in a geography where we currently do not have a physical location may be considered as a candidate for a Corporate Branch acquisition. Branches with less than $1.0 million in annual revenues and near another Branch are considered as candidates for acquisition by another Branch in the same geographic area.
Branches with annual revenues greater than $1.0 million in a geography where we currently do not have a physical location may be considered as a candidate for a Corporate Branch acquisition. Branches with less than $1.0 million in annual revenues and located near another Branch are considered as candidates for acquisition by another Branch in the same geographic area.
Each share of Class A Common Stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders, each share of Class B Voting Stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders and each share of Class C Common Stock initially entitles its holder to ten votes per share on all matters submitted to a vote of the stockholders.
Each share of Class A Common Stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders, each share of Class B Common Stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders and each share of Class C Common Stock initially entitles its holder to ten votes per share on all matters submitted to a vote of the stockholders.
Our founder and Chief Executive Officer, Richard F. (“Gordy”) Bunch III, a former insurance agent and executive, created TWFG with a mantra of “Built by Agents, for Agents.” He identified the frictions inherent to captive distribution and set out to build a platform with tools and support functions that could better serve independent agents looking to operate their own businesses.
Our founder and Chief Executive Officer, Richard F. (“Gordy”) Bunch III, a former insurance agent and executive, created TWFG with a mantra of “Built by Agents, for Agents.” He identified the frictions inherent to captive distribution and set out to build a platform with tools and support functions that could better serve independent agents seeking to operate their own businesses.
In connection with the IPO, TWFG Holding completed the following transactions to implement an internal reorganization (the “Reorganization Transactions”): • The Company, TWFG Holding and each of the Pre-IPO LLC Members entered into the third amended and restated TWFG Holding LLC agreement (the “TWFG LLC Agreement”), which among other items, appointed the Company as the sole managing member of TWFG Holding and modified the TWFG Holding capital structure by reclassifying the interest held by the Pre-IPO LLC Members and New Members into a single new class of non-voting common interest units (the “LLC Units”). • TWFG’s certificate of incorporation was amended and restated to, among other items, authorize the issuance of three classes of common stock: Class A Common Stock, Class B Common Stock and Class C Common Stock.
In connection with the IPO, TWFG Holding completed the following transactions to implement an internal reorganization (the “Reorganization Transactions”): 12 Table of contents • The Company, TWFG Holding and each of the Pre-IPO LLC Members entered into the third amended and restated TWFG Holding LLC agreement (the “TWFG LLC Agreement”), which among other items, appointed the Company as the sole managing member of TWFG Holding and modified the TWFG Holding capital structure by reclassifying the interest held by the Pre-IPO LLC Members and New Members into a single new class of non-voting common interest units (the “LLC Units”). • TWFG’s certificate of incorporation was amended and restated to, among other items, authorize the issuance of three classes of common stock: Class A Common Stock, Class B Common Stock and Class C Common Stock.
Partner of choice for M&A targets: In a highly fragmented industry with approximately 39,000 independent agencies and brokerages as of 2024, our objective is to stand out as a preferred partner for agencies seeking accelerated growth and succession planning. We believe that the fragmented industry landscape presents us with the opportunity to continue acquiring high-quality targets.
Partner of choice for M&A targets: In a highly fragmented industry with approximately 39,000 independent agencies and brokerages as of 2025, our objective is to stand out as a preferred partner for agencies seeking accelerated growth and succession planning. We believe that the fragmented industry landscape presents us with the opportunity to continue acquiring high-quality targets.
Our offerings also provide the opportunity to sell all lines of insurance, grow through M&A and formulate succession strategies that we believe could be mutually beneficial for the Branch principal and TWFG. We believe our differentiated value proposition makes TWFG the partner of choice for independent agents as well as captive agents looking to become independent.
Our offerings also provide the opportunity to sell all lines of insurance, grow through M&A and formulate succession strategies that we believe could be mutually beneficial for the Branch principal and TWFG. We believe our differentiated value proposition makes TWFG the partner of choice for independent agents as well as captive agents seeking to become independent.
TWFG offers a financially compelling and thoughtful pathway for agents who have built stable Books of Business and are contemplating long-term succession planning. To facilitate succession planning, we offer TWFG Agencies that are Branches or MGA Agencies the ability to sell their Books of Business to TWFG, enabling a smooth handover of Client relationships and operational responsibilities.
TWFG offers a financially attractive and thoughtful pathway for agents who have built stable Books of Business and are contemplating long-term succession planning. To facilitate succession planning, we offer TWFG Agencies that are Branches or MGA Agencies the ability to sell their Books of Business to TWFG, enabling a smooth handover of Client relationships and operational responsibilities.
Also available on the Company’s website are the Company’s Code of Ethics and Business Conduc t (“Code of Ethics”), Whi stleblower Policy, as well as the charters of the audit and compensation committees. Information on our website or any other website is not incorporated by reference into this Annual Report and does not constitute a part of this Annual Report.
Also available on the Company’s website are the Company’s Code of Ethics and Business Conduc t (“Code of Conduct”), Whi stleblower Policy, as well as the charters of the audit and compensation committees. Information on our website or any other website is not incorporated by reference into this Annual Report and does not constitute a part of this Annual Report.
TWFG Agencies that are MGA Agencies and that sell their Books of Business to us can either become part of our Agency-in-a-Box offering or become Corporate Branches. In general, Books of Business purchased in specific locations are placed with the existing Branch in such locations.
TWFG Agencies that are MGA Agencies and that sell their Books of Business to us can either become part of our Agency-in-a-Box offering or become Corporate Branches. In general, Books of Business purchased in specific locations are placed with an existing Branch in such locations.
This foresight has positioned TWFG to benefit from a decades-long structural shift to independent agents that continues to gain momentum today. Our executive management team has an average of over 25 years of insurance industry experience and is supported by a deep bench of talented managers with extensive skillsets across operations, marketing, finance, distribution, recruiting and technology.
This foresight has positioned TWFG to benefit from a decades-long structural shift to independent agents that continues to gain momentum today. Our executive management team has an average of over 25 years of insurance industry experience and is supported by a deep bench of talented managers with extensive skill sets across operations, marketing, finance, distribution, recruiting and technology.
TWFG, Inc. was incorporated as a Delaware corporation on January 8, 2024 for the purpose of facilitating the IPO and other Reorganization Transactions described below in order to carry on the business of TWFG Holding and its consolidated subsidiaries.
Organizational structure TWFG, Inc. was incorporated as a Delaware corporation on January 8, 2024 for the purpose of facilitating the IPO and other Reorganization Transactions described below in order to carry on the business of TWFG Holding and its consolidated subsidiaries.
We believe these relationships, coupled with access to the wide range of insurance carriers and products offered by TWFG, allows TWFG Agencies to find optimal solutions for our Clients. We have a proven, experienced management team supported by a strong culture. Our cohesive management team has extensive industry experience and has successfully grown our company since our formation in 2001.
We believe these relationships, coupled with access to the wide range of insurance carriers and products offered by TWFG, allow TWFG Agencies to find optimal solutions for our Clients. We have a proven, experienced management team supported by a strong culture. Our cohesive management team has extensive industry experience and has successfully grown our company since its formation in 2001.
Through our TWFG MGA, we also provide access to admitted insurance markets, which are regulated in each state by the respective state’s government, and E&S markets, which are often inaccessible by small agencies. We offer exclusive programs in certain niches, including catastrophe-exposed property and high-value homes, within our footprint.
Through TWFG MGA, we also provide access to Admitted insurance markets, which are regulated in each state by the respective state’s government, and E&S markets, which are often inaccessible by small agencies. We offer exclusive programs in certain niches, including catastrophe-exposed property and high-value homes, across our regional footprint.
We focus on agencies that enhance our capabilities and that can be integrated in the TWFG ecosystem. Our M&A strategy entails crafting a compelling value proposition for agencies, including a robust operational backbone, a wide array of insurance products and markets, a collaborative culture that values individual legacies and the opportunity for long-term growth.
We focus on agencies that enhance our capabilities and that can be integrated in the TWFG ecosystem. Our M&A strategy entails crafting an attractive value proposition for agencies, including a robust operational backbone, a wide array of insurance products and markets, a collaborative culture that values individual legacies and the opportunity for long-term growth.
In states having file-and-use laws, the insurer does not have to wait for the regulator’s approval to use a rate, but the rate must be filed with the regulatory authority prior to being used. A use-and-file law requires an insurer to file rates within a certain 11 Table of contents period of time after the insurer begins using them.
In states having file-and-use laws, the insurer does not have to wait for the regulator’s approval to use a rate, but the rate must be filed with the regulatory authority prior to being used. A use-and-file law requires an insurer to file rates within a certain period of time after the insurer begins using them.
We also prioritize a transparent and equitable transaction process to help ensure a good relationship and alignment from the outset. Our deal structures offer payment up front, providing agency sellers certainty of payment value, while at the same time limiting our contingent liabilities or future earnout payments.
We also prioritize a transparent and equitable transaction process to help ensure a good relationship and alignment from the outset. Our deal structures offer payment up front, providing agency sellers certainty of payment value, while at the same time limiting our contingent liabilities or future earn-out payments.
See Item 1A. “Risk factors—Risks relating to intellectual property and cybersecurity” for a more comprehensive description of risks related to our intellectual property. Regulatory matters Licensing . Our business activities are subject to licensing requirements and extensive regulation under the laws of the states in which we operate.
“Risk factors—Risks relating to intellectual property and cybersecurity” for a more comprehensive description of risks related to our intellectual property. Regulatory matters Licensing . Our business activities are subject to licensing requirements and extensive regulation under the laws of the states in which we operate.
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act are made available through our website, free of charge, as soon as reasonably practical after we electronically file or furnish the reports to the Securities and Exchange Commission (“SEC”).
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the “Exchange Act”)are made available through our website, free of charge, as soon as reasonably practical after we electronically file or furnish the reports to the Securities and Exchange Commission (“SEC”).
Our solution includes an agency management system, insurance carrier access, MGA access, training, mobile technology, virtual assistants, marketing tools, agency commission processing, agency bill accounting and M&A support. Central to our best-in-class value proposition is a revenue and work sharing model that is efficient and mutually beneficial to the agents and to us.
Our solution includes an agency management system, insurance carrier access, MGA access, training, mobile technology, virtual assistants, marketing tools, agency commission processing, agency bill accounting and M&A support. Central to our differentiated value proposition is a revenue and work sharing model that is efficient and mutually beneficial to the agents and to us.
We performed diligence on the Branches that elected to be purchased in order to establish valuations, and we negotiated pricing for the acquisitions based on multiples of revenue or Adjusted EBITDA, growth rates and loss ratios of the Branches.
We performed diligence on the Branches that elected to be purchased in order to establish valuations, and we 4 Table of contents negotiated pricing for the acquisitions based on multiples of revenue or Adjusted EBITDA, growth rates and loss ratios of the Branches.
Our structured agreements with MGAs, who in turn have established agreements with leading wholesale brokers and insurance carriers, form an expansive product offering that allows us to broaden our specialty insurance product offerings. This network enhances our value proposition to insurance carriers and Clients alike and expands growth beyond personal lines products.
Our structured agreements with MGAs, who in turn have established agreements with leading wholesale brokers and insurance carriers, form an expansive product offering that allows us to broaden our specialty insurance 9 Table of contents product offerings. This network enhances our value proposition to insurance carriers and Clients alike and expands growth beyond personal lines products.
Item 1. Business Who we are We are a leading, high-growth, independent distribution platform for personal and commercial insurance in the United States. We are pioneers in the insurance industry, developing an agency model built on innovation and experience with what we believe is a more flexible approach than traditional distribution models.
Item 1. Business Who we are We are a leading, high-growth, independent distribution platform for personal and commercial insurance in the U.S. We are pioneers in the insurance industry, developing an agency model built on innovation and experience with what we believe is a more flexible approach than traditional distribution models.
S ee Note 4, “Intangible Assets” to our consolidated financial statements included elsewhere in this Annual Report for information regarding the accounting for these acquired assets and their impact on our consolidated financial condition.
S ee Note 4, “Intangible Assets and Acquisitions” to our consolidated financial statements included elsewhere in this Annual Report for information regarding the accounting for acquired assets and their impact on our consolidated financial condition.
This arrangement acts as a powerful incentive, motivating agents to broaden our Books of Business, add new business lines and emphasize Client retention. Our model not only improves agents’ income but offers a compelling built-in succession plan at fair market value that encourages long-term Client relationships, high-quality service and growth.
This arrangement acts as a meaningful incentive, motivating agents to broaden our Books of Business, add new business lines and emphasize Client retention. Our model not only improves agents’ income but, offers an attractive built-in succession plan at fair market value that encourages long-term Client relationships, high-quality service and growth.
Under the laws of most states in the United States, regulatory authorities have relatively broad discretion with respect to granting, renewing and revoking producers’, brokers’ and agents’ licenses to transact business in the state.
Under the laws of most states in the U.S., regulatory authorities have relatively broad discretion with respect to granting, renewing and revoking producers’, brokers’ and agents’ licenses to transact business in the state.
We have registered “TWFG” and “Our Policy is Caring” as trademarks in the United States. We enter into agreements with our employees, contractors, insurance carriers and other parties with whom we do business to limit access to and disclosure of our proprietary information.
We have registered “TWFG” and “Our Policy is Caring” as trademarks in the U.S. We enter into agreements with our employees, contractors, insurance carriers and other parties with whom we do business to limit access to and disclosure of our proprietary information.
This growth has been primarily driven by our ability to attract productive agents to our platform, TWFG Agencies’ success in winning new business and our ability to retain and expand renewal business. We are a profitable company with strong earnings generation and conversion of net income to Adjusted Free Cash Flow.
This growth has been primarily driven by our ability to attract productive agents to our platform, TWFG Agencies’ success in winning new business, 1 Table of contents our ability to retain and expand renewal business and our acquisition strategy. We are a profitable company with strong earnings generation and conversion of net income to Adjusted Free Cash Flow.
Any amendments to the Code of Ethics, or any waivers of its requirements for which disclosure is required will be disclosed on our website. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Any amendments to the Code of Conduct, or any waivers of its requirements for which disclosure is required will be disclosed on our website. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 13 Table of contents
The demand for our products is significant and expanding. As a distributor of these products, we compete based on reputation, Client service, industry insights, product offerings, ability to tailor our services to the specific needs of a Client and offering competitive options and services.
The demand for our products is significant and expanding. As a distributor of these products, we compete based on reputation, Client service, industry insights, product offerings, ability to tailor our services to the specific needs of a Client and offering a broad range of coverage options and services.
We believe that these persistent structural shifts, coupled with our business model, serve as tailwinds for our business and make us well-positioned to continue to benefit from the accelerating momentum toward the independent agency model. 8 Table of contents Innovation is a core tenet of our business, and we have a demonstrated ability to swiftly innovate when challenges or opportunities arise.
We believe that these persistent structural shifts, coupled with our business model, serve as tailwinds for our business and we believe we are well-positioned to continue to benefit from the accelerating momentum toward the independent agency model. Innovation is a core tenet of our business, and we have a demonstrated ability to swiftly innovate when challenges or opportunities arise.
Companies in the insurance industry and other entities may own large numbers of copyrights, trademarks and other intellectual property and proprietary rights, and these companies and entities have and may in the future request license agreements, threaten litigation or file suit against us based on allegations of infringement, misappropriation or other violations of their intellectual property and proprietary rights.
Companies in the insurance industry and other entities may own large numbers of copyrights, trademarks and other intellectual property and proprietary rights, and these companies and entities have and may in the future request license agreements, threaten litigation or file suit against us based on allegations of infringement, misappropriation or other violations of their intellectual property and proprietary rights. 10 Table of contents See Item 1A.
Intellectual property We rely on a combination of copyright, trademark, trade dress and trade secret laws in the United States and other jurisdictions, as well as confidentiality procedures and contractual restrictions, to establish and protect our intellectual property and proprietary rights, including our Book of Business. These laws, procedures and restrictions provide only limited protection.
Intellectual property We rely on a combination of copyright, trademark, trade dress and trade secret laws in the U.S. and other jurisdictions, as well as confidentiality procedures and contractual restrictions, to establish and protect our intellectual property and proprietary rights, including our Books of Business. These laws, procedures and restrictions provide only limited protection.
(“Gordy”) Bunch III, we have established a track record of creating solutions for independent agents, insurance carriers and our Clients, with sustainable growth regardless of economic and P&C pricing cycles. Our business model, developed by agents for agents, serves over 2,500 TWFG Agencies and offers a distinctive level of autonomy and entrepreneurial opportunity.
(“Gordy”) Bunch III, we have established a track record of creating solutions for independent agents, insurance carriers and our Clients, with growth regardless of economic and P&C pricing cycles. Our business model, developed by agents for agents, serves over 3,000 TWFG Agencies and offers a differentiated level of autonomy and entrepreneurial opportunity.
(as of December 31, 2024) (as of December 31, 2024) 4 Table of contents Agency-in-a-Box ( 66% of 2024 Revenue) As a turnkey solution for new Branches, we facilitate the administrative work of operating an agency, allowing agents to focus on growing their business and serving our Clients.
(as of December 31, 2025) 3 Table of contents (as of December 31, 2025) Agency-in-a-Box (62% of 2025 Revenue) As a turnkey solution for new Branches, we facilitate the administrative work of operating an agency, allowing agents to focus on growing their business and serving our Clients.
We operate through two primary offerings: (1) Insurance Services, through TWFG’s exclusive Branch agreements or what we refer to as “Agency-in-a-Box” (over 500 agencies) and through Corporate Branches (approximatel y 14 agencies) and (2) TWFG MGA (over 2,100 agencies).
We operate through two primary offerings: (1) Insurance Services, through TWFG’s exclusive Branch agreements or what we refer to as “Agency-in-a-Box” (over 550 agencies) and through Corporate Branches (approximatel y 19 agencies) and (2) TWFG MGA (over 2,750 agencies).
We offer a proven, turnkey Agency-in-a-Box solution to captive and independent agents seeking choice for Clients, expanded insurance carrier access, accelerated growth, independence and succession planning. We consider our Agency-in-a-Box offering to be one of the most compelling value propositions in the market for entrepreneurial agents.
We offer a proven, turnkey Agency-in-a-Box solution to captive and independent agents seeking choice for Clients, expanded insurance carrier access, accelerated growth, independence and succession planning. We consider our Agency-in-a-Box offering to be a differentiated value proposition in the market for entrepreneurial agents.
We have meticulously crafted our model and strategy to address the shortcomings of two distinct insurance distribution channels: (1) the captive agency channel, or agents that are part of the selling force of a particular insurance carrier and generally limited to selling insurance products from such insurance carrier and (2) the independent agency channel, or agencies that distribute insurance products from multiple insurance carriers but, depending on their size, can face difficulty in obtaining the level of insurance carrier access typically enjoyed by larger platforms like ours.
Total Written Premium ($MM) Premium CAGR: 20.0% Total Revenue ($MM) Revenue CAGR: 19.5% We have developed our model and strategy to address the shortcomings of two distinct insurance distribution channels: (1) the captive agency channel, or agents that are part of the selling force of a particular insurance carrier and generally limited to selling insurance products from such insurance carrier and (2) the independent agency channel, or agencies that distribute insurance products from multiple insurance carriers but, depending on their size, can face difficulty in obtaining the level of insurance carrier access typically enjoyed by larger platforms like ours.
We expect this dynamic to continue well into the future. While we are planning to continue to focus on our Agency-in-a-Box offering, we also expect to grow our Corporate Branches (organically or through third-party acquisitions).
While we are planning to continue to focus on our Agency-in-a-Box offering, we also expect to grow our Corporate Branches (organically or through third-party acquisitions).
Our Agency-in-a-Box offering is designed to assist independent and experienced captive agents with all of the foregoing and achieve scale and efficiency operating as a Branch. Corporate Branches ( 16% of 2024 Revenue) A portion of our branches are wholly owned by TWFG.
We design our Agency-in-a-Box offering to assist independent and experienced captive agents with all of the foregoing and achieve scale and efficiency operating as a Branch. Corporate Branches (17% of 2025 Revenue) A portion of our Branches are wholly-owned by TWFG.
We believe our approach cultivates deeper, longer-term relationships between the agent and our Client, as well as between the agent and TWFG. We also believe the brand awareness with being a public company will result in more recruiting and M&A opportunities.
We believe our approach cultivates deeper, longer-term relationships between the agent and our Client, as well as between the agent and TWFG. We also believe the brand awareness with being a public company may provide additional recruiting and M&A opportunities.
Our past acquisitions help lead to referrals and testimonials, creating a flywheel effect for new agencies considering joining TWFG, whereby the more transactions we complete, the more we have access to. Our past acquisitions have become a meaningful part of our future 10 Table of contents organic growth through integration onto our platform.
Our past acquisitions help lead to referrals and testimonials, creating a flywheel effect for new agencies considering joining TWFG, whereby the more transactions we complete, the more we have access to. Our past acquisitions have become a meaningful part of our future organic growth through integration onto our platform. We expect this dynamic to continue, although future results may vary.
Some states permit insurance agents to charge policy fees, while other states prohibit this practice. In recent years, several states considered new legislation or regulations regarding the compensation of brokers by insurance carriers. The proposals ranged in nature from new disclosure requirements to new duties on insurance agents and brokers in dealing with Clients. Rate regulation .
In recent years, several states considered new legislation or regulations regarding the compensation of brokers by insurance carriers. The proposals ranged in nature from new disclosure requirements to new duties on insurance agents and brokers in dealing with Clients. Rate regulation .
Based on revenue, we are the eighth largest personal lines agency in the United States and the 27th largest agency across all lines of business, according to the Insurance Journal’s 2024 Top 100 Property/Casualty Agencies.
Based on revenue, we are the eighth largest personal lines agency in the U.S. and the 26th largest agency across all lines of business, according to the Insurance Journal’s 2025 Top 100 Property/Casualty Agencies.
Federal law and the laws of many states also regulate disclosures and disposal of client information. Congress, state legislatures, and regulatory authorities are expected to consider additional regulation relating to privacy and other aspects of client information. Competition The insurance brokerage business is highly competitive, and numerous firms actively compete with us for clients and insurance markets.
Congress, state legislatures, and regulatory authorities are expected to consider additional regulation relating to privacy and other aspects of client information. 11 Table of contents Competition The insurance brokerage business is highly competitive, and numerous firms actively compete with us for clients and insurance markets.
As a P&C distribution company, our total P&C addressable market for Total Written Premium in the United States was approximately $968.7 billion as of 2023, according to S&P Global Market Intelligence.
As a P&C distribution company, our total P&C addressable market for Total Written Premium in the U.S. was approximately $1,050 billion as of 2025, according to S&P Global Market Intelligence.
We enjoy a close-knit, collaborative culture with a long history of internal career advancement and giving back to our community. 9 Table of contents Key elements of our growth strategy Attracting new agents to our platform : We attract a diverse mix of agents to our platform, particularly those with experience, some of whom are in the prime of their “growth years” and some of whom are interested in succession planning and eventual monetization of the business they have built.
Key elements of our growth strategy Attracting new agents to our platform : We attract a diverse mix of agents to our platform, particularly those with experience, some of whom are in the prime of their “growth years” and some of whom are interested in succession planning and eventual monetization of the business they have built.
These underwriting duties are regulated by the contract with, and underwriting guidelines established by, the insurance carriers. TWFG’s Branch principals average approximately 18 ye ars of insurance industry experience and have deep ties with their respective communities. Agents’ long-standing relationships with our Clients allow them to conduct business with an understanding of local nuances and preferences.
TWFG’s Branch principals average approximately 18 years of insurance industry experience and have deep ties with their respective communities. Agents’ long-standing relationships with our Clients allow them to conduct business with an understanding of local nuances and preferences.
For the years ended December 31, 2024 and 2023, we generated revenue of $203.8 million and $172.0 million, respectively, representing year-over-year growth of 18.4%, including Organic Revenue Growth of 14.5% year-over-year.
For the years ended December 31, 2025 and 2024, we generated revenue of $248.5 million and $203.8 million, respectively, representing year-over-year growth of 22.0%, including Organic Revenue Growth of 11.6% year-over-year.
Our compound annual growth rate, or CAGR, in Total Written Premium and total revenue for the period from January 1, 2019 through December 31, 2024 were 19.2% and 19.2%, respectively.
Our compound annual growth rate, or CAGR, in Total Written Premium and total revenue for the period from January 1, 2020 through December 31, 2025 was 20.0% and 19.5%, respectively.
We believe we offer a strong value proposition when compared to the thousands of independent agencies and captive agents across the country and that we are part of the future of insurance distribution.
We believe we offer a strong value proposition when compared to the thousands of independent agencies and captive agents across the country and that we are part of the future of insurance distribution. We embrace a simple philosophy: “Our Policy is Caring,” which is more than a motto.
For additional information related to the breakdown of revenues and for a breakdown of commission income by offering for the years ended December 31, 2024 and 2023, please see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our geographic presence Alth ough a significant portion of our business is concentrated in Texas, California and Louisiana (representing 52.5%, 16.2% and 13.9%, respectively, of our Total Written Premiums in 2024), we are licensed in all 50 states and have a physical presence i n 42 st ates and the District of Columbia across our Insurance Services and TWFG MGA offerings.
S ee Note 4, “Intangible Assets and Acquisitions” to our consolidated financial statements included elsewhere in this Annual Report for information regarding the accounting for the acquired asset. 5 Table of contents For additional information related to the breakdown of revenues and for a breakdown of commission income by offering for the years ended December 31, 2025 and 2024, please see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our geographic presence Alth ough a significant portion of our business is concentrated in Texas, California and Louisiana (representing 54.1 %, 15.2% and 12.4%, respectively, of our Total Written Premiums in 2025), we are licensed in all 50 states and have a physical presence i n 43 states and the District of Columbia across our Insurance Services and TWFG MGA offerings.
As an emerging growth company, we intend to, and may for up to five years, take advantage of specified exemptions from reporting and other regulatory requirements that are otherwise applicable generally to public companies.
As an emerging growth company, we intend to, and may for up to five years, take advantage of specified exemptions from reporting and other regulatory requirements that are otherwise applicable generally to public companies. The Company has elected to avail itself of the extended transition period for complying with new or revised accounting standards.
Until recently, we have not sought to acquire our existing Branches and instead have preferred combining an existing Branch with another Branch operating through our Agency-in-a-Box offering or with a new Branch joining the TWFG organization. 5 Table of contents TWFG MGA ( 17% of 2024 Revenue) : Through our TWFG MGA offering, we facilitate the placement of traditional and hard-to-place personal and commercial insurance risks.
Until recently, we have not sought to acquire our existing Branches and instead have preferred combining an existing Branch with another Branch operating through our Agency-in-a-Box offering or with a new Branch joining the TWFG organization.
As of December 31, 2024, TWFG Inc. owned 26.5% of TWFG Holding and the non-controlling interest holders owned the remaining 73.5% of TWFG Holding. 13 Table of contents Implications of being an emerging growth company As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Implications of being an emerging growth company As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Retail and wholesale insurance brokers facilitate the placement of P&C insurance products in the admitted insurance markets, which are regulated in each state by the respective state’s government, and E&S markets, which are often inaccessible by small agencies.
Our business As a retail and w holesale distributor, we operate within the broader P&C distribution market. Retail and wholesale insurance brokers facilitate the placement of P&C insurance products in the Admitted insurance markets, which are regulated in eac h state by the respective state’s government, and E&S markets, which are often inaccessible by small agencies.
We couple product access with tools that typically would be cost prohibitive to an independent agent, including an intuitive agency management system, scaled technology infrastructure, an integrated marketing solution and easy-to-use web and mobile application-based Client tools. These capabilities help drive efficiencies and allow Branches to focus their time on expanding their business and providing high-quality Client service.
We couple product access with tools that typically would be cost prohibitive to an independent agent, including an intuitive agency management system, scaled technology infrastructure, an integrated marketing 8 Table of contents solution and easy-to-use web and mobile application-based Client tools.
Insurance Services ( 82% of 2024 Revenue) : Branch principals have nearly 18 years of insurance industry experience, on average, with established local relationships and deep ties to their communities.
Insurance Services (79% of 2025 Revenue) : Branch pri ncipals have nea rly 18 y ears of insurance industry experience, on average, with established local relationships and deep ties to their communities.
This expansion includes the addition of insurance agents in Colorado, Connecticut, Idaho, Indiana, Missouri, Nevada, New Mexico, Oregon, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington and Wyoming. 6 Table of contents Our products The insurance products we distribute primarily consist of personal and commercial lines, including auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicles, flood, wind, event, luxury items, general liability, property, business auto, workers’ compensation, business owner policy, professional liability, commercial bonds and group benefits.
Our products The insurance products we distribute primarily consist of personal and commercial lines, including auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicles, flood, wind, event, luxury items, general liability, property, business auto, workers’ compensation, business owner policy, professional liability, commercial bonds and group benefits.
As of December 31, 2024 , our distribution platform encompassed over 500 Branches across 32 states and the District of Columbia within our Insurance Services offering and over 2,100 MGA Agencies across 42 states within our TWFG MGA offering.
As of December 31, 2025 , our distribution platform encompassed ove r 550 Branches (as defined below) across 34 states and the District of Columbia within our Insurance Services offering and over 2,750 MGA Agencies across 43 states w ithin our TWFG MGA offering.
Our employee agents receive salaries, employee benefits and bonuses for services rendered, while our non-employee agents receive commission payments. Prior to the IPO, our Branch agreements contained provisions that gave our Branches the right to be acquired by us upon completion of our initial public offering of our Class A Common Stock.
Prior to the IPO, our Branch agreements contained provisions that gave our Branches the right to be acquired by us upon completion of our initial public offering of our Class A Common Stock. We offered all of our existing Branches the opportunity to be acquired by us for consideration consisting of a combination of cash and our equity.
The operating terms may vary according to the licensing requirements of the particular state, which may require that a firm operate in the state through a local corporation. Fiduciary funds .
The operating terms may vary according to the licensing requirements of the particular state, which may require that a firm operate in the state through a local corporation. Fiduciary funds . Insurance authorities in the U.S. have also enacted laws and regulations governing the investment of funds, such as premiums and claims proceeds, held in a fiduciary capacity for others.
We seek to attract partners who come in every day with the commitment to making a difference in the lives of the people and communities we interact with. We treat our Clients, employees and stakeholders like family. Our business As a retail and w holesale distributor, we operate within the broader P&C distribution market.
This philosophy informs the way we interact with all of our stakeholders and the communities in which they live and work. We seek to attract partners who demonstrate a commitment to making a difference in the lives of the people and communities we interact with. We treat our Clients, employees and stakeholders like family.
By providing centralized insurance carrier relations, third-party administrative services and managing our network’s premium volume and commissions, we provide an easy opportunity for insurance carriers to operate with us. For certain lines of business, insurance carriers delegate underwriting duties to us, which include the authority to bind a policy within negotiated limits and criteria.
For certain lines of business, insurance carriers delegate underwriting duties to us, which include the authority to bind a policy within negotiated limits and criteria. These underwriting duties are regulated by the contract with, and underwriting guidelines established by, the insurance carriers.
In January 2024, we acquired nine of our Branches for a total purchase price of $40.8 million and converted them into Corporate Branches or employees, which was additive to our net income and Adjuste d EBITDA. Separately, in 2023, we completed five asset acquisitions in excess of $0.5 million in annual revenue for a total purchase price of $19.4 million.
In January 2024, we acquired nine of our Branches for a total purchase price of $40.8 million and converted them into Corporate Branches or employees, which was additive to our net income and Adjusted EBITDA. We review acquisition opportunities and consider whether the acquisition would be beneficial as either a Corporate Branch or a Branch operating through our Agency-in-a-Box offering.
Our average commission rate for the year ended December 31, 2024 and December 31, 2023 was approximately 12% for both periods . The commission income that we receive from insurance carriers is a significant portion of our total revenues, comprising approximately 90% and 92% of our total revenues we earned in 2024 and 2023, respectively.
The commission income that we receive from insurance carriers is a significant portion of our total revenues, comprising approximately 89% of our total revenues earned in both 2025 and 2024. Our broad carrier relationships allow us to offer diverse, competitively priced products.
Equipped with a comprehensive product portfolio, strong organizational backing and aligned incentives, TWFG Agencies are well-positioned to expand our Books of Business and penetrate new market segments, which enhances our organic growth. Clients benefit from our industry-leading mobile application, and Branches benefit from our administrative and strategic support and access to markets, which enables them to better serve our Clients.
Equipped with a comprehensive product portfolio, strong organizational backing and aligned incentives, TWFG Agencies are well-positioned to expand our Books of Business and penetrate new market segments, which enhances our organic growth. We believe TWFG is an attractive partner for insurance carriers due to our national network of experienced agents, strong distribution channels, and collaborative approach.
As of December 31, 2024, we employed approximately 293 people with 23 offices across the United States and approximately 68 people in the Philippines. W e also engage temporary employees and consultants. None of our employees are represented by unions.
As of December 31, 2025, we employed approximately 400 people across the U.S. and the Philippines and have 30 offices across the U.S. Some agents are non-employees or contractors of TWFG. W e also engage temporary employees and consultants. None of our employees are represented by unions. We offer competitive compensation and benefits programs to attract and retain top talent.
Insurance authorities in the United States have also enacted laws and regulations governing the investment of funds, such as premiums and claims proceeds, held in a fiduciary capacity for others. These laws and regulations generally require the segregation of these fiduciary funds and limit the types of investments that may be made with them. Agent and broker compensation .
These laws and regulations generally require the segregation of these fiduciary funds and limit the types of investments that may be made with them. Agent and broker compensation . Some states permit insurance agents to charge policy fees, while other states prohibit this practice.
We offer competitive compensation and benefits programs to attract and retain top talent. 12 Table of contents We believe that our commitment to protecting what matters most — our clients, communities, and stakeholders — would not be possible without the broad array of experiences and professional and personal backgrounds across our team.
We believe that our commitment to protecting what matters most — our clients, communities, and stakeholders — would not be possible without the broad array of experiences and professional and personal backgrounds across our team. Relationship with RenaissanceRe RenaissanceRe Holdings Ltd., through its wholly-owned subsidiary RenaissanceRe Ventures U.S. LLC (“RenRe”), has been an investor in the Company since 2018.
The Company has been expanding throughout the US, both through the recruitment of start-up agencies, and through strategic acquisitions.
The Company has been expanding throughout the U.S., both through the recruitment of start-up agencies, and through strategic acquisitions. In 2025, this expansion included the addition of insurance agents in Alabama, Kentucky, New Hampshire and a new MGA property program in Florida.
Also see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the impact of the acquisitions on our results of operations. We review acquisition opportunities and consider whether the acquisition would be beneficial as a Corporate Branch or a Branch operating through our Agency-in-a-Box offering.
Also see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the impact of the acquisitions on our results of operations. TWFG MGA (20% of 2025 Revenue) : Through our TWFG MGA offering, we facilitate the placement of traditional and hard-to-place personal and commercial insurance risks.
We primarily distribute personal P&C lines insurance and commercial P&C lines insurance (14.3% 3 Table of contents and 7.2% industry premium growth in 2023, respectively, according to data provided by S&P Global Market Intelligence). Based on revenue, we are the eighth largest personal lines agency in the United States, according to the Insurance Journal’s 2024 Top 100 Property/Casualty Agencies .
W e primarily distribute personal P&C lines insurance and commercial P&C lines insurance (with industry premium growth in 2025 of 12.1% and 4.0% , respectively, according to data provided by S&P Global Market Intelligence).
Commercial Lines 19% All Personal Lines 81% 7 Table of contents Commercial Lines 21% All Personal Lines 79% Commercial Lines 9% All Personal Lines 91% Our competitive strengths We have an established track record of sustainable growth regardless of economic and P&C pricing cycles.
We placed $1.7 billion of Total Written Premium in 2025 in both of our offerings and are constantly evaluating opportunities to enhance our capacity. 6 Table of contents Commercial Lines 18% All Personal Lines 82% Commercial Lines 20% All Personal Lines 80% 7 Table of contents Commercial Lines 7% All Personal Lines 93% Our competitive strengths We have an established track record of generating growth across multiple economic and P&C pricing cycles.
Relationship with RenaissanceRe RenaissanceRe Holdings Ltd., through its wholly-owned subsidiary RenaissanceRe Ventures U.S. LLC (“RenRe”), has been an investor in the Company since 2018. Jonathan Anderson is one of our directors and the Senior Vice President, Global Head - Strategic Investments of RenaissanceRe Holdings Ltd. Organizational structure The Company is the sole managing member of TWFG Holding.
Jonathan Anderson is one of our directors and the Senior Vice President, Global Head - Strategic Investments of RenaissanceRe Holdings Ltd.
We operate on a singular, integrated agency management system that equips TWFG Agencies with advanced tools for efficient Client management, policy management and communication in a cost-effective manner. We have primarily used cash flow fro m operations to improve technology, fund M&A, recruit talent, create programs and expand services to support TWFG Agencies.
We operate on a singular, integrated agency management system that equips TWFG Agencies with advanced tools for efficient Client management, policy management and communication in a cost-effective manner. We have worked with independent agents for over 25 years, building a platform that exceeded $1.7 billion of Total Written Premium for the year ended December 31, 2025 .
Removed
For the year ended December 31, 2024, we generated $28.6 million of net income, $33.0 million of Adjusted Net Income and $45.3 million of Adjusted EBITDA. 1 Table of contents Total Written Premium ($MM) Premium CAGR: 19.2% Total Revenue ($MM) Revenue CAGR : 19.2 % We have successfully worked with independent agents for over 20 years, building a platform that exceeded $1 billion of Total Written Premium in each of th e last three years.
Added
For the year ended December 31, 2025, we generated $41.2 million of net income, $50.9 million of Adjusted Net Income and $66.8 million of Adjusted EBITDA.
Removed
Branches have the ability to choose from a wide range of pro ducts and services to help customize solutions for our Clients and grow their business. Our commitment to a Client-first approach results in high customer retention in our Insurance Services offering, reinforcing TWFG’s brand reputation and our ability to recruit new agents.
Added
While much of our business is concentrated in Texas, California, and Louisiana, TWFG is licensed in all 50 states and has a physical presence in 43 states plus the District of Columbia. The Company works with over 300 carriers and 550 Branches, whose principals averag e 18 years of experience, to provide tailored solutions and broad coverage options.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

192 edited+80 added−181 removed232 unchanged
Biggest changeHowever, our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act if we take advantage of the exemptions contained in the JOBS Act.
Biggest changeWe are also required to disclose changes made in our internal control and procedures on a quarterly basis. As an emerging growth company, our independent registered public accounting firm is not required to, and does not, provide an attestation report on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act.
We cannot predict the impact that any new laws, rules or regulations may have on our business and financial results, particularly in light of potential changes implemented by the new Trump administration.
We cannot predict the impact that any new laws, rules or regulations may have on our business and financial results, particularly in light of potential changes implemented by the Trump administration.
Our access to funds under our Credit Agreements are dependent on the ability of the banks that are parties to Credit Agreements to meet their funding commitments. If we cannot obtain adequate capital or sources of credit on favorable terms, or at all, our business, results of operations, and financial condition could be adversely affected.
Our access to funds under our Credit Agreements are dependent on the ability of the banks that are parties to our Credit Agreements to meet their funding commitments. If we cannot obtain adequate capital or sources of credit on favorable terms, or at all, our business, results of operations, and financial condition could be adversely affected.
Negative public perception, adverse publicity or negative comments in social media, including as a result of actions taken by companies we acquire before the acquisition, could damage our reputation, or harm our relationships with regulators and the communities in which we operate, if we do not, or are not perceived to, adequately address these issues.
Negative public perception, adverse publicity or negative comments in social media, including as a result of actions taken by companies we acquire before acquisition, could damage our reputation, or harm our relationships with regulators and the communities in which we operate, if we do not, or are not perceived to, adequately address these issues.
Our business may be harmed if the AI we use is or alleged to be deficient, inaccurate, inappropriate, or biased, or if the AI results in the infringement of the intellectual property of third parties.
Our business may be harmed if the AI we use is or is alleged to be deficient, inaccurate, inappropriate, or biased, or if the AI results in the infringement of the intellectual property of third parties.
See “Dividend policy,” “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources.” If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Class A Common Stock, the price of our Class A Common Stock could decline.
See “Dividend policy,” and “Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources.” If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Class A Common Stock, the price of our Class A Common Stock could decline.
Our certificate of incorporation and by-laws provide for, among other provisions: • Until the Substantial Ownership Requirement is no longer met, Bunch Holdings and its Permitted Transferees (as defined in our certificate of incorporation) may designate a majority of the nominees for election to our board of directors, including the nominee for election to serve as Chairman of our board of directors; • at any time after the Majority Ownership Requirement is no longer met, there will be: 45 Table of contents • restrictions on the ability of our stockholders to call a special meeting and the business that can be conducted at such meeting or to act by written consent; • supermajority approval requirements for amending or repealing provisions in the certificate of incorporation and by-laws; • a division of the board of directors into three classes of directors, with each class as equal in number as possible, serving staggered three-year terms, and such directors may only be removed for cause and by the affirmative vote of holders of 75% of the total voting power of our outstanding shares of common stock, voting together as a single class; • our ability to issue additional shares of Class A Common Stock and to issue preferred stock with terms that the board of directors may determine, in each case without stockholder approval (other than as specified in our certificate of incorporation); • the absence of cumulative voting in the election of directors; and • advance notice requirements for stockholder proposals and nominations.
Our certificate of incorporation and by-laws provide for, among other provisions: • Until the Substantial Ownership Requirement is no longer met, Bunch Holdings and its Permitted Transferees (as defined in our certificate of incorporation) may designate a majority of the nominees for election to our board of directors, including the nominee for election to serve as Chairman of our board of directors; • at any time after the Majority Ownership Requirement is no longer met, there will be: • restrictions on the ability of our stockholders to call a special meeting and the business that can be conducted at such meeting or to act by written consent; • supermajority approval requirements for amending or repealing provisions in the certificate of incorporation and by-laws; • a division of the board of directors into three classes of directors, with each class as equal in number as possible, serving staggered three-year terms, and such directors may only be removed for cause and by the affirmative vote of holders of 75% of the total voting power of our outstanding shares of common stock, voting together as a single class; • our ability to issue additional shares of Class A Common Stock and to issue preferred stock with terms that the board of directors may determine, in each case without stockholder approval (other than as specified in our certificate of incorporation); • the absence of cumulative voting in the election of directors; and • advance notice requirements for stockholder proposals and nominations.
All of these evolving compliance and operational requirements impose significant costs that are likely to increase over time, may divert resources from other initiatives and projects and could restrict the way services involving data are offered, all of which may adversely affect our results of operations.
Evolving compliance and operational requirements impose significant costs that are likely to increase over time, may divert resources from other initiatives and projects and could restrict the way services involving data are offered, all of which may adversely affect our results of operations.
We are continually developing and investing in innovative and novel service offerings that we believe will address needs that we identify in the markets. Nevertheless, for those efforts to produce meaningful value, we are reliant on a number of other factors, some of which are outside of our control.
We are continually developing and investing in innovative service offerings that we believe will address needs that we identify in the markets. Nevertheless, for those efforts to produce meaningful value, we are reliant on a number of other factors, some of which are outside of our control.
In order to successfully expand our business, we must effectively recruit, develop and motivate new independent branches, and we must maintain the beneficial aspects of our corporate culture. We may not be able to hire new employees with the expertise necessary to manage our growth quickly enough to meet our needs.
In order to successfully expand our business, we must effectively recruit, develop and motivate new Branches, and we must maintain the beneficial aspects of our corporate culture. We may not be able to hire new employees with the expertise necessary to manage our growth quickly enough to meet our needs.
Additionally, if we cannot offer new technologies as quickly as our competitors, if our competitors develop more cost-effective technologies, or if our ideas are not accepted in the marketplace, it could have a material adverse effect on our ability to obtain and complete Client engagements.
If we cannot offer new technologies as quickly as our competitors, if our competitors develop more cost-effective technologies, or if our ideas are not accepted in the marketplace, it could have a material adverse effect on our ability to obtain and complete Client engagements.
Because the revenue we earn on the sale of certain insurance products is based on premiums and commission rates set by insurance carriers, any decreases in these premiums or commission rates, or actions by insurance carriers seeking repayment of commissions, could result in revenue decreases or expenses to us.
Because the revenue we earn on the sale of certain insurance products is based on premiums and commission rates set by insurance carriers, any decreases in these premiums or commission rates, or actions by insurance carriers, including seeking repayment of commissions, could result in revenue decreases or expenses to us.
We may be exposed to competitive risks related to the adoption and application of new technologies by established market participants (for example, through disintermediation) or new entrants such as technology companies, insurtech start-up companies and others.
Additionally, we may be exposed to competitive risks related to the adoption and application of new technologies by established market participants (for example, through disintermediation) or new entrants such as technology companies, insurtech start-up companies and others.
In addition, Bunch Holdings may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, respectively, could enhance its investment, even though such transactions might involve risks to you or may not prove beneficial.
In addition, Bunch Holdings may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you or may not prove beneficial.
For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things: (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) comply with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; (iii) provide certain disclosures regarding executive compensation required of larger public companies; or (iv) hold nonbinding advisory votes on executive compensation.
For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required 42 Table of contents to, among other things: (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) comply with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; (iii) provide certain disclosures regarding executive compensation required of larger public companies; or (iv) hold nonbinding advisory votes on executive compensation.
In addition, in recent years, private equity sponsors have invested tens of billions of dollars into the insurance sector, transforming existing players and creating new ones to compete with large brokers.
In recent years, private equity sponsors have invested tens of billions of dollars into the insurance sector, transforming existing players and creating new ones to compete with large brokers.
Moreover, cybersecurity threats are constantly evolving, which makes it more difficult to detect cybersecurity incidents, assess their severity or impact in a timely manner, and successfully defend against them.
Cybersecurity threats are constantly evolving, which makes it more difficult to detect cybersecurity incidents, assess their severity or impact in a timely manner, and successfully defend against them.
The occurrence of any security breach, cyberattack or other similar incident with respect to our or our vendors’ systems, or our failure to make adequate or timely disclosures to the public, regulators, law enforcement agencies or affected individuals, as applicable, following any such event, could cause harm to our reputation, subject us to additional regulatory scrutiny, expose us to civil litigation, fines, damages or injunctions or subject us to notification obligations or liability under applicable data privacy, cybersecurity and other laws, rules and regulations, resulting in increased costs or loss of commissions and fees, any of which could have a material adverse effect on our business, financial condition and results of operations.
The occurrence of any security breach, cyberattack or other similar incident with respect to our or our vendors’ systems, or our failure to make adequate or timely disclosures to the public, regulators, law enforcement agencies or affected individuals, as applicable, following any such event, could cause harm to our reputation, subject us to additional regulatory scrutiny, expose us to civil litigation, fines, damages or injunctions or subject us to notification 34 Table of contents obligations or liability under applicable data privacy, cybersecurity and other laws, rules and regulations, resulting in increased costs or loss of commissions and fees, any of which could have a material adverse effect on our business, financial condition and results of operations.
Pursuant to the Tax Receivable Agreement we are required to pay the other holders of LLC Units 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in TWFG Holding’s assets resulting from (a) the purchase of LLC Units from any of the other holders of LLC Units using the net proceeds from any future offering of shares of our Class A Common Stock, (b) future taxable redemptions or exchanges by the other holders of LLC Units for shares of our Class A Common Stock or cash or (c) payments under the Tax Receivable Agreement and (ii) tax benefits related to imputed interest resulting from payments made under the Tax Receivable Agreement.
Pursuant to the Tax Receivable Agreement we are required to pay the other holders of LLC Units 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in TWFG Holding’s assets resulting from (a) the purchase of LLC Units from 37 Table of contents any of the other holders of LLC Units using the net proceeds from any future offering of shares of our Class A Common Stock, (b) future taxable redemptions or exchanges by the other holders of LLC Units for shares of our Class A Common Stock or cash or (c) payments under the Tax Receivable Agreement and (ii) tax benefits related to imputed interest resulting from payments made under the Tax Receivable Agreement.
The actual increases in tax basis 43 Table of contents with respect to future taxable redemptions, exchanges or purchase s of LLC Units, as well as the amount and timing of any payments we are required to make under the Tax Receivable Agreement in respect of future taxable redemptions, exchanges or purchases of LLC Units, will vary depending on a number of factors, including the market value of our Class A Common Stock at the time of purchase, redemption or exchange, the prevailing U.S. federal income tax rates applicable to us over the life of the Tax Receivable Agreement (as well as the assumed combined state and local tax rate), the amount and timing of the taxable income that we generate in the future and the extent to which future redemptions, exchanges or purchases of LLC Units are taxable transactions.
The actual increases in tax basis with respect to future taxable redemptions, exchanges or purchases of LLC Units, as well as the amount and timing of any payments we are required to make under the Tax Receivable Agreement in respect of future taxable redemptions, exchanges or purchases of LLC Units, will vary depending on a number of factors, including the market value of our Class A Common Stock at the time of purchase, redemption or exchange, the prevailing U.S. federal income tax rates applicable to us over the life of the Tax Receivable Agreement (as well as the assumed combined state and local tax rate), the amount and timing of the taxable income that we generate in the future and the extent to which future redemptions, exchanges or purchases of LLC Units are taxable transactions.
We are highly dependent on the services of Richard F. Bunch III, our Chief Executive Officer. Although we operate with a decentralized management system, the loss of our senior managers or other key personnel, or our inability to continue to identify, recruit and retain such personnel, could materially and adversely affect our business, financial condition and results of operation.
We are highly dependent on the services of Richard F. Bunch III, our Chief Executive Officer. Although we operate with a decentralized management system, the loss of our senior managers or other key personnel, or our inability to continue to identify, recruit and retain such personnel, could materially and adversely affect our business, financial condition and results of operations.
Any changes in U.S. trade policy, including new and existing tariffs as well as other trade measures, could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for new homes or autos, material changes in the pricing of new homes or autos, limits on trade with the United States or other potentially adverse economic outcomes.
Any changes in U.S. trade policy, including new and existing tariffs as well as other trade measures, could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for new homes or autos, material changes in the pricing of new homes or autos, limits on trade with the U.S. or other potentially adverse economic outcomes.
Risks relating to our organizational structure We are a holding company and our principal ass et is ou r 26.5% ownership interest in TWFG Holding, and we are accordingly dependent upon distributions from TWFG Holding to pay dividends, if any, pay taxes, make payments under the Tax Receivable Agreement, and pay other expenses.
Risks relating to our organizational structure We are a holding company and our principal ass et is ou r 26.7% ownership interest in TWFG Holding, and we are accordingly dependent upon distributions from TWFG Holding to pay dividends, if any, pay taxes, make payments under the Tax Receivable Agreement, and pay other expenses.
We are a holding company and our principal asset is our direct ownership of 26.5% of the outstanding LLC Units. We have no independent means of generating revenue. TWFG Holding is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax.
We are a holding company and our principal asset is our direct ownership of 26.7% of the outstanding LLC Units. We have no independent means of generating revenue. TWFG Holding is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax.
As the sole managing member of TWFG Holding , TWFG Holding makes distributions to us and the other holders of LLC Units in amounts sufficient to (i) cover taxes payable by us and the other holders of LLC Units allocable to the taxable income of TWFG Holding, (ii) allow us to make any payments required under the Tax Receivable Agreement we entered into as part of the Reorganization Transactions, (iii) fund dividends to our stockholders in accordance with our dividend policy, to the extent that our board of directors declares such dividends and (iv) pay any of our expenses that are not otherwise reimbursed by TWFG Holding.
TWFG Holding makes distributions to us and the other holders of LLC Units in amounts sufficient to (i) cover taxes payable by us and the other holders of LLC Units allocable to the taxable income of TWFG Holding, (ii) allow us to make any payments required under the Tax Receivable Agreement we entered into as part of the Reorganization Transactions, (iii) fund dividends to our stockholders in accordance with our dividend policy, to the extent that our board of directors declares such dividends and (iv) pay any of our expenses that are not otherwise reimbursed by TWFG Holding.
We are susceptible to losses and interruptions caused by hurricanes (particularly in Texas, where our headquarters and several offices are located), earthquakes, power shortages, telecommunications failures, water shortages, floods, fire, extreme weather conditions, geopolitical events such as terrorist acts and other natural or man-made disasters.
We are susceptible to losses and interruptions caused by hurricanes (particularly in Texas, where our headquarters and several Branches are located), earthquakes, power shortages, telecommunications failures, water shortages, floods, fire, extreme weather conditions, geopolitical events such as terrorist acts and other natural or man-made disasters.
While we currently have no basis to expect any such challenge would be successful, if a court were to find our forum selection provision to be inapplicable or unenforceable, we may incur additional costs associated with having to litigate in other jurisdictions, which could have an adverse effect on our business, financial condition and results 46 Table of contents of operations and result in a diversion of the time and resources of our employees, management and board of directors.
While we currently have no basis to expect any such challenge would be successful, if a court were to find our forum selection provision to be inapplicable or unenforceable, we may incur additional costs associated with having to litigate in other jurisdictions, which could have an adverse effect on our business, financial condition and results of operations and result in a diversion of the time and resources of our employees, management and board of directors.
Defending or enforcing our trademark rights, branding practices and other intellectual property could result in the expenditure of significant resources and divert the attention of management, which may materially and adversely affect our business and operating results, even if such defense or enforcement is ultimately successful.
Defending or enforcing our trademark and trade secret rights, branding practices and other intellectual property could result in the expenditure of significant resources and divert the attention of management, which may materially and adversely affect our business and operating results, even if such defense or enforcement is ultimately successful.
Instead, the taxable income of TWFG Holding is allocated to the other holders of LLC Units and us. Accordingly, we incur income taxes on our allocable share of any net taxable income and partnership items of TWFG Holding . We also incur expenses related to our operations, and will have obligations to make payments under the Tax Receivable Agreement.
Instead, the taxable income of TWFG Holding is allocated to the other holders of LLC Units and us. Accordingly, we incur income taxes on our allocable share of any net taxable income of TWFG Holding . We also incur expenses related to our operations, and will have obligations to make payments under the Tax Receivable Agreement.
For example, the other holders of LLC Units may have different tax positions from us, which could influence their decisions regarding 42 Table of contents whether and when we should dispose of assets or incur new or refinance existing indebtedness, especially in light of the existence of the Tax Receivable Agreement, and whether and when we should respond to a breach of any of our material obligations under the Tax Receivable Agreement, undergo certain changes of control for purposes of the Tax Receivable Agreement or terminate the Tax Receivable Agreement.
For example, the other holders of LLC Units may have different tax positions from us, which could influence their decisions regarding whether and when we should dispose of assets or incur new or refinance existing indebtedness, especially in light of the existence of the Tax Receivable Agreement, and whether and when we should respond to a breach of any of our material obligations under the Tax Receivable Agreement, undergo certain changes of control for purposes of the Tax Receivable Agreement or terminate the Tax Receivable Agreement.
If our efforts to comply with new 49 Table of contents laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and there could be a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and there could be a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.
Regulations affecting insurance carriers with which we place business affect how we conduct our operations. Insurance carriers are also regulated by state insurance departments and are subject to reserve and other requirements. We cannot guarantee that all insurance carriers with which we do business comply with regulations instituted by state insurance departments.
Regulations affecting insurance carriers with which we place business may adversely affect how we conduct our operations. Insurance carriers are also regulated by state insurance departments and are subject to reserve and other requirements. We cannot guarantee that all insurance carriers with which we do business comply with regulations instituted by state insurance departments.
The trading price of our Class A Common Stock is likely to be volatile and subject to wide price fluctuations in response to various factors, including: • market conditions in the broader stock market in general, or in our industry in particular; • actual or anticipated fluctuations in our quarterly financial and operating results; • introduction of new products and services by us or our competitors; • issuance of new or changed securities analysts’ reports or recommendations; • investor perceptions of us and the industries in which we or our Clients operate; • low trading volumes or sales, or anticipated sales, of large blocks of our stock, including those by our existing investors; • concentration of Class A Common Stock ownership; • additions or departures of key personnel; • regulatory or political developments; • the perceived adequacy of our ESG efforts; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • litigation and governmental investigations; and • changing economic and political conditions.
The trading price of our Class A Common Stock is likely to be volatile and subject to wide price fluctuations in response to various factors, including: • market conditions in the broader stock market in general, or in our industry in particular; • actual or anticipated fluctuations in our quarterly financial and operating results; • introduction of new products and services by us or our competitors; • issuance of new or changed securities analysts’ reports or recommendations; • investor perceptions of us and the industries in which we or our Clients operate; • low trading volumes or sales, or anticipated sales, of large blocks of our stock, including those by our existing investors; • concentration of Class A Common Stock ownership; • additions or departures of key personnel; • changes in the insurance distribution market driven by technological advancements; • regulatory or political developments; • the perceived adequacy of our ESG efforts; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • litigation and governmental investigations; and • changing economic and political conditions.
Ensuring that our collection, use, retention, protection, transfer, disclosure and other processing of personal information complies with applicable laws, regulations, rules and 40 Table of contents industry standards regarding data privacy and cybersecurity in relevant jurisdictions can increase operating costs, impact the development of new products or services, and reduce operational efficiency.
Ensuring that our collection, use, retention, protection, transfer, disclosure and other processing of personal information complies with applicable laws, regulations, rules and industry standards regarding data privacy and cybersecurity in relevant jurisdictions can increase operating costs, impact the development of new products or services, and reduce operational efficiency.
Our certificate of incorporation provides that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our certificate of incorporation described above; however, our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
Our certificate of incorporation 40 Table of contents provides that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our certificate of incorporation described above; however, our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
Further, pursua nt to the Bipartisan Budget Act of 2015, f or tax years beginning after December 31, 2017, if the Internal Revenue Service (“IRS”) makes audit adjustments to TWFG Holding’s U.S. federal income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from TWFG Holding rather than from the other holders (former or current) of LLC Units directly, in which case we may economically bear a portion of such taxes (including any applicable penalties and interest) despite that we did not economically benefit from the income giving rise to such taxes.
Further, pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the Internal Revenue Service (“IRS”) makes audit adjustments to TWFG Holding’s U.S. federal income tax returns, it may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from TWFG Holding rather than from the other holders (former or current) of LLC Units directly, in which case we may economically bear a portion of such taxes (including any applicable penalties and interest) despite that we did not economically benefit from the income giving rise to such taxes.
The United States Patent and Trademark Office and various foreign trademark offices also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the trademark registration process and after a registration has issued.
Patent and Trademark Office and various foreign trademark offices also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the trademark registration process and after a registration has issued.
Our certificate of incorporation provides that, to the fullest extent permitted by law, the doctrine of “corporate opportunity” under Delaware law will only apply against our directors and officers and their respective affiliates for competing activities related to insurance brokerage activities. This doctrine will not apply to any business activity other than insurance brokerage activities.
Our certificate of incorporation provides that, to the fullest extent permitted by law, the doctrine of “corporate opportunity” under Delaware law will only apply against our directors and officers and their respective affiliates for competing activities related to insurance brokerage activities. This doctrine will not apply to any business activity 36 Table of contents other than insurance brokerage activities.
Effective intellectual property protection may not be available in every market in which we operate. Additionally, we cannot guarantee that future trademark registrations for pending or future applications will issue, or that any registered trademarks will be enforceable or provide adequate protection of our intellectual property and other proprietary rights.
Effective intellectual property protection may not be available in every market in which we operate. Additionally, we cannot guarantee that future trademark registrations for pending or future applications will issue, or that any registered trademarks will be enforceable or provide adequate protection of our intellectual property and other proprietary rights. The U.S.
Our success and ability to compete depends in part on our ability to obtain, maintain, protect, defend and enforce our intellectual property. To protect our intellectual property rights, we rely on a combination of trademark laws, copyright laws, trade secret protection, confidentiality agreements and other contractual arrangements with our affiliates, employees, Clients, strategic partners and others.
Our success and ability to compete depends in part on our ability to obtain, maintain, protect, defend and enforce our intellectual property. To protect our intellectual property rights, we rely on a combination of trademark laws, copyright laws, trade secret protection, confidentiality agreements and other contractual arrangements with our affiliates, employees, Clients, vendors and others.
Our international operations pose certain risks to our business that may be different from risks associated with our domestic operations. We have employees and other labor sources and operations in the Philippines, vendors (including third party technology providers) outside of the U.S., and we may in the future expand our operations to other countries.
Our international operations pose certain risks to our business that may be different from risks associated with our domestic operations. We have employees and other labor sources and operations in the Philippines, vendors (including technology providers) outside of the U.S., and we may expand our operations to other countries.
We actively compete with numerous integrated financial services organizations and technology companies as well as insurance carriers and brokers, producer groups, individual insurance agents, investment management firms, independent financial planners and broker-dealers. Competition may reduce the fees that we can obtain for services provided, which would have an adverse effect on revenue and margins.
We actively compete with numerous integrated financial services organizations and technology companies as well as insurance carriers and brokers, producer groups, individual insurance agents, investment management firms, 18 Table of contents independent financial planners and broker-dealers. Competition may reduce the fees that we can obtain for services provided, which would have an adverse effect on revenue and margins.
Furthermore, our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, against us or any director, officer or other employee of ours.
Furthermore, our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, against us or any director, officer or other employee of ours.
Tightening conditions in the credit markets could adversely affect the availability and terms of future borrowings or renewals or refinancing. 28 Table of contents Our credit ratings are subject to change. Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due.
Tightening conditions in the credit markets could adversely affect the availability and terms of future borrowings or renewals or refinancing. Our credit ratings are subject to change. Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due.
Moreover, any loss incurred could exceed policy limits or the Branch could lack the required insurance at the time the claim arises, in breach of the insurance requirement, and policy payments made to 34 Table of contents Branches may not be made on a timely basis.
Moreover, any loss incurred could exceed policy limits or the Branch could lack the required insurance at the time the claim arises, in breach of the insurance requirement, and policy payments made to Branches may not be made on a timely basis.
Our board of directors will determine the appropriate uses for any excess cash so accumulated, which may include, among other uses, dividends, repurchases of our Class A Common Stock, the payment of obligations under the Tax Receivable Agreement and the payment of other expenses.
Our board of directors will determine the appropriate uses for any excess cash so accumulated, which may include, among other 35 Table of contents uses, dividends, repurchases of our Class A Common Stock, the payment of obligations under the Tax Receivable Agreement and the payment of other expenses.
Furthermore, during inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense in case we decide to refinance our existing long-term borrowings, or incur any additional indebtedness. 15 Table of contents Volatility or declines in premiums or other adverse trends in the insurance industry may seriously undermine our profitability.
Furthermore, during inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense in case we decide to refinance our existing long-term borrowings, or incur any additional indebtedness. Volatility or declines in premiums or other adverse trends in the insurance industry may seriously undermine our profitability.
Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders and the federal district courts of the United States as the exclusive forum for litigation arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders and the federal district courts of the U.S. as the exclusive forum for litigation arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies, the loss of or damage to intellectual property through security breach, the loss of confidential proprietary or personal 26 Table of contents information (including sensitive personal information) through a security breach, or otherwise.
Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies, the loss of or damage to intellectual property through a security breach, the loss of confidential proprietary or personal information (including sensitive personal information) through a security breach, or otherwise.
In addition, we may not have sufficient funds to finance repayment of any of such indebtedness upon any such change of control. We may require additional debt financing in the future, which may not be available or may be available only on unfavorable terms.
In addition, we may not have sufficient funds to finance repayment of any such indebtedness upon any such change of control. 25 Table of contents We may require additional debt financing in the future, which may not be available or may be available only on unfavorable terms.
Insurance carriers may be unwilling to allow us to sell their existing or new insurance products or may amend our agreements with them, for a variety of reasons, including for competitive or regulatory reasons or because of a reluctance to distribute their products through our platform.
Insurance carriers may be unwilling to allow us to sell their existing or new insurance products or may amend our agreements with 27 Table of contents them, for a variety of reasons, including for competitive or regulatory reasons or because of a reluctance to distribute their products through our platform.
Our board of directors will consider general economic and business conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, including restrictions and covenants contained in 47 Table of contents our debt agreements, business prospects and other factors that our board of directors considers relevant.
Our board of directors will consider general economic and business conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, including restrictions and covenants contained in our debt agreements, business prospects and other factors that our board of directors considers relevant.
However, the protective steps that we undertake may be inadequate to deter infringement, misappropriation or other violations of our proprietary information or infringement of our intellectual property. In addition, we may be unable to detect the unauthorized use of our intellectual property rights.
However, the protective steps that we undertake may be inadequate to deter infringement, misappropriation or other violations of our proprietary information or infringement of our intellectual property. In addition, we may be unable to detect the unauthorized use of our 33 Table of contents intellectual property rights.
We believe our TWFG Insurance trademarks have significant value and that this and other intellectual property are valuable assets that are critical to our success. Unauthorized uses or other infringement, misappropriation or violation of our trademarks, service marks or other intellectual property could diminish the value of our brand and may adversely affect our business.
We believe our TWFG Insurance trademarks and trade secrets have significant value and that these and other intellectual property are valuable assets that are critical to our success. Unauthorized uses or other infringement, misappropriation or violation of our trademarks, service marks or other intellectual property could diminish the value of our brand and may adversely affect our business.
Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business. The occurrence of natural or man-made disasters could result in declines in business and increases in claims that could adversely affect our financial condition, results of operations and cash flows.
In addition, failure to effectively manage international operations and related risks could limit our future growth. The occurrence of natural or man-made disasters could result in declines in business and increases in claims that could adversely affect our financial condition, results of operations and cash flows.
If we fail to successfully promote and maintain our brand, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to 36 Table of contents attract new Clients or retain our existing Clients to the extent necessary to realize a sufficient return on our brand-building efforts.
If we fail to successfully promote and maintain our brand, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract new Clients or retain our existing Clients to the extent necessary to realize a sufficient return on our brand-building efforts.
We maintain confidential, personal and proprietary information relating to our company, our employees and our Clients. This information includes personal information, protected health information and financial information. We are subject to laws, regulations, rules, industry standards, contractual obligations and other legal obligations relating to the collection, use, retention, security and transfer of this information.
We maintain confidential, personal and proprietary information relating to our company, our employees and our Clients. We are subject to laws, regulations, rules, industry standards, contractual obligations and other legal obligations relating to the collection, use, retention, security and transfer of this information.
If we fail to effectively manage our hiring needs and successfully develop our Branches, our Branches’ and employee morale, productivity and retention could suffer, and our brand and results of operations could be harmed. Effectively managing our potential growth could require significant capital expenditures and place increasing demands on our management.
If we fail to effectively manage our hiring needs and successfully develop our Branches, our Branches’ and employees’ morale, productivity and 31 Table of contents retention could suffer, and our brand and results of operations could be harmed. Effectively managing our potential growth could require significant capital expenditures and place increasing demands on our management.
These developments may include: • Increased capital raising by insurance carriers, which could result in new capital in the industry, which in turn may lead to more competition and lower insurance premiums and commissions; • Increased sales of insurance by insurance carriers directly to Clients without the involvement of a broker or other intermediary; • Termination of the services of our specialties, or a change in the terms of any of these programs, including the opportunity to receive contingent commissions; • Changes in our business compensation model as a result of regulatory or competitive developments; • Federal and state governments establishing programs to provide property insurance in catastrophe-prone areas or other alternative market types of coverage that compete with, or completely replace, insurance products offered by insurance carriers; • Climate change regulation in the United States, individual states, or around the world moving us toward a low-carbon economy, which could create new competitive pressures around innovative insurance solutions; and • Increased competition from new market participants such as banks, accounting firms, consulting firms and Internet or other technology firms offering risk management or insurance brokerage services, or new distribution channels for insurance such as payroll firms.
These developments may include: • Increased capital raising by insurance carriers, which could result in new capital in the industry, which in turn may lead to more competition and lower insurance premiums and commissions; • Increased sales of insurance by insurance carriers directly to Clients without the involvement of a broker or other intermediary; • Termination of the services of our specialties, or a change in the terms of any of these programs, including the opportunity to receive contingent commissions; • Changes in our business compensation model as a result of regulatory or competitive developments; • Federal and state governments establishing programs to provide property insurance in catastrophe-prone areas or other alternative market types of coverage that compete with, or completely replace, insurance products offered by insurance carriers; • Climate change regulation in the U.S., individual states, or around the world moving us toward a low-carbon economy, which could create new competitive pressures around innovative insurance solutions; and • Increased competition from new market participants such as banks, accounting firms, consulting firms and Internet or other technology firms offering risk management or insurance brokerage services, or new distribution channels for insurance such as payroll firms. 19 Table of contents New competition as a result of these or other competitive or industry developments could cause the demand for our products and services to decrease, which could in turn adversely affect our business, financial condition and results of operations.
Given that the insurance brokerage industry has faced scrutiny from regulators in the past over its compensation practices, and the transparency and discourse to Clients regarding brokers’ compensation, it is possible that regulators may choose to revisit the same or other practices in the future.
In the past, state regulators have scrutinized the compensation practices of insurance brokers. Given that the insurance brokerage industry has faced scrutiny from regulators in the past over its compensation practices, and the transparency and discourse to Clients regarding brokers’ compensation, it is possible that regulators may choose to revisit the same or other practices in the future.
An impairment of intangible assets could have a material adverse effect on our financial condition and results of operations. As of December 31, 2024 and December 31, 2023, intangible assets represented 22.6% and 31.6%, respectively, of our total assets.
An impairment of intangible assets could have a material adverse effect on our financial condition and results of operations. As of December 31, 2025 and December 31, 2024, intangible assets represented 37.2% and 22.6%, respectively, of our total assets.
Changes in interest rates and deterioration of credit quality could reduce the value of our cash balances and adversely affect our financial condition or results. Operating funds available for corporate use were $195.8 million and $39.3 million at December 31, 2024 and December 31, 2023, respectively, and are reported in cash and cash equivalents.
Changes in interest rates and deterioration of credit quality could reduce the value of our cash balances and adversely affect our financial condition or results. Operating funds available for corporate use were $155.9 million and $195.8 million at December 31, 2025 and December 31, 2024, respectively, and are reported in cash and cash equivalents.
Our business de pends on our ability to obtain payment from insurance carriers of the amounts due to us for the work we perform.
Our business de pends on our ability to obtain payment from insurance carriers of the amounts due to us for the work we perfor m.
Pursuant to our certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the United States District Court for the District of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any current or former director, officer or other employee of ours or our stockholders, or a claim of aiding and abetting any such breach of fiduciary duty, (iii) any action asserting a claim against us or any director, officer or other employee of ours arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws (as either may be amended, restated, modified, supplemented or waived from time to time) (iv) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws (as either may be amended), (v) any action asserting a claim against us or any director, officer or other employee of ours that is governed by the internal affairs doctrine or (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL.
District Court for the District of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any current or former director, officer or other employee of ours or our stockholders, or a claim of aiding and abetting any such breach of fiduciary duty, (iii) any action asserting a claim against us or any director, officer or other employee of ours arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws (as either may be amended, restated, modified, supplemented or waived from time to time) (iv) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws (as either may be amended), (v) any action asserting a claim against us or any director, officer or other employee of ours that is governed by the internal affairs doctrine or (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL.
Errors and omissions could include failure, whether negligently or intentionally, to place coverage on behalf of Clients, to provide insurance carriers with complete and accurate information relating to the risks being insured, or to appropriately apply funds that we hold in trust.
These claims can involve significant defense costs. Errors and omissions could include failure, whether negligently or intentionally, to place coverage on behalf of Clients, to provide insurance carriers with complete and accurate information relating to the risks being insured, or to appropriately apply funds that we hold in trust.
In addition, there have been and may continue to be various trends in the insurance industry toward alternative insurance markets including, among other considerations, greater levels of self-insurance, captives, rent-a-captives, risk retention groups and non-insurance capital markets-based solutions to traditional insurance.
In addition, there have been and may continue to be industry trends toward alternative insurance markets including, among other considerations, greater levels of self-insurance, captives, rent-a-captives, risk retention groups and non-insurance capital markets-based solutions to traditional insurance, which may further reduce premium volumes.
We advise our Clients on and provide services related to a wide range of subjects and our ability to attract and retain Clients is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition and other subjective qualities.
Damage to our reputation could have a material adverse effect on our business. We advise our Clients on and provide services related to a wide range of subjects and our ability to attract and retain Clients is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition and other subjective qualities.
Even where we have effectively secured statutory protection for our trademarks and other intellectual property, our competitors and other third parties may infringe on, misappropriate or otherwise violate our intellectual property, and in the course of litigation, such competitors and other third parties may attempt to challenge the breadth of our rights or ability to prevent others from using similar marks or designs, or invalidate our intellectual property.
Even where we have effectively secured statutory protection for our trademarks, trade secrets and other intellectual property, our competitors and other third parties may infringe on, misappropriate or otherwise violate our intellectual property, and in the course of litigation, such competitors and other third parties may attempt to challenge the breadth of our rights or ability to prevent others from misappropriating our intellectual property.
The rapid evolution of emerging technologies such as AI, and any integration of AI in our or any third party’s operations, is expected to pose new or unknown cybersecurity risks and challenges.
The rapid evolution of emerging technologies such as AI, and any integration of AI in our or any third-party’s operations, poses new or unknown cybersecurity risks and challenges.
Our MGA programs are governed by contracts between us and the participating insurance carriers. These contracts establish, among other matters, the underwriting and pricing guidelines for the program, the scope of our authority and our commission rates for policies that we underwrite under the program. These contracts typically can be terminated by the insurance carrier with very little advance notice.
These contracts establish, among other matters, the underwriting and pricing guidelines for the program, the scope of our authority and our commission rates for policies that we underwrite under the program. These contracts typically can be terminated by the insurance carrier with very little advance notice.
In addition to increasing Branches’ costs and limiting the funds available to pay us contractual fees and reducing the execution of new Branch agreements, claims against us (including vicarious liability claims) divert our management resources and could cause adverse publicity, which may materially and adversely affect us and our brand, regardless of whether such allegations are valid or whether we are liable.
In addition to increasing Branches’ costs and limiting the funds available to pay us contractual fees and reducing the execution of new Branch agreements, claims against us (including vicarious liability claims) divert our management resources and could cause adverse publicity, which may materially and adversely affect us and our brand.
Such a default could result in the acceleration of repayment of our and our subsidiaries’ indebtedness, including borrowings under our Term Loan Credit Agreement (as defined below) and any amounts then outstanding under the Revolving Credit Agreement if not waived by the lenders under our Credit Agreements.
Such a default could result in the acceleration of repayment of our and our subsidiaries’ indebtedness, including borrowings under our Term Loan Credit Agreement (as defined below) and any amounts then outstanding under the Revolving Credit Agreement if not waived by the lenders under our Credit Agreements, which may negatively affect our financial condition and operating results.
Our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged Client relationships, or legal liability.
Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.
Although we have developed criteria to evaluate and screen prospective independent branches, we cannot be certain that our Branches will have the business acumen or financial resources necessary to operate successful Branches in their Branch areas.
We rely in part on our Branches and the way they operate their locations to develop and promote our business. Although we have developed criteria to evaluate and screen prospective independent branches, we cannot be certain that our Branches will have the business acumen or financial resources necessary to operate successful Branches in their Branch areas.
Restricted cash held on behalf of Clients and insurance carriers was $9.6 million and $7.2 million at December 31, 2024 and December 31, 2023, respectively, are reported as restricted cash on the balance sheet.
Restricted cash held on behalf of Clients and insurance carriers was $12.0 million and $9.6 million at December 31, 2025 and December 31, 2024, respectively, are reported as restricted cash on the Consolidated Balance Sheet.
These actions have imposed or could impose additional obligations on us with respect to our products sold. Some insurance carriers have agreed with regulatory authorities to end the payment of contingent commissions on insurance products, which could impact our commissions that are based on the volume, consistency and profitability of business generated by us.
Some insurance carriers have agreed with regulatory authorities to end the payment of contingent commissions on insurance products, which could impact our commissions that are based on the volume, consistency and profitability of business generated by us.
If one or more of these insurance carriers terminated their arrangement with us, it could result in less favorable arrangements with new insurance carriers and additional expense. For the year ended December 31, 2024 and 2023, five insurance carriers accounted fo r 44.2% and 43.1 %, respectively, of our Total Written Premium.
If one or more of these insurance carriers changes or terminates their arrangement with us, it could result in less favorable arrangements with new insurance carriers and additional expense. For the years ended December 31, 2025 and 2024, five insurance carriers accounted for 40.1% and 44.2%, respectively, of our Total Written Premium.
We are subject to taxation at the federal, state and local levels in the United States and the Philippines.
We are subject to taxation at the federal, state and local levels in the U.S. and the Philippines.
As of December 31, 2024 and December 31, 2023, our receivables for our commissions and fees were approximately $27.1 million and $19.1 million , respectively, or approximately 13.3% and 11.1% , respectively, of our total annual revenues in 2024 and 2023.
As of December 31, 2025 and December 31, 2024, our receivables for our commissions and fees were approximately $37.3 million and $27.1 million, respectively, or approximately 15.0% and 13.3%, respectively, of our total annual revenues in 2025 and 2024.
For example, in recent years, the global economic environment was characterized by persistent inflation, rising interest rates, volatility in global financial markets (leading to, among other things, a decline in equity prices), continued supply chain complications, recessionary fears, and geopolitical uncertainty, including the war between Russia and Ukraine and the war between Israel and Hamas, and these wars’ impacts on global security and markets.
For example, in recent years, the global economic environment was characterized by persistent inflation, rising interest rates, volatility in global financial markets (leading to, among other things, a decline in equity prices), continued supply chain complications, recessionary fears, and geopolitical uncertainty, including ongoing wars and military conflicts and their impacts on global security and markets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information about these risks, please see “Risk Factors—Risks relating to intellectual property and cybersecurity—Improper disclosure of confidential, personal or proprietary data, whether due to human error, misuse of information by employees or vendors, or as a result of security breaches, cyberattacks or other similar incidents with respect to our or our vendors’ systems, could result in regulatory 50 Table of contents scrutiny, legal liability or reputational harm, and could have an adverse effect on our business or operations” in this Annual Report.
Biggest changeFor more information about these risks, please see “Risk Factors—Risks relating to intellectual property and cybersecurity—Improper disclosure of confidential, personal or proprietary data, whether due to human error, misuse of information by employees or vendors, or as a result of security breaches, cyberattacks or other similar incidents with respect to our or our vendors’ systems, could result in regulatory scrutiny, legal liability or reputational harm, and could have an adverse effect on our business or operations” in this Annual Report. 45 Table of contents
In addition to this board-level oversight, our Information Technology Governance Committee (“ITGC”), a management committee, is responsible for overseeing and managing our cybersecurity risks. The ITGC includes our Chief Operating Officer, General Counsel and senior management in the technology teams, and is supported by our third-party Chief Information Security Officer (“CISO”) and Security Operations Center provider.
In addition to this board-level oversight, our Information Technology Governance Committee (“ITGC”), a management committee, is responsible for overseeing and managing our cybersecurity risks. The ITGC includes our Chief Operating Officer, Chief Technology Officer, General Counsel and senior management in the technology teams, and is supported by our third-party Chief Information Security Officer (“CISO”) and Security Operations Center provider.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Facilities Our corporate headquarters is in The Woodlands, Texas, where we lease approximately 29,000 square feet of office space under a lease that expires in 2034. We also lease office facilities in California, Illinois, Louisiana, North Carolina, Ohio, Texas and the Philippines. We believe that our facilities are adequate for our current needs.
Biggest changeItem 2. Properties Facilities Our corporate headquarters is in The Woodlands, Texas, where we lease approximately 29,000 square feet of office space under a lease that expires in 2034. We also lease office facilities in 43 states throughout the U.S.
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These offices are generally located in shopping centers, small office parks and office buildings, with lease terms expiring through the next ten years.
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While we may require additional office space as our business expands, we believe that our existing facilities are adequate to meet our needs for the immediate future, and that additional facilities will be available on commercially reasonable terms as needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently party to any material legal proceedings. Item 4. Mine Safety Disclosure Not applicable. 51 Table of contents PART II
Biggest changeWe are not currently party to any material legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 46 Table of contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn July 19, 2024, we closed our IPO in which we sold 12,650,000 shares of Class A Common Stock, including 1,650,000 shares of Class A Common Stock pursuant to the underwriters’ full exercise of their 30-day option, at a public offering price of $17.00 per share.
Biggest changeRecent Sales of Unregistered Securities and Use of Proceeds On July 19, 2024, we closed our IPO in which we sold 12,650,000 shares of Class A Common Stock, including 1,650,000 shares of Class A Common Stock pursuant to the underwriters’ full exercise of their 30-day option, at a public offering price of $17.00 per share.
Dividend Policy Subject to funds being legally available, we intend to cause TWFG Holding to make pro rata distributions to the Continuing Pre-IPO LLC Members and us in an amount at least sufficient to allow us and the Continuing Pre-IPO LLC Members to pay all applicable the taxes, to make payments under the Tax Receivable Agreement and to pay our corporate and other unreimbursed overhead expenses.
Dividend Policy Subject to funds being legally available, we intend to cause TWFG Holding to make pro rata distributions to the Continuing Pre-IPO LLC Members and us in an amount at least sufficient to allow us and the Continuing Pre-IPO LLC Members to pay all the applicable taxes, to make payments under the Tax Receivable Agreement and to pay our corporate and other unreimbursed overhead expenses.
The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to our Registration Statement. We received approximately $192.9 million of net proceeds after deducting underwriting discounts and commissions of $14.4 million a nd related offering expenses of approximately $7.8 million.
The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to our Registration Statement. We received approximately $192.9 million of net proceeds from the IPO after deducting underwriting discounts and commissions of $14.4 million a nd related offering expenses of approximately $7.8 million.
See “Risk factors—Risks relating to our organizational structure—In certain circumstances, TWFG Holding will be required to make distributions to us and the other holders of LLC Units, and the distributions that TWFG Holding will be required to make may be substantial.” 52 Table of contents Repurchases of Securities We did not repurchase any of our equity securities during the fourth quarter of the fiscal year covered by this Annual Report.
See “Risk factors—Risks relating to our organizational structure—In certain circumstances, TWFG Holding will be required to make distributions to us and the other holders of LLC Units, and the distributions that TWFG Holding will be required to make may be substantial.” 47 Table of contents Repurchases of Securities We did not repurchase any of our equity securities during the fourth quarter of the fiscal year covered by this Annual Report.
Stock Performance Graph The following graph illustrates the total return from July 18, 2024, the first trading date of our Class A Common Stock after our IPO, through December 31, 2024 for (i) our Class A Common Stock, (ii) the Standard and Poor's 500 Index, and (i ii) the Standard and Poor’s 500 Financials Sector Index, assuming an investment of $100 on July 18, 2024, including the reinvestment of dividends, if any: Item 6. [Reserved] 53 Table of contents
Stock Performance Graph The following graph illustrates the total return from July 18, 2024, the first trading date of our Class A Common Stock after our IPO, through December 31, 2025 for (i) our Class A Common Stock, (ii) the Standard and Poor's 500 Index, and (i ii) the Standard and Poor’s 500 Financials Sector Index, assuming an investment of $100 on July 18, 2024, including the reinvestment of dividends, if any: Item 6. [Reserved] 48 Table of contents
On March 24, 2025, we had approxim ately 15 st ockholders on record of our Class A Common Stock, two stockholders of record of our Class B Common Stock and one stockholder of record of our Class C Common Stock.
On March 9, 2026, we had approximately 23 stockholders of record of our Class A Common Stock, two stockholders of record of our Class B Common Stock and one stockholder of record of our Class C Common Stock.
Removed
Recent Sales of Unregistered Securities and Use of Proceeds In connection with the Reorganization Transactions, we issued (i) 2,161,874 shares of the Company’s Class A Common Stock in exchange for LLC Units, (ii) 7,277,651 shares of the Company’s Class B Common Stock for consideration of $0.00001 per share (or $72.78 in the aggregate) and (iii) 33,893,810 shares of the Company’s Class C Common Stock for consideration of $0.00001 per share (or $338.94 in the aggregate), to certain members of TWFG Holding.
Added
Securities Authorized for Issuance Under Equity Compensation Plans The information regarding equity compensation plans and the security ownership of certain beneficial owners and management of TWFG’s common stock is incorporated herein by reference to our Proxy Statement.
Removed
The shares were issued in reliance on the exemption contained in Section 4(a)(2) of the Securities Act, on the basis that the transaction did not involve a public offering.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table presents the disaggregation of Total Written Premium by offerings, business mix and line of business (in thousands): Years Ended December 31, 2024 2023 2022 Amount % of Total Amount % of Total Amount % of Total Offerings: Insurance Services Agency-in-a-Box $ 982,815 66 % $ 998,938 80 % $ 850,324 81 % Corporate Branches 275,331 19 53,963 4 18,718 2 Total Insurance Services 1,258,146 85 1,052,901 84 869,042 83 TWFG MGA 218,214 15 195,194 16 185,422 17 Total written premium $ 1,476,360 100 % $ 1,248,095 100 % $ 1,054,464 100 % Business Mix: Insurance Services Renewal business $ 975,657 66 % $ 827,112 66 % $ 639,733 61 % New business 282,489 19 225,789 18 229,309 22 Total Insurance Services 1,258,146 85 1,052,901 84 869,042 83 TWFG MGA Renewal business 163,105 11 165,348 13 137,690 13 New business 55,109 4 29,846 3 47,732 4 Total TWFG MGA 218,214 15 195,194 16 185,422 17 Total written premium $ 1,476,360 100 % $ 1,248,095 100 % $ 1,054,464 100 % Written Premium Retention: Insurance Services 93 % 95 % 87 % TWFG MGA 84 89 90 Consolidated 91 94 88 Line of Business: Personal lines $ 1,197,122 81 % $ 997,431 80 % $ 843,272 80 % Commercial lines 279,238 19 250,664 20 211,192 20 Total written premium $ 1,476,360 100 % $ 1,248,095 100 % $ 1,054,464 100 % 66 Table of contents Comparison of the Years Ended December 31, 2024 and 2023 Total Written Premium for the year ended December 31, 2024 increased by $228.3 million, or 18.3%, compared to the same period in the prior year.
Biggest changeWe believe Total Written Premium is a useful metric because it is the underlying driver of the majority of our revenue. 56 Table of contents The following table presents the disaggregation of Total Written Premium by offerings, business mix and line of business (in thousands): Years Ended December 31, 2025 2024 Amount % of Total Amount % of Total Offerings: Insurance Services Agency-in-a-Box $ 1,119,536 65 % $ 982,815 66 % Corporate Branches 343,922 20 275,331 19 Total Insurance Services 1,463,458 85 1,258,146 85 TWFG MGA 268,972 15 218,214 15 Total written premium $ 1,732,430 100 % $ 1,476,360 100 % Business Mix: Insurance Services Renewal business $ 1,142,481 66 % $ 975,657 66 % New business 320,977 19 282,489 19 Total Insurance Services 1,463,458 85 1,258,146 85 TWFG MGA Renewal business 182,177 11 163,105 11 New business 86,795 4 55,109 4 Total TWFG MGA 268,972 15 218,214 15 Total written premium $ 1,732,430 100 % $ 1,476,360 100 % Written Premium Retention: Insurance Services 91 % 93 % TWFG MGA 83 % 84 % Consolidated 90 % 91 % Line of Business: Personal lines $ 1,415,201 82 % $ 1,197,122 81 % Commercial lines 317,229 18 279,238 19 Total written premium $ 1,732,430 100 % $ 1,476,360 100 % 57 Table of contents The following table presents the dollar and percent change compared to the prior year for Total Written Premium by offerings and business mix (in thousands): Years Ended December 31, 2025 2024 $ Change % Change $ Change % Change Offerings: Insurance Services Agency-in-a-Box $ 136,721 14 % $ (16,123) (2) % Corporate Branches 68,591 25 221,368 410 TWFG MGA 50,758 23 23,020 12 Total change in written premium $ 256,070 17 % $ 228,265 18 % Business Mix: Insurance Services Renewal business $ 166,824 17 % $ 148,545 18 % New business $ 38,488 14 % $ 56,700 25 % TWFG MGA Renewal business $ 19,072 12 % $ (2,243) (1) % New business $ 31,686 57 % $ 25,263 85 % Consolidated Business Mix: Consolidated renewal business $ 185,896 13 % $ 146,302 12 % Consolidated new business 70,174 5 81,963 7 Total change in written premium $ 256,070 17 % $ 228,265 18 % Comparison of the Years Ended December 31, 2025 and 2024 Total Written Premium for the year ended December 31, 2025 increased by $256.1 million, or 17%, compared to $228.3 million, or 18%, growth in the same period in the prior year.
TPA fees are related to services performed based on service agreements with the insurance carriers. Other income. Other income is comprised primarily of interest income on fiduciary funds, income earned for facilitating premium financing arrangements, fees assessed for agent conventions and other miscellaneous income.
TPA fees are related to services performed based on service agreements with the insurance carriers. Other income. Other income is comprised primarily of income earned for facilitating premium financing arrangements, fees assessed for agent conventions, interest income on fiduciary funds, and other miscellaneous income.
(“Gordy”) Bunch III, we have established a track record of creating solutions for independent agents, insurance carriers and our Clients, with sustainable growth regardless of economic and P&C pricing cycles. We embrace a simple philosophy: “Our Policy is Caring” which is more than a motto.
(“Gordy”) Bunch III, we have established a track record of creating solutions for independent agents, insurance carriers and our Clients, with growth regardless of economic and P&C pricing cycles. We embrace a simple philosophy: “Our Policy is Caring” which is more than a motto.
These adjustments eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Our measure of Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. Adjusted EBITDA Margin .
These adjustments eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Our measure of Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.
We expect to have sufficient financial resources to meet our business requirements over the next 12 months and for the long-term, including the ability to service our debt and contractual obligations, finance capital expenditures and make distributions, including tax distributions, to our stockholders.
We expect to have sufficient financial resources to meet our business requirements over the next 12 months and for the long-term, including the ability to service our debt and contractual obligations, finance capital expenditures and make distributions, including tax distributions.
If it is determined that the recoverable of the intangible asset is unlikely due to the existence of one of the triggering events noted above, an impairment analysis is performed. We must make assumptions regarding the estimated cash flows and other factors to determine the fair value of the identified asset.
If it is determined that the recoverability of the intangible asset is unlikely due to the existence of one of the triggering events noted above, an impairment analysis is performed. We must make assumptions regarding the estimated cash flows and other factors to determine the fair value of the identified asset.
Other administrative expenses include technology costs, legal and professional fees, office expenses, marketing expense, survey expenses and other costs associated with our operations. Fluctuations in other administrative expenses are relative to the overall scale of our business operations. Depreciation and amortization. Depreciation and amortization are primarily comprised of the amortization of intangible assets recognized from our strategic asset acquisitions.
Other administrative expenses include technology costs, legal and professional fees, office expenses, marketing expenses, survey expenses and other costs associated with our operations. Fluctuations in other administrative expenses are relative to the overall scale of our business operations. Depreciation and amortization. Depreciation and amortization are primarily comprised of the amortization of finite-lived intangible assets recognized from our strategic asset acquisitions.
Income tax expense Income tax expense for the year ended December 31, 2024 was $1.5 million compared to zero in the same period in the prior year as after consummation of the Reorganization Transactions and IPO, the Company became subject to U.S. federal, state, and local income taxes with respect to its allocable share of taxable income of TWFG Holding assessed at the prevailing corporate tax rates.
Income tax expense Income tax expense for the year ended December 31, 2025 was $3.3 million compared to $1.5 million in the same period in the prior year as after consummation of the Reorganization Transactions and IPO, the Company became subject to U.S. federal, state, and local income taxes with respect to its allocable share of taxable income of TWFG Holding assessed at the prevailing corporate tax rates.
Accordingly, because of our ownership of the LLC Units, we are subject to U.S. federal, state and local income taxes with respect to our allocable share of any net taxable income of TWFG Holding and are taxed at the U.S. federal income tax rates applicable to corporations.
Accordingly, because of our ownership of the LLC Units, we are subject to U.S. federal, state and local income taxes with respect to our 50 Table of contents allocable share of any net taxable income of TWFG Holding and are taxed at the U.S. federal income tax rates applicable to corporations.
Following a reorganization into a holding company structure as part of the Reorganization Transactions, TWFG is a holding company and its sole material asset is a controlling ownership interest in TWFG Holding.
Following our reorganization into a holding company structure as part of the Reorganization Transactions, TWFG, Inc. is a holding company and its sole material asset is a controlling ownership interest in TWFG Holding.
See Note 14, “Earnings Per Share” to our consolidated financial statements included elsewhere in this Annual Report for more information about the earnings per share.
See Note 15, “Earnings Per Share” to our consolidated financial statements included elsewhere in this Annual Report for more information about the earnings per share.
For the year ended December 31, 2024, the calculation of adjusted income tax expense is based on a federal statutory rate of 21% and a blended state income tax rate of 1.88% on 100% of our adjusted income before income taxes as if we owned 100% of the TWFG Holding. Adjusted Diluted Earnings Per Share.
For the year ended December 31, 2025, the calculation of adjusted income tax expense is based on a federal statutory rate of 21% and a blended state income tax rate of 1.89% on 100% of our adjusted income before income taxes as if we owned 100% of TWFG Holding. Adjusted Diluted Earnings Per Share.
Overview We are a leading, high-growth, independent distribution platform for personal and commercial insurance in the United States. We are pioneers in the insurance industry, developing an agency model built on innovation and experience with what we believe is a more flexible approach than traditional distribution models.
Overview We are a leading, high-growth, independent distribution platform for personal and commercial insurance in the U.S. We are pioneers in the insurance industry, developing an agency model built on innovation and experience with what we believe is a more flexible approach than traditional distribution models.
Interest on Term Loan B and Term Loan C accrue at Daily Simple Secured Overnight Financing Rate (“SOFR”) plus the Benchmark Replacement Adjustment of 0.11448%, 0.26161%, or 0.42826% for the one-month, three-month, or six-month borrowing periods, respectively.
Interest on the Term Loan C accrues at Daily Simple Secured Overnight Financing Rate (“SOFR”) plus the Benchmark Replacement Adjustment of 0.11448%, 0.26161%, or 0.42826% for the one-month, three-month, or six-month borrowing periods, respectively.
See Note 2, 76 Table of contents “Summary of Significant Accounting Policies,” to our consolidated financial statements included elsewhere in this Annual Report for a summary of our significant accounting policies.
See Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included elsewhere in this Annual Report for a summary of our significant accounting policies.
Adjusted Net Income is a supplemental measure of our performance and is defined as net income (the most directly comparable GAAP measure) before amortization, non-recurring or non-operating income and expenses, including equity-based compensation, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interests do not exist.
Adjusted Net Income is a supplemental measure of our performance and is defined as Net Income (the most directly comparable GAAP measure) before amortization, non-recurring or non-operating income and expenses, including equity-based compensation, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interests do not exist while excluding the impact of the sale of non-current assets.
Additionally, either party can agree to amend the provisions of the agency agreements, which may affect our future commission income. Contingent income. We may earn contingent income from insurance carriers. Contingent income is highly variable and based primarily on underwriting results and, to a lesser extent, volume. 56 Table of contents Fee income.
Additionally, either party can agree to amend the provisions of the agency agreements, which may affect our future commission income. Contingent income. We may earn contingent income from insurance carriers. Contingent income is highly variable and based primarily on underwriting results and, to a lesser extent, volume placed with the carrier. Fee income.
The Credit Agreements contain covenants that, among other provisions and subject to certain exceptions, restrict our ability to make restricted payments, incur additional debt, engage in asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in transactions with affiliates, change our business or make investments.
The Credit Agreements also contain covenants that, among other provisions and subject to certain exceptions, restrict our ability to pay dividends or other distributions, incur additional debt, engage in asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in transactions with affiliates, change our business or make investments.
Adjusted Diluted Earnings Per Share is Adjusted Net Income divided by diluted shares outstanding after adjusting for the effect of (i) the exchange of 100% of the outstanding Class B Common Stock and Class C Common Stock (together with the related LLC Units) into shares of Class A Common 70 Table of contents Stock and (ii) the vesting of 100% of the unvested equity awards and exchange into shares of Class A Common Stock.
Adjusted Diluted Earnings Per Share is Adjusted Net Income divided by diluted shares outstanding after adjusting for the effect of (i) the exchange of 100% of the outstanding Class B Common Stock and Class C Common Stock (to gether with the related LLC Units) into shares of Class A Common Stock and (ii) the vesting of 100% of the unvested equity awards and exchange into shares of Class A Common Stock.
Adjusted EBITDA is a supplemental measure of our performance and is defined as EBITDA adjusted to reflect items such as equity-based compensation, interest income, other non-operating and certain nonrecurring items . EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization.
Adjusted EBITDA is a supplemental measure of our performance and is defined as EBITDA adjusted to reflect items such as equity-based compensation, interest income, other non-operating and certain nonrecurring items, while excluding the impact of the sale of non-current assets. EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization.
We define Adjusted Free Cash Flow as cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property, plant, and equipment and acquisition-related costs.
Adjusted Free Cash Flow. Adjusted Free Cash Flow is a supplemental measure of our performance. We define Adjusted Free Cash Flow as cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property, plant, and equipment and acquisition-related costs.
In the future, any outstanding balances under our Revolving Facility, if any, will become due and payable during 2028. Annual interest rates on the acquisition-related notes are 3.75% , 4.69% and 5.00% , and our effective interest rates on the Term Loan C for the year ended December 31, 2024 was 3.06%.
In the future, any outstanding balances under our Revolving Facility, if any, will become due and payable during 2028. Annual interest rates on the acquisition-related notes are 3.75%, 4.69% and 5.00%, and our effective interest rates on the Term Loan C for the year ended December 31, 2025 wa s 4.185%.
For the periods following the next 12 months, we have an additional $5.1 million of debt maturities representing $4.0 million under the Term Loan C, and $1.1 million in acquisition-related notes. As of December 31, 2024, there was no outstanding balances under our Revolving Facility.
For the periods following the next 12 months, we have an additional $8.7 million of debt maturities representing $2.0 million under the Term Loan C, $0.5 million in acquisition-related notes, and $6.1 million of acquisition-related payables. As of December 31, 2025, there was no outstanding balances under our Revolving Facility.
For the year ended December 31, 2024, 41,171,461 weighted average outstanding Class B Common Stock and Class C Common Stock were considered dilutive and included in the 56,153,870 weighted-average shares of common stock outstanding - diluted within diluted earnings per share calculation.
For the year ended December 31, 2025, 41,171,461 weighted average outstanding Class B Common Stock and Class C Common Stock were considered anti-dilutive and included in the 56,271,651 weighted-average shares of common stock outstanding - diluted within diluted earnings per share calculation.
Upon conversion, agents of the newly converted Corporate Branches became employees and received salaries, employee benefits, and bonuses for services rendered instead of commissions. As result, we released a portion of the unpaid commissions related to the converted branches that we no longer are required to settle, which resulted in the aforementioned one-time favorable accrual adjustment.
Upon conversion , agents of the newly converted Corporate Branches became employees and received salaries, employee benefits, and bonuses for services rendered instead of commissions. As a result, we released a portion of the unpaid commissions related to the converted branches that we no longer are required to settle.
Organic Revenue is total revenues (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, fee income, other income and those revenues generated from acquired books of business with over $0.5 million in annualized revenue that have not reached the twelve-month owned milestone. Organic Revenue Growth.
Organic Revenue is total revenue (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, non-policy fee 58 Table of contents income, other income and those revenues generated from acquired businesses with over $0.5 million in annualized revenue that have not reached the twelve-month owned mark. Organic Revenue Growth.
Our main obligation under our agency agreements with the insurance carriers is selling insurance contracts to our Clients. Each underlying insurance contract is a separate and distinct contract between the Client and the insurance carrier. Our Clients are not obligated to keep the insurance contract for the full term or renew it with the insurance carrier beyond its initial term.
Each underlying insurance contract is a separate and distinct contract between the Client and the insurance carrier. Our Clients are not obligated to keep the insurance contract for the full term or renew it with the insurance carrier beyond its initial term.
Changes in contingent income are unpredictable and dependent upon the target financial and performance metrics established by the insurance carriers.
Contingent income is unpredictable and dependent upon the target financial and performance metrics established by the insurance carriers.
Changes to individual components of fee income are discussed in detail below: • Policy fees for the year ended December 31, 2024 increased by $1.4 million, or 68.4%, compared to the same period in the prior year.
Changes to individual components of fee income are discussed in detail below: • Policy fees for the year ended December 31, 2025 increased by $0.9 million, or 24% , compared to the same period in the prior year.
Contingent income Contingent income for the year ended December 31, 2024 increased by $4.6 million, or 113.5%, to $8.7 million from $4.1 million in the same period in the prior year. The increase in contingent income was driven by underlying carrier profitability and growth in our business.
Contingent income Contingent income for the year ended December 31, 2025 increased by $4.4 million, or 50%, to $13.1 million from $8.7 million in the same period in the prior year. The increase in contingent income was driven by underlying carrier profitability, new carriers to our portfolio and growth in our business.
For the year ended December 31, 2024, the composition of our renewal and new business mix shifted under our two product offerings as follows: Insurance Services renewal business, as a percentage of the total written premium, was 66% which was consistent with the prior year and premium retention decreased to 93% from 95%, resulting in renewal premium growth of 18.0%, or $148.5 million, compared to 2023.
For the year ended December 31, 2025, the composition of our renewal and new business under our two product offerings are as follows: Insurance Services renewal business, as a percentage of the total written premium, was 66% which was consistent with the prior year and premium retention decreased to 91% from 93%, resulting in renewal premium growth of 17%, or $166.8 million, compared to 2024.
See “—Consolidated Results of Operations” for additional information regarding the results of our operations. Investing activities Investing activities from continuing operations used $25.1 million and $14.7 million of cash for the years ended December 31, 2024 and 2023, respectively.
See “—Consolidated Results of Operations” for additional information regarding the results of our operations. Investing activities Investing activities from continuing operations used $70.4 million and $25.1 million of cash for the years ended December 31, 2025 and 2024 , respect ively.
A reconciliation of Adjusted Diluted Earnings Per Share to diluted earnings per share, the most directly comparable GAAP measure, for the year ended December 31, 2024 indicated is as follows: Years Ended December 31, 2024 Earnings per share of common stock – diluted $ 0.19 Plus: Impact of all LLC Units exchanged for Class A Common Stock (1) 0.32 Plus: Adjustments to Adjusted net income (2) 0.08 Adjusted Diluted Earnings Per Share 0.59 Weighted average common stock outstanding – diluted 14,982,409 Plus: Impact of all LLC Units exchanged for Class A Common Stock (1) 41,171,461 Adjusted Diluted Earnings Per Share diluted share count 56,153,870 (1) For comparability purposes, this calculation incorporates the net income that would be distributable if all shares of Class B Common Stock and Class C Common Stock, together with the related LLC Units, were exchanged for shares of Class A Common Stock.
This measure also eliminates the impact of expenses that do not relate to core business performance, among other factors. 61 Table of contents A reconciliation of Adjusted Diluted Earnings Per Share to diluted earnings per share, the most directly comparable GAAP measure, for the year ended December 31, 2025 indicated is as follows: Years Ended December 31, 2025 2024 Earnings per share of common stock – diluted $ 0.53 $ 0.19 Plus: Impact of all LLC Units exchanged for Class A Common Stock (1) 0.20 0.32 Plus: Adjustments to Adjusted net income (2) 0.17 0.08 Adjusted Diluted Earnings Per Share $ 0.90 $ 0.59 Weighted average common stock outstanding – diluted 15,100,190 14,982,409 Plus: Impact of all LLC Units exchanged for Class A Common Stock (1) 41,171,461 41,171,461 Adjusted Diluted Earnings Per Share diluted share count 56,271,651 56,153,870 (1) For comparability purposes, this calculation incorporates the net income that would be distributable if all shares of Class B Common Stock and Class C Common Stock, together with the related LLC Units, were exchanged for shares of Class A Common Stock.
Comparison of the Years Ended December 31, 2024 and 2023 Revenue growth rate, representing the year-over-year change in total revenues, was 18.4% for the year ended December 31, 2024 compared to the same period in 2023 and 11.8% for the year ended December 31, 2023 compared to the same period in 2022.
Comparison of the Years Ended December 31, 2025 and 2024 Revenue growth rate, representing the year-over-year change in total revenues, was 22.0% for the year ended December 31, 2025 compared to the 18.4% Revenue growth rate for the year ended December 31, 2024.
In making this determination, the Company considers all available favorable and unfavorable evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations.
In making this determination, the Company considers all available favorable and unfavorable evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. Based on our evaluation of this evidence, we have recorded a valuation allowance against our deferred tax assets.
A reconciliation of Adjusted Free Cash Flows to Cash flow from Operating Activities, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Years Ended December 31, 2024 2023 2022 Cash Flow from Operating Activities $ 40,479 $ 30,154 $ 25,755 Purchase of property and equipment (3,201) (260) (115) Tax distribution to members (1) (9,106) (9,526) (6,007) Acquisition-related expenses 20 204 — Net cash flow provided by operating activities from discontinued operation — (839) (3,661) Adjusted Free Cash Flow $ 28,192 $ 19,733 $ 15,972 (1) Tax distributions to members represents the amount distributed to the members of TWFG Holding in respect of their income tax liability related to the net income of TWFG Holding allocated to its members. 72 Table of contents Organic Revenue, Organic Revenue Growth, Adjusted Net Income, Adjusted Net Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow and Adjusted Diluted Earnings Per Share are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including revenues (for Organic Revenue and Organic Revenue Growth), net income (for Adjusted Net Income, Adjusted Net Income Margin, Adjusted EBITDA and Adjusted EBITDA Margin), cash flow from operating activities (for Adjusted Free Cash Flow) and diluted earnings per share (for Adjusted Diluted Earnings Per Share), which we consider to be the most directly comparable GAAP measures.
A reconciliation of Adjusted Free Cash Flow to Cash flow from Operating Activities, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Years Ended December 31, 2025 2024 Cash Flow from Operating Activities $ 53,501 $ 40,479 Purchase of property and equipment (356) (3,201) Tax distribution to members (1) (11,350) (9,106) Acquisition-related expenses 292 20 Adjusted Free Cash Flow $ 42,087 $ 28,192 (1) Tax distributions to members represents the amount distributed to the members of TWFG Holding in respect of their income tax liability related to the net income of TWFG Holding allocated to its members. 63 Table of contents Organic Revenue, Organic Revenue Growth, Adjusted Net Income, Adjusted Net Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow and Adjusted Diluted Earnings Per Share are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including revenues (for Organic Revenue and Organic Revenue Growth), net income (for Adjusted Net Income, Adjusted Net Income Margin, Adjusted EBITDA and Adjusted EBITDA Margin), cash flow from operating activities (for Adjusted Free Cash Flow) and diluted earnings per share (for Adjusted Diluted Earnings Per Share), which we consider to be the most directly comparable GAAP measures.
We expect that our primary liquidity needs will comprise of cash needed to (1) provide capital to facilitate the organic growth of our business, (2) pay operating expenses, including cash compensation to our independent agents and our employees, (3) make payments under the Tax Receivable Agreement, (4) fund acquisitions, (5) pay interest and principal due on borrowings under our Credit Agreements and (6) pay income taxes.
We expect that our primary liquidity needs will comprise of cash needed to (1) provide capital to facilitate the organic growth of our business, (2) pay operating expenses, including cash compensation to our independent agents and our employees, (3) potential future payments under the Tax Receivable Agreement, if exchanges of LLC Units occur (no such payments were required during 2025), (4) fund acquisitions, (5) pay interest and principal due on borrowings under our Credit Agreements, (6) pay income taxes and (7) make potential future payments of dividends, if and when declared by our board of directors.
“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”. The following discussion provides commentary on the financial results derived from our audited financial statements for the years ended December 31, 2024, 2023 and 2022 prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”. The following discussion provides commentary on the financial results derived from our audited financial statements for the years ended December 31, 2025 and 2024 prepared in accordance with GAAP.
The increase was primarily attributable to an increase in interest rates. 65 Table of contents Key Performance Indicators Total Written Premium Total Written Premium represents, for any reported period, the total amount of current premium (net of cancellations) placed with insurance carriers. We utilize Total Written Premium as a key performance indicator when planning, monitoring and evaluating our performance.
Total Written Premium represents, for any reported period, the total amount of current premium (net of cancellations) placed with insurance carriers. We utilize Total Written Premium as a key performance indicator when planning, monitoring and evaluating our performance.
We have certain obligations related to debt maturities and operating leases. As of December 31, 2024, we had $1.0 million of non-cancelable operating lease obligations for the next 12 months. For the periods following the next 12 months, we have an additional $3.4 million of non-cancellable operating lease obligations.
We have certain obligations related to debt maturities and operating leases. As of December 31, 2025, we had $1.3 million of n on-cancelable operating lease obligations for the next 12 months. For the periods following the next 12 months, we have an addition al $2.9 million o f non-cancellable operating lease obligations.
(2) Adjustments to Adjusted Net Income are described in the footnotes of the reconciliation of Adjusted Net Income to Net Income in “Adjusted Net I ncome and Adjusted Net Income Margin”, which represent the difference between Net Income of $28.6 million and Adjusted Net Income of $33.0 million for the year ended December 31, 2024.
(2) Adjustments to Adjusted Net Income are described in the footnotes of the reconciliation of Adjusted Net Income to Net Income in “Adjusted Net Income and Adjusted Net Income Margin”, which represent the difference between Net Income of $41.2 million and Adjusted Net Income of $50.9 million for the year ended December 31, 2025.
Pre-IPO, TWFG Holding was treated as a pass-through entity for U.S. federal and state income tax purposes and accordingly has not been subject to U.S. federal or state income tax. After the IPO, TWFG Holding continues to be treated as a partnership for U.S. federal and state income tax purposes.
TWFG Holding is treated as a pass-through entity for U.S. federal and certain state income tax purposes and accordingly has not been subject to U.S. federal or applicable state income tax.
Salaries and employee benefits Salaries and employee benefits for the year ended December 31, 2023 was $14.0 million , compared to $12.2 million in the same period in the prior year, reflecting an increase of $1.7 million , or 14.1% .
Salaries and employee benefits Salaries and employee benefits for the year ended December 31, 2025 was $37.6 million, compared to $29.1 million in the same period in the prior year, reflecting an increase of $8.6 million, or 29%.
The aggregate principal amounts of the Term Loan C as of December 31, 2024 is $5.9 million as follows (in thousands): Year ended December 31, 2025 $ 1,912 Year ended December 31, 2026 1,972 Year ended December 31, 2027 2,035 Total $ 5,919 On May 23, 2023, TWFG Holding, the guarantors party thereto, the lenders party thereto, PNC Bank, National Association (the “Agent”) and PNC Capital Markets LLC entered into a credit agreement that provides a revolving credit facility to TWFG Holding, with commitments in an aggregate principal amount not to exceed $50.0 million which was amended on June 20, 2024 (as so amended, the “Revolving Facility,” and together with the Term Loan Credit Agreement, the “Credit Agreements”).
The aggregate principal amounts of the Term Loan C as of December 31, 2025 is $4.0 million as follows (in thousands): 64 Table of contents Year ending December 31, 2026 $ 1,972 Year ending December 31, 2027 2,035 Total $ 4,007 The Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank National Association, dated as of May 23, 2023 and as amended on June 20, 2024, provides a revolving credit facility to the Company, with commitments in an aggregate principal amount not to exceed $50.0 million (as so amended, the “Revolving Facility,” and together with the Term Loan Credit Agreement, the “Credit Agreements”).
Other administrative expenses Other administrative expenses for the year ended December 31, 2023 was $11.0 million , compared to $9.7 million in the same period in the prior year, reflecting an increase of $1.3 million , or 13.1% .
Other administrative expenses Other administrative expenses for the year ended December 31, 2025 was $22.0 million, compared to $16.7 million in the same period in the prior year, reflecting an increase of $5.4 million, or 32% .
Adjusted Net Income pre-IPO did not reflect adjustments for income taxes since TWFG Holding is a limited liability company and is classified as a partnership for U.S. federal income tax purposes.
Adjusted Net Income pre-IPO did not reflect adjustments for income taxes since TWFG Holding is a limited liability company and is classified as a partnership for U.S. federal income tax purposes. Post-IPO, the calculation incorporates the impact of federal and state statutory tax rates on 100% of our adjusted pre-tax income as if the Company owned 100% of TWFG Holding.
The increase in policy fees was primarily due to higher policy count in our TWFG MGA offering and new business growth through our marketing activities. • Branch fees for the year ended December 31, 2024 increased by $1.8 million, or 58.8%, compared to the same period in the prior year.
The increase in policy fees was primarily due to higher policy count and new business growth. • Branch fees for the year ended December 31, 2025 increased by $0.5 million , or 11%, compared to the same period in the prior year .
As we continue to pursue strategic asset acquisitions, we expect our amortization expenses to increase. Interest Expense. Interest expense consists of interest payable on indebtedness, commitment fees and imputed interest on Deferred acquisition payables. Interest Income.
As we continue to pursue strategic asset acquisitions, we expect our amortization expense to increase. Interest expense. Interest expense consists of interest payable on indebtedness, commitment fees and imputed interest on Deferred Acquisition Payables. Interest income. Interest income consists of interest earned on the Company’s cash and cash equivalents which are not held in a fiduciary capacity.
We believe our significant accounting policies could potentially produce materially different results if we were to change underlying assumptions, estimates or judgments. The accounting policies that we believe reflect our more significant estimates, judgments and assumptions that are most critical to understanding and evaluating our reported financial results are: revenue recognition, intangible assets impairment, and income taxes.
The accounting policies that we believe reflect our more significant estimates, judgments and assumptions that are most critical to understanding and evaluating our 67 Table of contents reported financial results are: revenue recognition, intangible assets impairment, income taxes and contingent consideration.
For the year ended December 31, 2024, Adjusted Diluted Earnings Per Share include adjustments of $4.4 million to Adjusted Net Income on 14,982,409 weighted-ave rage shares of common stock outstanding - diluted. Adjusted EBITDA.
For the year ended December 31, 2025, Adjusted Diluted Earnings Per Share include adjustments of $9.7 million to Adjusted Net Income on 56,271,651 weighted-average shares of common stock outstanding - diluted. Adjusted EBITDA.
Insurance Services Agency-in-a-Box commission expense for the year ended December 31, 2024 decreased by $4.0 million, or 4.0%, compared to the same period in the prior year.
Commission income for Insurance Services grew by $23.4 million, or 15%, for the year ended December 31, 2025 compared to the same period in the prior year. Insurance Service Agency-in-a-Box commission income for the year ended December 31, 2025 increased by $15.3 million , or 12% , compared to the same period in the prior year.
Comparative cash flows The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands): Years Ended December 31, 2024 2023 Net cash provided by operating activities from continuing operations $ 40,479 $ 29,315 Net cash used in investing activities from continuing operations (25,055) (14,719) Net cash provided by (used in) financing activities from continuing operations 143,431 1,610 Net change in cash, cash equivalents and restricted cash from continuing operations 158,855 16,206 Cash, cash equivalents and restricted cash from continuing operations, beginning of period 46,468 30,262 Cash, cash equivalents and restricted cash from continuing operations, end of period $ 205,323 $ 46,468 Cash paid during the period for interest $ 2,298 $ 832 Comparison of the Years Ended December 31, 2024 and 2023 Operating activities Operating activities from continuing operations provided $40.5 million and $29.3 million of cash for the years ended December 31, 2024 and 2023, respectively.
Comparative cash flows The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands): Years Ended December 31, 2025 2024 Variance Net cash provided by operating activities from continuing operations $ 53,501 $ 40,479 $ 13,022 Net cash (used in) investing activities from continuing operations (70,378) (25,055) (45,323) Net cash (used in) provided by financing activities from continuing operations (20,546) 143,431 (163,977) Net change in cash, cash equivalents and restricted cash from continuing operations (37,423) 158,855 (196,278) Cash, cash equivalents and restricted cash from continuing operations, beginning of period 205,323 46,468 158,855 Cash, cash equivalents and restricted cash from continuing operations, end of period $ 167,900 $ 205,323 $ (37,423) Cash paid during the period for interest $ 194 $ 2,298 $ (2,104) Cash paid during the period for taxes $ 3,268 $ — $ 3,268 Comparison of the Years Ended December 31, 2025 and 2024 Operating activities Operating activities from continuing operations provided $53.5 million and $40.5 million of cash for the years ended December 31, 2025 and 2024, respectively.
For the year ended December 31, 2024, this includes $25.8 million of net income on 14,982,409 weighted-average shares of common stock outstanding - diluted, for the year ended December 31, 2024.
For the year ended December 31, 2025, this includes $33.2 million of net income on 56,271,651 weighted-average shares of common stock outstanding - diluted, for the year ended December 31, 2025.
The following table sets forth our revenues by amount and as a percentage of our revenues for the periods indicated (dollar amounts in thousands): Years Ended December 31, 2024 2023 2022 Amount % of Total Amount % of Total Amount % of Total Commission income $ 183,158 90 % $ 158,679 92 % $ 139,488 91 % Contingent income 8,722 4 4,085 2 4,620 3 Fee income 10,562 5 8,311 5 8,296 5 Other income 1,318 1 968 1 1,471 1 Total revenues $ 203,760 100 % $ 172,043 100 % $ 153,875 100 % Commission expense.
The following table sets forth our revenues by amount and as a percentage of our revenues for the periods indicated (dollar amounts in thousands): Years Ended December 31, 2025 2024 Amount % of Total Amount % of Total Commission income $ 220,968 89 % $ 183,158 90 % Contingent income 13,111 5 8,722 4 Fee income 12,992 5 10,562 5 Other income 1,441 1 1,318 1 Total revenues $ 248,512 100 % $ 203,760 100 % 51 Table of contents Commission expense.
Other companies may calculate any or all of these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures. Liquidity and capital resources Historical liquidity and capital resources We have managed our historical liquidity and capital requirements primarily through cash generated from our operations.
Other companies may calculate any or all of these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.
Organic Revenue Growth Rate was 14.5% for the year ended December 31, 2024 compared to the same period in 2023 and 11.2% for the year ended December 31, 2023 compared to the same period in 2022.
Organic Revenue Growth Rate was 11.6% for the year ended December 31, 2025 compared to 15.2% Organic Revenue Growth Rate for the year ended December 31, 2024.
See Note 5, “Operating Leases,” to our consolidated financial statements included elsewhere in this Annual Report for additional information . In addition, as of December 31, 2024, we had $2.5 million of debt maturities for the next 12 months comprised of $1.9 million of the remaining balance under the Term Loan C, and $0.6 million in acquisition-related notes.
In addition, as of December 31, 2025, we had $3.5 million of debt maturities for the next 12 months comprised of $2.0 million of the remaining balance under the Term Loan C, and $0.6 million in acquisition-related notes, and $0.9 million of acquisition-related payables.
Changes in contingent income are unpredictable and dependent upon the target financial and performance metrics established by the insurance carriers. 59 Table of contents Fee income The following table presents the disaggregation of our fee income by major sources (in thousands): Years Ended December 31, 2024 2023 Amount % of Total Amount % of Total Policy fees $ 3,538 33 % $ 2,100 25 % Branch fees 4,736 45 2,982 36 License fees 1,895 18 2,695 33 TPA fees 393 4 534 6 Total fee income $ 10,562 100 % $ 8,311 100 % Fee income for the year ended December 31, 2024 increased $2.3 million, or 27.1%, compared to the same period in the prior year.
Fee income The following table presents the disaggregation of our fee income by major sources (in thousands): Years Ended December 31, 2025 2024 Amount % of Total Amount % of Total Policy fees $ 4,392 34 % $ 3,538 33 % Branch fees 5,276 40 4,736 45 License fees 2,719 21 1,895 18 TPA fees 605 5 393 4 Total fee income $ 12,992 100 % $ 10,562 100 % Fee income for the year ended December 31, 2025 increased $2.4 million, or 23% , compared to the same period in the prior year.
Interest income consists of interest earned on the Company’s Cash and cash equivalents which are not held in a fiduciary capacity. 57 Table of contents Consolidated results of operations The following is a discussion of our consolidated results of operations for the periods presented. This information is derived from our accompanying audited consolidated financial statements prepared in accordance with GAAP.
Other non-operating income (expense), net. Other non-operating income (expense), net consists of gains and losses on the sale of assets. Consolidated results of operations The following is a discussion of our consolidated results of operations for the periods presented. This information is derived from our accompanying audited consolidated financial statements prepared in accordance with GAAP.
(2) Post-IPO, we are subject to United States federal income taxes, in addition to state, local, and foreign taxes, with respect to our allocable share of any net taxable income of TWFG Holding.
This correction impacts only non-GAAP measures and had no effect on previously reported GAAP results. (3) Post-IPO, we are subject to U.S. federal income taxes, in addition to state, local, and foreign taxes, with respect to our allocable share of any net taxable income of TWFG Holding.
We believe that Adjusted EBITDA Margin is a useful measurement of operating profitability for the same reasons we find Adjusted EBITDA useful and also because it provides a period-to-period comparison of our operating performance. 71 Table of contents A reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to Net income and Net income margin, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Years Ended December 31, 2024 2023 2022 Total revenues $ 203,760 $ 172,043 $ 153,875 Net income $ 28,592 $ 26,096 $ 20,614 Interest expense 2,223 1,003 398 Interest income (2) 4,376 891 46 Depreciation and amortization 12,020 4,862 3,302 Income tax expense 1,495 — — EBITDA 39,954 31,070 24,268 Acquisition-related expenses 20 204 — Restructuring and related expenses — 17 — Equity-based compensation 2,219 — — Interest income (2) 4,376 891 46 Discontinued operation income — (834) 2,733 Other non-recurring items (1) (1,220) — — Adjusted EBITDA $ 45,349 $ 31,348 $ 27,047 Net Income Margin 14.0 % 15.2 % 13.4 % Adjusted EBITDA Margin 22.3 % 18.2 % 17.6 % (1) Represents one-time adjustments of office relocation cost and the branch conversions impacts.
We believe that Adjusted EBITDA Margin is a useful measurement of operating profitability for the same reasons we find Adjusted EBITDA useful and also because it provides a period-to-period comparison of our operating performance. 62 Table of contents A reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to Net income and Net income margin, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Years Ended December 31, 2025 2024 Total Revenues $ 248,512 $ 203,760 Net income $ 41,166 $ 28,592 Interest expense 287 2,223 Interest income (1) (6,607) (4,376) Depreciation and amortization 18,353 12,020 Income tax expense 3,279 1,495 EBITDA 56,478 39,954 Acquisition-related expenses 292 20 Equity-based compensation 4,578 2,219 Interest income (1) 6,607 4,376 Gain on sale of non-current assets, net (2) (1,119) — Other non-recurring items (3) 10 (1,220) Adjusted EBITDA $ 66,846 $ 45,349 Net Income Margin 16.6 % 14.0 % Adjusted EBITDA Margin 26.9 % 22.3 % (1) Interest income reflects interest and other earnings on cash balances held by the Company.
Commission income The following table presents the disaggregation of our commission income by offerings (in thousands): Years Ended December 31, 2024 2023 Amount % of Total Amount % of Total Insurance Services Agency-in-a-Box $ 122,651 67 % $ 126,467 80 % Corporate Branches 33,468 18 6,658 4 Total Insurance Services 156,119 85 133,125 84 TWFG MGA 27,039 15 25,554 16 Total commission income $ 183,158 100 % $ 158,679 100 % Commission income for the year ended December 31, 2024 increased by $24.5 million, or 15.4%, compared to the same period in the prior year.
Commission income The following table presents the disaggregation of our commission income by offerings (in thousands): Years Ended December 31, 2025 2024 Amount % of Total Amount % of Total Insurance Services Agency-in-a-Box $ 137,937 62 % $ 122,651 67 % Corporate Branches 41,562 19 33,468 18 Total Insurance Services 179,499 81 156,119 85 TWFG MGA 41,469 19 27,039 15 Total commission income $ 220,968 100 % $ 183,158 100 % Commission income for the year ended December 31, 2025 increased b y $37.8 million , or 21% , compared to the same period in the prior year due to the continued organic business growth and the impact of acquisitions made in 2025.
Other income Other income for the year ended December 31, 2024 was $1.3 million, compared to $1.0 million in the same period in the prior year, reflecting an increase of $0.3 million, or 36.2%. 60 Table of contents Expenses Commission expense The following table presents the disaggregation of our commission expense by offerings (in thousands): Years Ended December 31, 2024 2023 Amount % of Total Amount % of Total Insurance Services Agency-in-a-Box $ 95,797 81 % $ 99,823 85 % Corporate Branches 4,488 4 772 1 Total Insurance Services 100,285 85 100,595 86 TWFG MGA 17,716 15 16,191 14 Other 85 — 61 — Total commission expense $ 118,086 100 % $ 116,847 100 % Commission expense for the year ended December 31, 2024 increased by $1.2 million, or 1.1%, compared to the same period in the prior year.
The increase was primarily comprised of interest earned on fiduciary funds and premium financing income. 54 Table of contents Expenses Commission expense The following table presents the disaggregation of our commission expense by offerings (in thousands): Years Ended December 31, 2025 2024 Amount % of Total Amount % of Total Insurance Services Agency-in-a-Box $ 107,789 81 % $ 95,797 81 % Corporate Branches 5,331 4 4,488 4 Total Insurance Services 113,120 85 100,285 85 TWFG MGA 20,295 15 17,716 15 Other 103 — 85 — Total commission expense $ 133,518 100 % $ 118,086 100 % Total commission expense for the year ended December 31, 2025 increased by $15.4 million, or 13%, compared to the same period in the pr ior year.
We have used cash flow from operations primarily to pay compensation and related expenses, general, administrative and other expenses, debt service and distributions to our owners. Credit agreements On June 5, 2017, TWFG Holding, as borrower, entered into a credit agreement (as subsequently amended, the “Term Loan Credit Agreement”) with PNC Bank, National Association, as lender.
Credit agreements On June 5, 2017, TWFG Holding, as borrower, entered into a credit agreement (as subsequently amended, the “Term Loan Credit Agreement”) with PNC Bank, National Association, as lender.
Depreciation and amortization Depreciation and amortization for the year ended December 31, 2023 was $4.9 million , compared to $3.3 million in the same period in the prior year, reflecting an increase of $1.6 million , or 47.2% . This increase was primarily attributable to the amortization of intangible assets from our recent intangible asset acquisitions.
Depreciation and amortization Depreciation and amortization for the year ended December 31, 2025 was $18.3 million compared to $12.0 million in the same period in the prior year, reflecting an increase of $6.3 million, or 53%.
However, due to the complexity of some of these uncertainties, the ultimate resolution may significantly differ from our estimate. 77 Table of contents Recent accounting pronouncements For a description of our recently adopted accounting pronouncements and recently issued accounting standards not yet adopted, see Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included elsewhere in this Annual Report.
The fair value of contingent consideration becomes more certain as the acquired Books of Business approach their respective settlement date. 69 Table of contents Recent accounting pronouncements For a description of our recently adopted accounting pronouncements and recently issued accounting standards not yet adopted, see Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements included elsewhere in this Annual Report.
For the year ended December 31, 2023, Other income included $0.1 million of gains on the sale of Books of Business compared to $0.9 million of gains realized in the same period in the prior year.
Other non-operating income (expense), net Other non-operating income (expense), net for the year ended December 31, 2025 increased by $1.1 million compared to the same period in the prior year due to selling of Books of Business.
Contingent income is paid when we meet or exceed certain premium volumes and/or falls below specific loss ratio quotas predetermined by its insurance carriers.
Contingent income 68 Table of contents The timing of revenue recognition and constraints applied to contingent commissions are based on estimates and assumptions. Contingent income is paid when we meet or exceed certain premium volumes and/or fall below specific loss ratio quotas predetermined by insurance carriers.
Our net investing outflows increased primarily due to the higher level of intangible asset acquisitions in 2024 of $21.9 million compared to $15.4 million in 2023.
Our net investing outflows increased primarily due to the higher level of intangible asset acquisitions in 2025 of $61.9 million compared to $21.9 million in 2024, partially offset by $1.8 million inflow from proceeds on the sale of intangible assets and other net decrease in investing outflows of $2.9 million .
Revenue growth for the year ended December 31, 2024 compared to the same period in 2023 included the impact of the continued rollout of commission income from our Book of Business acquisitions in 2023 into the current period, higher fee income and higher interest income on fiduciary funds.
Revenue growth for the periods reflected the growth in our Books of Business and the mix of the new and renewal businesses. Revenue growth for the year ended December 31, 2025 compared to the same period in 2024 included the continued growth of commission and fee income during the period.
Our commissions are established by the agency agreement between the Company and the insurance carrier and are calculated as a percentage of premiums for the underlying insurance contract. Commission rates vary across insurance carriers, states and lines of business and typically rang e from 7% to 22%. Our average commission rate for 2024 was approximately 12%.
We derive commission income from the placement of insurance contracts between insurance carriers and Clients. Our commissions are established by the agency agreement between the Company and the insurance carrier and are calculated as a percentage of premiums for the underlying insurance contract.
As of December 31, 2024, we have an interest rate swap agreement associated with the Term Loan C, which converted the floating interest rates on these loans to fixed 75 Table of contents interest rates. Se e Note 6 “Derivatives” and Note 8, “Debt” to our consolidated financial statements included elsewhere in this Annual Report for additional information.
As of December 31, 2025, we have an interest rate swap agreement associated with the Term Loan C, which converted the floating interest rates on these loans to fixed interest rates.
Depreciation and amortization Depreciation and amortization for the year ended December 31, 2024 was $12.0 million compared to $4.9 million in the same period in the prior year, reflecting an increase of $7.2 million, or 147.2%. This increase was primarily attributable to the amortization of intangible assets from our recent intangible asset acquisitions and branch conversions.
This increase was primarily attributable to the amortization of intangible assets from our recent intangible asset acquisitions. 55 Table of contents Interest expense Interest expense for the year ended December 31, 2025 decreased to $0.3 million compared to $2.2 million in the same period in the prior year, due to the repayment of the Revolving Facility (as defined in the section “ Liquidity and capital resources ”) during August 2024.
This income is included in Adjusted EBITDA as we view our total interest and investment income as an integral part of our business model and earnings stream until deployed. Adjusted Free Cash Flow. Adjusted Free Cash Flow is a supplemental measure of our performance.
This income is included in Adjusted EBITDA as we view our total interest and investment income as an integral part of our business model and earnings stream until deployed. (2) During the second quarter of 2025, a gain related to the sale of non-current assets was not excluded from Adjusted EBITDA consistent with the Company’s stated definition.
The branch conversions resulted in a $18.3 million decrease in the Agency-in-a-Box commission income for the year ended December 31, 2024. Insurance Services Corporate Branches commission income for the year ended December 31, 2024 increased by $26.8 million, or 402.7%, compared to the same period in the prior year.
The expenses of our Branches are primarily commission expense, which is determined as a percentage of commission income. Insurance Services Corporate Branches commission expense for the year ended December 31, 2025 increased by $0.8 million, or 19%, compared to the same period in the prior year.
In addition to tax expenses, we also incur expenses related to our operations and we are required to make payments under the Tax Receivable Agreement.
In addition to tax expenses, we also incur expenses related to our operations and we may be required to make payments under the Tax Receivable Agreement in the future, if and when exchanges of LLC Units occur. As of December 31, 2025, no exchanges had occurred, and no amounts were payable under the Tax Receivable Agreement.
The increase of 18.4% was primarily due to commission income, representing 77.2% of the total growth, contingent income, representing 14.6% of the total growth, fee income, representing 7.1% of the total growth and other income, representing 1.1% of the total growth. See discussions below for additional information about the changes in our revenues.
Also contributing to the increase in total revenues were $4.4 million, or 50%, increase in contingent income, $2.4 million, or 23%, increase in fee income, and $0.1 million, or 9%, increase in other income, compared to the same period in the prior year. See discussions below for additional information about the changes in our revenues.
The Company recognizes a valuation allowance if it is determined that it is more likely than not that the deferred tax asset will not be realized. Estimating future taxable income is inherently uncertain and requires significant judgement. In projecting future taxable income, we consider our historical results, growth strategies, future market trends and incorporate certain other assumptions.
Estimating future taxable income is inherently uncertain and requires significant judgment. In projecting future taxable income, we consider our historical results, growth strategies, future market trends and incorporate certain other assumptions. Changes in our estimates of future taxable income, changes in tax laws or rates, or other relevant factors could result in adjustments to our valuation allowance in future periods.
We believe Organic Revenue Growth is an appropriate measure of operating performance because it eliminates the impact of acquisitions, which affects the comparability of results from period-to-period. 67 Table of contents A reconciliation of Organic Revenue and Organic Revenue Growth Rate to Total Revenue and Total Revenue Growth Rate, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Years Ended December 31, 2024 2023 2022 Total revenues $ 203,760 $ 172,043 $ 153,875 Acquisition adjustments (1) (3,687) (4,052) (375) Contingent income (8,722) (4,085) (4,620) Fee income (10,562) (8,311) (8,296) Other income (1,318) (968) (1,471) Organic Revenue $ 179,471 $ 154,627 $ 139,113 Organic Revenue Growth (2) $ 22,746 $ 15,514 $ 26,209 Total Revenue Growth Rate (3) 18.4% 11.8% 23.2% Organic Revenue Growth Rate (2) 14.5% 11.2% 23.2% (1) Represents revenues generated from the acquired businesses during the first 12 months following an acquisition.
A reconciliation of Organic Revenue and Organic Revenue Growth Rate to Total Revenue and Total Revenue Growth Rate, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Revised Calculation Methodology Applied to Current Period Years Ended December 31, 2025 2024 Total Revenues $ 248,512 $ 203,760 Acquisition adjustments (1) (17,986) (3,687) Contingent income (13,111) (8,722) Fee income (12,992) (10,562) Other income (1,441) (1,318) Policy fee income 4,392 3,538 Organic Revenue $ 207,374 $ 183,009 Prior year Organic Revenue reported $ 179,471 $ 154,627 Commission income at 12-month post acquisitions 3,687 2,098 Prior year policy fees 3,538 2,100 Other adjustments (2) (904) — Organic Revenue denominator $ 185,792 $ 158,825 Organic Revenue $ 207,374 $ 183,009 Organic Revenue denominator 185,792 158,825 Organic Revenue Growth $ 21,582 $ 24,184 Total Revenue Growth Rate (3) 22.0 % 18.4 % Organic Revenue Growth Rate (4) 11.6 % 15.2 % (1) Represents revenues generated from the acquired businesses during the first 12 months following an acquisition.
Insurance Services Corporate Branches commission expense for the year ended December 31, 2024 increased by $3.7 million, or 481.4%, compared to the same period in the prior year. The increase was primarily due to the branch conversions, as previously discussed, and the full year impact of the Book of Business acquisitions in 2023.
The increase was primarily driven by 53 Table of contents $5.7 million of Corporate Branch acquisitions and $2.4 million of Organic Revenue Growth during the year ended December 31, 2025. TWFG MGA commission income for the year ended December 31, 2025 increased by $14.4 million , or 53% , compared to the same period in the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−1 removed4 unchanged
Biggest changeThe impact of a hypothetical 100 basis point change in interest rates would have reduced/increased interest income by $0.5 million in the Consolidated Statements of Income. As of December 31, 2024, we had approximately $5.9 million under our Term Loan Credit Agreement.
Biggest changeWe do not actively invest or trade in equity securities. As of December 31, 2025, we had $155.9 million in cash and cash equivalents which earned interest income of $7.4 million . The impact of a hypothetical 100 basis point change in interest rates would have reduced/increased interest income by $0.7 million in the Consolidated Statements of Income.
Our investments are held primarily as cash and cash equivalents. These investments are subject to interest rate risk. The fair values of cash and cash equivalents as of December 31, 2024 and 2023 approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material.
Our investments are held primarily as cash and cash equivalents. These investments are subject to interest rate risk. The fair values of cash and cash equivalents as of December 31, 2025 and 2024 approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material.
We repaid the outstanding balances of our Term Loan B and Revolving Facility in full as of December 31, 2024. As of December 31, 2023, we had approximately $8.4 million and $41.0 million of borrowings outstanding under our Term Loan Credit Agreement and Revolving Facility, respectively.
As of December 31, 2025, we had approxima tely $4.0 million of borrowings outstanding und er our Term Loan Credit Agreement. We repaid the outstanding balances of our Term Loan B and Revolving Facility in full as of December 31, 2025.
These borrowings accrue interest tied to SOFR and therefore interest expense under these borrowings is subject to change. The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our consolidated financial statements. 78 Table of contents
The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our consolidated financial statements. 70 Table of contents
Removed
We do not actively invest or trade in equity securities. As of December 31, 2024, we had $195.8 million in cash and cash equivalents which earned interest income of $4.8 million for the year ended December 31, 2024.
Added
As of December 31, 2024, we had approximate ly $5.9 million of borrowings outstanding under our Term Loan Credit Agreement. These borrowings accrue interest tied to SOFR and therefore interest expense under these borrowings is subject to change.