TWFG 10-Q Quarterly Report Sept. 30, 2025

TWFG, INC.

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10-Q	Quarter ended Sept. 30, 2025
10-Q	Quarter ended June 30, 2025
10-Q	Quarter ended March 31, 2025
10-K	Fiscal year ended Dec. 31, 2024
10-Q	Quarter ended Sept. 30, 2024
10-Q	Quarter ended June 30, 2024

PROXIES

DEF 14A	Filed on April 11, 2025
DEF 14A	Filed on Dec. 31, 2024

twfg-20250930

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number 001-42177

___________________________________

TWFG, Inc.

(Exact name of registrant as specified in its charter)

___________________________________


Delaware									99-0603906
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

10055 Grogans Mill Rd. Suite 500 The Woodlands , Texas									77380
(Address of Principal Executive Offices)									(Zip Code)

( 281 ) 367-3424

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	TWFG	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No x

As of November 11, 2025, there were 15,028,681 sh ares of Class A common stock, 7,277,651 shares of Class B common stock and 33,893,810 shares of Class C common stock outstanding.

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		Page
Part I - Financial Information
	Item 1. Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2025 and 2024	1
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024	2
	Condensed Consolidated B alance Sheets as of September 30, 2025 and December 31, 2024	3
	Condensed Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Stockholders’/Members’ Equity for the three and nine months ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	6
	Notes to the Condensed Consolidated Financial Statements	8
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	41
	Item 4. Controls and Procedures	42
Part II - Other Information
	Item 1. Legal Proceedings	43
	Item 1A. Risk Factors	43
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
	Item 5. Other Information	43
	Item 6. Exhibits	44
Signatures		45

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Cautionary Note Regarding Forward-Looking Statements

We have made statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the captions entitled Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025 (our “Annual Report”) and Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of any subsequent Quarterly Reports on Form 10-Q. Many of these factors have previously been identified in filings or statements made by us or on our behalf.

Although we believe the expectations reflected in the f orward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Commonly Used Defined Terms

• “we,” “us,” “our,” the “Company,” “TWFG,” and similar references refer to: (i) TWFG, Inc. and, unless otherwise stated or the context otherwise requires, all of its subsidiaries, including TWFG Holding Company, LLC (“TWFG Holding”), for periods following the consummation of certain reorganization transactions (the “Reorganization Transactions”), including our initial public offering (“IPO”), and (ii) TWFG Holding and, unless otherwise stated or the context otherwise requires, all of its subsidiaries, for periods prior to the completion of the Reorganization Transactions, including our IPO;

• Adjusted Diluted Earnings Per Share: 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 of the Company (the “Class B Common Stock”) and Class C common stock of the Company (the “Class C Common Stock”) (together with the related limited liability company units of TWFG Holding (the “LLC Units”)) into shares of Class A common stock of the Company (“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: EBITDA adjusted to exclude equity-based compensation and other non-operating items, including certain nonrecurring or non-operating gains or losses ;

• Adjusted EBITDA Margin: Adjusted EBITDA divided by total revenues;

• Adjusted Free Cash Flow: Cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property and equipment and acquisition-related cos ts;

• Adjusted Net Income: Net income (the most directly comparable GAAP measure) before amortization, non-recurring or non-operating income an d 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 Margin: Adjusted Net Income divided by total revenues;

• Admitted: The insurance market comprising insurance carriers licensed to write business on an “admitted” basis by the insurance commissioner of the state in which the risk is located. Insurance rates and forms in this market are highly regulated by each state and coverages are largely uniform;

• Book of Business: Active Client list;

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• Branch: An independent agency that contracts with our Insurance Services offering, operates its agency through TWFG’s “Agency-in-a-Box” and with TWFG’s branding, and receives all benefits of working with TWFG, including a work and revenue share, TWFG back-office support, marketing and access to a fully integrated agency management system. TWFG branding is restricted to the Branches and Corporate Branches, all of which are listed on our website and can be found using the location filter. Branches and Corporate Branches are exclusive to TWFG, meaning that they can only write certain insurance business through TWFG;

• Client: Individual or entity that purchases an insurance policy or seeks to purchase an insurance policy from TWFG Agencies;

• Corporate Branch: An agency within our Insurance Services offering that is wholly owned by TWFG;

• EBITDA: Earnings before interest, income taxes, depreciation and amortization;

• M&A: Mergers and acquisitions;

• MGA: Managing general agency;

• MGA Agencies: Independent agencies that contract with TWFG MGA to obtain access to additional insurance carriers or programs. TWFG MGA Agencies do not include TWFG branding and are not exclusive to TWFG;

• Organic Revenue: Total revenues (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, non-policy fee income, other income and those revenues generated from acquired businesses;

• Organic Revenue Growth: Organic Revenue Growth is the change in Organic Revenue period-to-period;

• P&C: Property and casualty insurance;

• Total Written Premium: The total amount of current premium (net of cancellations) placed with insurance carriers;

• TWFG Agencies: Branches, Corporate Branches and MGA Agencies; and

• TWFG MGA: TWFG’s managing general agency.

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Part I - Financial Information

Item 1. Financial Statements

TWFG, Inc.

Condensed Consolidated Statements of Income

(Amounts in thousands, except share and per share data)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenues
Commission income (related party of $ 3,939 and $ 3,026 for the three months ended and $ 9,858 and $ 6,047 for the nine months ended September 30, 2025 and 2024, respectively)	$	58,270	$	48,240	$	161,617	$	139,447
Contingent income	2,095		1,383		5,791		3,717
Fee income (related party of $ 869 and $ 884 for the three months ended and $ 2,596 and $ 1,799 for the nine months ended September 30, 2025 and 2024, respectively)	3,466		2,890		9,806		7,811
Other income	292		350		1,040		1,042
Total revenues	64,123		52,863		178,254		152,017
Expenses
Commission expense	34,639		30,766		100,604		89,171
Salaries and employee benefits	9,929		8,331		27,618		21,401
Other administrative expenses (related party of $ 785 and $ 339 for the three months ended and $ 2,333 and $ 1,122 for the nine months ended September 30, 2025 and 2024, respectively)	5,194		4,813		15,318		11,687
Depreciation and amortization	5,327		2,985		12,587		8,966
Total operating expenses	55,089		46,895		156,127		131,225
Operating income	9,034		5,968		22,127		20,792
Interest expense	70		411		221		2,125
Interest income	1,574		1,777		5,188		2,202
Other non-operating income (expense), net	59		( 4 )		632		8
Income before tax	10,597		7,330		27,726		20,877
Income tax expense	977		437		2,253		437


Net income	9,620		6,893		25,473		20,440
Less: net income attributable to noncontrolling interests	7,898		5,739		20,456		19,286
Net income attributable to TWFG, Inc.	$	1,722	$	1,154	$	5,017	$	1,154








Weighted average shares of common stock outstanding (see Note 12):
Basic	15,005,426		14,722,685		14,933,242		14,722,685
Diluted	15,100,655		14,890,382		15,088,031		14,890,382
Earnings per share (see Note 12):






Basic	$	0.11	$	0.08	$	0.34	$	0.08
Diluted	$	0.11	$	0.08	$	0.34	$	0.08

See Notes to the Condensed Consolidated Financial Statements

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TWFG, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Amounts in thousands)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income	$	9,620	$	6,893	$	25,473	$	20,440
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on derivative instruments during the period	3		( 77 )		( 14 )		68
Reclassification of realized gains (losses) on derivative instruments included in net income during the period	( 44 )		( 80 )		( 145 )		( 258 )
Total other comprehensive income (loss), net of tax	( 41 )		( 157 )		( 159 )		( 190 )
Comprehensive income	9,579		6,736		25,314		20,250
Less: comprehensive income attributable to noncontrolling interests	7,869		5,615		20,340		19,129
Comprehensive income attributable to TWFG, Inc.	$	1,710	$	1,121	$	4,974	$	1,121

See Notes to the Condensed Consolidated Financial Statements

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TWFG, Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share/unit data)

(unaudited)


	September 30, 2025		December 31, 2024
Assets
Current assets
Cash and cash equivalents	$	150,985	$	195,772
Restricted cash	11,557		9,551
Commissions receivable, net	27,529		27,067
Accounts receivable	8,169		7,839

Other current assets, net	13,087		1,619
Total current assets	211,327		241,848
Non-current assets
Intangible assets, net	129,386		72,978
Property and equipment, net	3,209		3,499
Lease right-of-use assets, net	4,515		4,493
Other non-current assets	734		610
Total assets	$	349,171	$	323,428

Liabilities, Redeemable Noncontrolling Interest and Equity
Current liabilities
Commissions payable	$	15,897	$	13,848
Carrier liabilities	14,074		12,392

Operating lease liabilities, current	1,393		1,013
Short-term bank debt	1,956		1,912
Deferred acquisition payable, current	2,508		601
Other current liabilities	9,309		9,851
Total current liabilities	45,137		39,617
Non-current liabilities
Operating lease liabilities, net of current portion	3,135		3,372
Long-term bank debt	2,534		4,007
Deferred acquisition payable, non-current	2,620		1,122
Other non-current liabilities	—		24
Total liabilities	53,426		48,142
Commitments and contingencies (Note 13)


Redeemable noncontrolling interest	11,427		—
Stockholders' Equity



Class A common stock ($ 0.01 par value per share - 300,000,000 authorized, 15,005,426 and 14,811,874 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively )	150		148
Class B common stock ($ 0.00001 par value per share - 100,000,000 authorized, 7,277,651 shares issued and outstanding at September 30, 2025 and December 31, 2024)	—		—
Class C common stock ($ 0.00001 par value per share - 100,000,000 authorized, 33,893,810 shares issued and outstanding at September 30, 2025 and December 31, 2024)	—		—
Additional paid-in capital	58,869		58,365
Retained earnings	20,305		15,288
Accumulated other comprehensive income	40		83
Total stockholders' equity attributable to TWFG, Inc.	79,364		73,884
Noncontrolling interests	204,954		201,402
Total stockholders' equity	284,318		275,286
Total liabilities, redeemable noncontrolling interest and equity	$	349,171	$	323,428

See Notes to the Condensed Consolidated Financial Statements

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TWFG, Inc.

Condensed Consolidated Statements of Changes in Redeemable

Noncontrolling Interest and Stockholders’/Members’ Equity

(Amounts in thousands, except share/unit data)

(unaudited)


For the Nine Months Ended September 30, 2025
	Class A Common Stock		Class B Voting Stock			Class C Voting Stock
		Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity Attributable to TWFG, Inc.		Noncontrolling Interests		Total Stockholders’ Equity		Redeemable Noncontrolling Interest
Balance at December 31, 2024		14,811,874	$	148	7,277,651	$	—	33,893,810	$	—	$	58,365	$	15,288	$	83	$	73,884	$	201,402	$	275,286	$	—
Net income		—	—		—	—		—	—		—		1,338		—		1,338		5,515		6,853		—

Cash distributions to members		—	—		—	—		—	—		—		—		—		—		( 2,024 )		( 2,024 )		—
Other comprehensive income		—	—		—	—		—	—		—		—		( 18 )		( 18 )		( 50 )		( 68 )		—
Stock-based compensation		—	—		—	—		—	—		1,204		—		—		1,204		—		1,204		—
Vesting of restricted stock units		134,018	1		—	—		—	—		—		—		—		1		—		1		—
Tax withholding on vesting of equity awards		( 41,809 )	—		—	—		—	—		( 1,195 )		—		—		( 1,195 )		—		( 1,195 )		—
Balance at March 31, 2025		14,904,083	$	149	7,277,651	$	—	33,893,810	$	—	$	58,374	$	16,626	$	65	$	75,214	$	204,843	$	280,057	$	—
Net income		—	—		—	—		—	—		—		1,957		—		1,957		6,970		8,927		73

Cash distributions to members		—	—		—	—		—	—		—		—		—		—		( 11,239 )		( 11,239 )		—
Other comprehensive income		—	—		—	—		—	—		—		—		( 13 )		( 13 )		( 37 )		( 50 )		—
Acquisition of TWFG MGA FL, LLC		—	—		—	—		—	—		—		—		—		—		—		—		9,688
Stock-based compensation		—	—		—	—		—	—		1,515		—		—		1,515		—		1,515		—


Balance at June 30, 2025		14,904,083	$	149	7,277,651	$	—	33,893,810	$	—	$	59,889	$	18,583	$	52	$	78,673	$	200,537	$	279,210	$	9,761
Net income		—	—		—	—		—	—		—		1,722		—		1,722		7,033		8,755		865

Cash distributions to members		—	—		—	—		—	—		—		—		—		—		( 2,587 )		( 2,587 )		—
Other comprehensive income		—	—		—	—		—	—		—		—		( 12 )		( 12 )		( 29 )		( 41 )		—
Acquisition of TWFG MGA FL, LLC		—	—		—	—		—	—		—		—		—		—		—		—		801
Stock-based compensation		—	—		—	—		—	—		987		—		—		987		—		987		—
Vesting of restricted stock units		151,174	1		—	—		—	—		—		—		—		1		—		1		—
Tax withholding on vesting of equity awards		( 49,831 )	—		—	—		—	—		( 1,562 )		—		—		( 1,562 )		—		( 1,562 )		—
Shelf registration costs		—	—		—	—		—	—		( 445 )		—		—		( 445 )		—		( 445 )		—
Balance at September 30, 2025		15,005,426	$	150	7,277,651	$	—	33,893,810	$	—	$	58,869	$	20,305	$	40	$	79,364	$	204,954	$	284,318	$	11,427

See Notes to the Condensed Consolidated Financial Statements

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TWFG, Inc.

Condensed Consolidated Statements of Changes in Redeemable

Noncontrolling Interest and Stockholders’/Members’ Equity

(Amounts in thousands, except share/unit data)

(unaudited)


	Members’ Equity			Class A Common Stock			Class B Voting Stock			Class C Voting Stock
	Units	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity Attributable to TWFG, Inc.		Noncontrolling Interests		Total Stockholders’ Equity
Balance at December 31, 2023	631,750	$	632	–	$	—	–	$	—	–	$	—	$	25,114	$	4,805	$	500	$	31,051	$	—	$	31,051
Net income	–	—		–	—		–	—		–	—		—		6,629		—		6,629		—		6,629
Shares issued	27,689	28		–	—		–	—		–	—		30,018		—		—		30,046		—		30,046
Cash distributions to members	–	—		–	—		–	—		–	—		—		( 2,420 )		—		( 2,420 )		—		( 2,420 )
Other comprehensive income	–	—		–	—		–	—		–	—		—		—		23		23		—		23
Balance at March 31, 2024	659,439	$	660	–	$	—	–	$	—	–	$	—	$	55,132	$	9,014	$	523	$	65,329	$	—	$	65,329
Net income	–	—		–	—		–	—		–	—		—		6,918		—		6,918		—		6,918
Cash distributions to members	–	—		–	—		–	—		–	—		—		( 4,679 )		—		( 4,679 )		—		( 4,679 )
Other comprehensive loss	–	—		–	—		–	—		–	—		—		—		( 56 )		( 56 )		—		( 56 )
Balance at June 30, 2024	659,439	$	660	–	$	—	–	$	—	–	$	—	$	55,132	$	11,253	$	467	$	67,512	$	—	$	67,512
Net income prior to the Reorganization Transactions and IPO (see Note 1)	—	—		—	—		—	—		—	—		—		1,290		—		1,290		—		1,290
Other comprehensive loss prior to the Reorganization Transactions and IPO	—	—		—	—		—	—		—	—		—		—		( 33 )		( 33 )		—		( 33 )
Effect of the Reorganization Transactions	( 659,439 )	( 660 )		2,161,874	22		7,277,651	—		33,893,810	—		( 191,733 )		—		( 319 )		( 192,690 )		192,690		—
Issuance of Class A common stock at the IPO, net of underwriting costs	—	—		12,650,000	126		—	—		—	—		200,548		—		—		200,674		—		200,674
Capitalized offering costs	—	—		—	—		—	—		—	—		( 7,800 )		—		—		( 7,800 )		—		( 7,800 )
Net income after the Reorganization Transactions and IPO	—	—		—	—		—	—		—	—		—		1,154		—		1,154		4,449		5,603
Other comprehensive loss after the Reorganization Transactions and IPO	—	—		—	—		—	—		—	—		—		—		( 33 )		( 33 )		( 91 )		( 124 )
Stock-based compensation	—	—		—	—		—	—		—	—		1,012		—		—		1,012		—		1,012
Balance at September 30, 2024	—	$	—	14,811,874	$	148	7,277,651	$	—	33,893,810	$	—	$	57,159	$	13,697	$	82	$	71,086	$	197,048	$	268,134

See Notes to the Condensed Consolidated Financial Statements

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TWFG, Inc.

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(unaudited)


	Nine Months Ended September 30,
	2025		2024
Cash Flows from Operating Activities
Net income	$	25,473	$	20,440


Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	12,587		8,966
Gains on sales of intangible assets and property and equipment, net	( 616 )		( 86 )
Stock-based compensation expense	3,706		1,012
Non-cash lease expense	988		756
Other non-cash items	( 8 )		( 10 )
Change in:
Commission receivable, net	( 462 )		( 3,889 )
Accounts receivable	( 330 )		( 2,731 )
Other current and non-current assets	( 1,751 )		151
Commissions payable	2,049		1,951

Operating lease liabilities	( 857 )		( 802 )
Other liabilities	( 566 )		3,121


Net cash provided by operating activities	40,213		28,879
Cash Flows from Investing Activities
Proceeds from sale of books of business	573		84
Proceeds from sale of property and equipment	49		2

Purchase of intangible assets	( 54,239 )		( 21,395 )
Purchase of property and equipment	( 128 )		( 280 )

Other investment	( 10,000 )		—



Net cash used in investing activities	( 63,745 )		( 21,589 )
Cash Flows from Financing Activities

Repayment of borrowings	( 1,428 )		( 42,968 )
Distributions to members	( 15,850 )		( 7,099 )

Tax withholding on vesting of equity awards	( 2,757 )		—
Net proceeds from IPO, net of underwriting costs	—		200,674
Payment of deferred offering costs	—		( 7,122 )
Payment of shelf registration costs	( 445 )		—
Payment of equity issuance costs	—		( 38 )
Receipts of carrier liabilities	3,372		5,072
Payments for carrier liabilities	( 1,690 )		( 525 )
Payment of deferred acquisition payable	( 451 )		( 847 )


Net cash (used in) provided by financing activities	( 19,249 )		147,147

See Notes to the Condensed Consolidated Financial Statements

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TWFG, Inc.

Condensed Consolidated Statement of Cash Flows (continued)

(Amounts in thousands)

(unaudited)


	Nine Months Ended September 30,
	2025		2024



Net change in cash, cash equivalents and restricted cash	( 42,781 )		154,437


Cash, cash equivalents and restricted cash - beginning balance	205,323		46,468
Cash, cash equivalents and restricted cash - ending balance	$	162,542	$	200,905








Net change in cash and cash equivalents	$	( 44,787 )	$	151,899
Net change in restricted cash	2,006		2,538
Net change in cash, cash equivalents and restricted cash	$	( 42,781 )	$	154,437

Supplemental disclosures of cash flow information:
Cash paid for interest	$	152	$	2,298
Cash paid for taxes	$	2,584	$	—

Non-cash investing and financing activities:
Additions to intangible assets and offsetting additions to deferred acquisition payable	$	3,856	$	396
Additions to intangible assets and offsetting additions to redeemable noncontrolling interest	$	10,489	$	—
Additions to intangible assets and offsetting additions to members' equity	$	—	$	25,560
Additions to intangible assets and offsetting additions to other current liabilities	$	—	$	8

Settlement of deferred acquisition payable through the issuance of Class A common units	$	—	$	4,524

See Notes to the Condensed Consolidated Financial Statements

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TWFG, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

TWFG, Inc. (“TWFG” or the “Company”) was incorporated as a Delaware corporation on January 8, 2024 for the purpose of facilitating an initial public offering (“IPO”). TWFG is a holding company with its principal asset being a controlling ownership in TWFG Holding Company, LLC (“TWFG Holding”) and its consolidated subsidiaries. All of TWFG’s business is conducted through TWFG Holding and its consolidated subsidiaries, and the financial results of TWFG Holding and its consolidated subsidiaries are included in the Condensed Consolidated Financial Statements of TWFG.

TWFG is a leading, high-growth, independent distribution platform for personal and commercial insurance in the United States. TWFG and its subsidiaries operate through one reportable segment, which is discussed in more detail in Note 14 Segment.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of the Company and its consolidated subsidiaries are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The interim financial information is unaudited but reflects all normal adjustments that are necessary to provide a fair statement of results for the interim periods presented. Accordingly, these Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2025 (the “Annual Report”). The Condensed Consolidated Balance Sheet as of December 31, 2024 has been derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Correction of Prior Period Balances

Subsequent to the issuance of the Company’s consolidated financial statements as of and for the nine months ended September 30, 2024, management identified an immaterial presentation error in which certain amounts of investment income were previously included within revenue instead of within non-operating income. As a result, the Company restated the prior period financial statements to correct the errors within the Condensed Consolidated Statements of Income for all periods presented to reflect the correction. Additionally, comparative prior period amounts in the applicable notes to the Condensed Consolidated Financial Statements have been corrected.

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Management evaluated the materiality of the error and concluded that it is not material to the prior period financial statements. The correction had no impact on previously reported net income. The following table presents the effects of the correction to the Company’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024.


	Three Months Ended September 30,						Nine Months Ended September 30,
	As Reported		Adjustment		As Corrected		As Reported		Adjustment		As Corrected
Revenues
Commission income	$	48,240	$	—	$	48,240	$	139,447	$	—	$	139,447
Contingent income	1,383		—		1,383		3,717		—		3,717
Fee income	2,890		—		2,890		7,811		—		7,811
Other income	2,127		( 1,777 )		350		3,244		( 2,202 )		1,042
Total revenues	$	54,640	$	( 1,777 )	$	52,863	$	154,219	$	( 2,202 )	$	152,017

Operating income	$	7,745	$	( 1,777 )	$	5,968	$	22,994	$	( 2,202 )	$	20,792
Interest expense	411		—		411		2,125		—		2,125
Interest income	—		1,777		1,777		—		2,202		2,202
Other non-operating income (expense), net	( 4 )		—		( 4 )		8		—		8
Income before tax	$	7,330	$	—	$	7,330	$	20,877	$	—	$	20,877

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements and notes thereto requires management to make estimates, judgments, and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and in the notes thereto. Such estimates and assumptions could change in the future as circumstances change or more information becomes available, which could affect the amounts reported and disclosed herein.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no material changes in the Company’s significant accounting policies from those that were disclosed for the year ended December 31, 2024 in the Annual Report.

Recent Accounting Pronouncements Not Yet Adopted

Disaggregation of Income Statement Expense

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expense (DISE), that requires an entity to disclose in the footnote a tabular format that disaggregates relevant expense captions in to the following natural expense categories: purchase of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, depletion and amortization or other amounts of depletion expense. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application and early adoption is permitted. The Company is currently evaluating the impacts.

Income Taxes

In December 2023 , the FASB issued ASU 2023-09, Improvement to Income Tax Disclosures, that requires disaggregated income tax disclosures for specific categories on the effective tax rate reconciliation, and additional information about federal, state, local and foreign income taxes. The standard also requires annual disclosure of income taxes paid (net of refunds received), disaggregated by jurisdiction. This guidance is effective for fiscal years beginning after December 15, 2024. The standard is to be applied on a prospective basis, although optional retrospective application is permitted. The Company will adopt ASU 2023-09 at the end of the fiscal year December 31, 2025 and does not expect a material effect on its Consolidated Financial Statements and tax disclosures related to the adoption.

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3. REVENUES

The following table presents the disaggregation of revenues by major source (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Commission income	$	58,270	$	48,240	$	161,617	$	139,447
Contingent income	2,095		1,383		5,791		3,717
Fee income
Policy fees	1,175		1,064		3,309		2,510
Branch fees	1,289		1,172		3,961		3,523
License fees	886		495		2,053		1,454
TPA fees	116		159		483		324
Other income	292		350		1,040		1,042
Total revenues	$	64,123	$	52,863	$	178,254	$	152,017

The Company operates through two primary offerings, which are Insurance Services and TWFG MGA. The following table presents the disaggregation of revenues by offerings (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Insurance Services
Agency-in-a-box	$	37,583	$	33,826	$	112,895	$	99,976
Corporate Branches	12,188		9,248		31,804		25,875
TWFG MGA	13,944		9,432		32,372		25,057
Other	408		357		1,183		1,109
Total revenues	$	64,123	$	52,863	$	178,254	$	152,017

As of September 30, 2025 and December 31, 2024, the commissions receivable, net reported in the Condensed Consolidated Balance Sheets had a balan ce of $ 27.5 million and $ 27.1 million, respectively. The Company had no contract liabilities as of September 30, 2025, December 31, 2024, and January 1, 2024.

The Company’s allowance for expected credit losses is determined based on a combina tion of factors: credit quality indicators, including, but not limited to, payment status, historical charge-offs, financial strength of the insurance carriers for com missions receivable, and production performance and age of balances for receivables from agents.

The following table provides a summary of changes in the Company’s allowance for expected credit losses
(in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Beginning of period	$	419	$	382	$	415	$	312

Increase in provision	1		—		5		70
Decrease in provision	—		—		—		—
End of period	$	420	$	382	$	420	$	382

The Progressive Corporation accounted for 11 % and 12 % of total revenues for the three and nine months ended September 30, 2025, respectively, and 11 % and 12 % of total revenues for the three and nine months ended September 30, 2024, respectively. No other customers individually accounted for 10% or more of the Company’s total revenues for the three and nine months ended September 30, 2025 and 2024.

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4. INTANGIBLES, ACQUISITIONS, AND DISPOSALS

During the nine months ended September 30, 2025, the Company acquired customer lists and computer software totaling $ 47.6 million, of which $ 44.0 million and $ 0.5 million was paid in cash at closings, respectively. The additional $ 3.1 million relates to future contingent cash payments for the acquired customer lists which are recorded in the deferred acquisition payable on the Condensed Consolidated Balance Sheets.

In June 2025, the Company acquired a 50.1 % equity interest in TWFG MGA FL, LLC for a total cash consideration of $ 9.7 million at closing. The acquisition agreement also provides for a contingent payment of up to $ 5.0 million, payable upon achievement of defined performance metrics within one year of closing, and includes a put option for the remaining 49.9 % interest. The transaction was accounted for as an asset acquisition under the cost accumulation model, with the acquired customer relationship intangible asset identified as the single substantive asset acquired.

The Company recognized a customer relationship intangible asset with an acquisition-date fair value of $ 21.0 million, and a redeemable noncontrolling interest of $ 10.5 million, representing the fair value of the ownership interest held by AIH Sub, Inc. The customer relationship intangible asset is being amortized on a straight-line basis over six years .

Subsequent to the acquisition date, the estimated fair value of the contingent consideration associated with the earn-out increased due to higher expected policy volume and performance relative to the original assumptions. This change in estimate is reflected in the measurement of the related intangible asset in current and future periods in accordance with the cost accumulation model.

In October 2025, the Company’s Florida MGA began servicing a meaningful number of new policies. This development is expected to result in achievement of the full $ 5.0 million earn out for the June 2025 acquisition to be recognized in the 4th quarter of 2025 .

Additionally, the Company acquired 5.7 % equity interest in AIH Sub, Inc. for $ 0.3 million in cash, a related party as a result of this transaction. (See Note 7 Stockholders’ Equity for more information regarding the redeemable noncontrolling interest.)

The Company recognized a net gain on disposals of $ 0.6 million for the nine months ended September 30, 2025. The gains on disposals were attributable to the sale of books of business to third parties. Occasionally, the Company will sell books of business that it believes to be in its best interest to dispose.

The following table presents information about the Company’s intangible assets (in thousands):


	September 30, 2025										December 31, 2024
	Customer Lists		Computer Software		Non-Compete Agreements		Customer Relationship		Total		Customer Lists		Computer Software		Non-Compete Agreements		Total
Cost
Balance, beginning of period	$	96,553	$	8,564	$	275	$	—	$	105,392	$	48,997	$	7,858	$	275	$	57,130
Additions (1)	47,111		454		—		21,020		68,585		47,556		706		—		48,262
Disposals	—		—		—		—		—		—		—		—		—
Balance, end of period	143,664		9,018		275		21,020		173,977		96,553		8,564		275		105,392
Accumulated amortization	36,116		7,188		275		1,012		44,591		25,482		6,660		272		32,414
Net carrying amount, end of period	$	107,548	$	1,830	$	—	$	20,008	$	129,386	$	71,071	$	1,904	$	3	$	72,978


	2025										2024
	Customer Lists		Computer Software		Non-Compete Agreements		Customer Relationship		Total		Customer Lists		Computer Software		Non-Compete Agreements		Total
Three Months Ended September 30,
Amortization expense	$	4,081	$	175	$	—	$	949	$	5,205	$	2,675	$	240	$	5	$	2,920
Nine Months Ended September 30,
Amortization expense	$	10,634	$	527	$	3	$	1,012	$	12,176	$	7,986	$	747	$	38	$	8,771

(1) Customer Lists, Computer Software, and Customer Relationship intangible assets acquired during the nine months ended September 30, 2025 have a weighted average amortization period of 7.5 years, 4.5 years, and 5.5 years, respectively. The weighted-average amortization period for all intangible assets acquired in 2025 is 7 years.

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The following table presents the future amortization for intangible assets as of September 30, 2025 (in thousands):


	Customer Lists		Computer Software		Customer Relationship
Remainder of 2025	$	4,159	$	171	$	876
2026	16,594		621		3,503
2027	16,547		523		3,503
2028	16,510		336		3,503
2029	16,284		146		3,503
Thereafter	37,454		33		5,120
Total	$	107,548	$	1,830	$	20,008

5. OTHER CURRENT LIABILITIES

Other current liabilities co nsisted of the following as of the dates indicated (in thousands):


	September 30, 2025		December 31, 2024
Accrued salaries and bonus expenses	$	2,329	$	1,574
Accrued professional fees	1,222		1,256
Accounts payable	1,665		3,233
Income taxes payable	941		1,495
Other current liabilities	3,152		2,293
	$	9,309	$	9,851

6. DEBT

The following is a summary of the Company’s outstanding debt (in thousands):


	September 30, 2025		December 31, 2024
Term Loans

7 -year term loan, periodic interest and monthly principal payments, Daily Simple SOFR + 0.11448 % SOFR adjustment, matures December 6, 2027	$	4,490	$	5,919
Total term loans	4,490		5,919


Deferred acquisition payable	1,271		1,723
Total debt	5,761		7,642
Current maturities	( 2,552 )		( 2,513 )
Long-term debt	$	3,209	$	5,129

As of September 30, 2025, current and non-current deferred acquisition payable was comprised of deferred acquisition notes of $ 1.3 million and deferred acquisition payables of $ 3.8 million on the Condensed Consolidated Balance Sheet. In the prior year, current and non-current deferred acquisition payable was comprised of deferred acquisition notes of $ 1.7 million and deferred acquisition payables of zero . For the period ended September 30, 2025, the current portion of deferred acquisition notes and deferred acquisition payables were $ 0.6 million and $ 1.9 million, respectively. In the prior year, the current portion of deferred acquisition notes and deferred acquisition payables were $ 0.6 million and zero , respectively.

Future maturities of the Company’s outstanding debt as of September 30, 2025 were as follows (in thousands):


Remainder of 2025	$	634
2026	2,565
2027	2,296
2028	147
2029	119
Thereafter	—
Total	$	5,761

F or the three and nine months ended September 30, 2025, the Company incurred interest expense of $ 0.1 million and $ 0.2 million, respectively. For the three and nine months ended September 30, 2024, the Company incurred interest expense of $ 0.4 million and $ 2.1 million, respectively.

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Term Loans

The 7-yea r term loan was entered into on December 4, 2020, with the original principal of $ 13.0 million, which matures on December 6, 2027 . The Company entered into interest rate swap agreements to manage its exposure to interest rate fluctuations related to its term loans.

Revolving Credit Agreement

The Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank National Association provides a revolving credit facility to the Company, with commitments in an aggregate principal amount not to exceed $ 50.0 million (as amended on June 20, 2024, the “Revolving Facility”). Borrowings constituting revolving loans under the Revolving Credit Agreement incur interest at the Term SOFR Rate (as defined therein) for the applicable interest period plus a margin based on the consolidated leverage ratio of the Company between 2 % and 2.75 %, and a 0.10 % adjustment. The borrowings under the Revolving Facility may be used by the Company for permitted acquisitions, working capital and general corporate purposes. The Company pays a commitment fee on unutilized amounts under the Revolving Facility of 0.20 % up to 0.35 % based on the consolidated leverage ratio. For the period ended September 30, 2025 and December 31, 2024, the Revolving Facility had an unutilized capacity of $ 50.0 million and $ 50.0 million, respectively.

Each of the Revolving Facility and the term lo ans requires the Company to maintain a consolidated leverage ratio of no greater than 2.00 to 1. 00 (or, after the occurrence of certain acquisitions, 2.50 to 1.00). As of September 30, 2025 and December 31, 2024, the Company was in compliance with these covenants. The carrying amount of the Company’s variable rate debt as of September 30, 2025 and December 31, 2024 approximates fair value due to the short-term reset of the interest rate based on SOFR and the absence of a credit spread.

Deferred Acquisition Payable

In April 2023, the Company acquired customer list intangible assets for a total consideration of $ 4.3 million, of which $ 3.0 million was paid in cash at closing. The remaining balance was settled through the issuance of a note payable monthly over three years beginning in April 2024 and bears an annual interest of 3.75 %.

In March 2024, the Company acquired customer list intangible assets, of which approximately $ 0.4 million of the purchase price was settled through the issuance of a non-interest bearing note and was recorded as deferred acquisition payable. The note is payable monthly over a period of 70 months. The deferred acquisition payable was recorded at fair value with an imputed interest rate of 5.00 %.

In October 2024, the Company acquired customer list intangible assets, of which approximately $ 0.4 million of the purchase price was settled through the issuance of a non-interest bearing note and was recorded as deferred acquisition payable. The note is payable monthly over a period of 60 months. The deferred acquisition payable was recorded at fair value with an annual imputed interest rate of 4.69 %.

The portion of the Company’s acquisition-related notes due within 12 months or less from the financial statement date is reported in the Condensed Consolidated Balance Sheets as deferred acquisition payable, current, while amounts due after 12 months from the financial statement date are included in deferred acquisition payable, non-current. See Note 4 Intangible Assets and Acquisitions and Note 11 Related Party Transactions for more information regarding the purchase of the customer list intangible assets.

Fair value information about financial instruments not measured at fair value

The following table presents the Company’s debt that is not measured at fair value on a recurring basis:


	September 30, 2025				December 31, 2024
	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt
Current portion of long-term debt	$	1,956	$	1,956	$	1,912	$	1,912
Long-term debt (1)	$	2,534	$	2,534	$	4,007	$	4,007
Deferred acquisition payable (2)	$	5,128	$	5,031	$	1,723	$	1,669

(1) The carrying value of the Company’s borrowings under its various credit agreements approximates its fair value due to the variable interest rate based upon adjusted SOFR.

(2) The deferred acquisition payable represents cash payments that are due to the seller paid out over a future period. The fair value of the acquisition payable is based on an estimate using a discounted cash flow analysis and current finance rates for similar types of financing arrangements.

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7. STOCKHOLDERS’ EQUITY

The Company’s board of directors (the “Board”) approved an amended and restated certificate of incorporation (the “Restated Certificate of Incorporation”), which became effective on July 17, 2024 in connection with the IPO. The Restated Certificate of Incorporation authorizes the issuance of three classes of common stock: Class A common stock, par value $ 0.01 per share (“Class A Common Stock”), non-economic Class B common stock, par value $ 0.00001 per share (“Class B Common Stock” or “Class B Voting Stock”), and non-economic Class C common stock, par value $ 0.00001 per share (“Class C Common Stock” or “Class C Voting Stock”), and preferred stock.

In connection with the IPO on July 19, 2024, the Company issued 11,000,000 shares of Class A Common Stock, at a price of $ 17.00 per share. On July 23, 2024, the underwriters purchased an additional 1,650,000 shares of Class A Common Stock in connection with the underwriters’ full exercise of their option to purchase additional shares, at a price of $ 17.00 per share. The Company received approximately $ 192.9 million of net proceeds, including from the full exercise of the underwriters’ option, after deducting underwriting discounts and commissions of approximat ely $ 14.4 million and related offering expenses of approximately $ 7.8 million. In connection with certain reorganization transactions immediately prior to the IPO (the “Reorganization Transactions”), the Company issued (i) 2,161,874 shares of Class A Common Stock in exchange for 342,362 limited liability company units of TWFG Holding (“LLC Units”) held by Bunch Family Holdings, LLC (“Bunch Holdings”) and 1,819,512 LLC Units held by certain individuals and entities (the “New Members”), (ii) 7,277,651 shares of Class B Common Stock to RenaissanceRe Ventures U.S. LLC (“RenRe”) and GHC Woodlands Holdings LLC (“GHC”) for consideration of $ 0.00001 per share and (iii) 33,893,810 shares of Class C Common Stock to Bunch Holdings for consideration of $ 0.00001 per share. Immediately after the IPO and the Reorganization Transactions, 14,811,874 shares of Class A Common Stock were outstanding, including 12,650,000 shares issued in the IPO plus 342,362 shares issued to Bunch Holdings and 1,819,512 shares issued to New Members, and 7,277,651 shares of Class B Common Stock and 33,893,810 shares of Class C Common Stock were outstanding.

As of September 30, 2025, an additional 193,552 shares of Class A Common Stock were issued upon vesting of restricted stock units (“RSUs”) in accordance with the Company's 2024 Omnibus Incentive Plan (the “2024 Incentive Plan”). See Note 8 Stock-Based Compensation.

The following table summarizes the capitalization and voting rights of the Company’s classes of stock as of September 30, 2025:


	Authorized	Par Value		Issued & Outstanding	Votes per share	Economic Rights
Preferred stock	50,000,000	$	0.01	None

Common stock:
Class A (1)	300,000,000	$	0.01	15,005,426	1	Yes
Class B (1)	100,000,000	$	0.00001	7,277,651	1	No
Class C (2)	100,000,000	$	0.00001	33,893,810	10	No

(1) Each share of Class A Common Stock and non-economic Class B Common Stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders.

(2) Each share of non-economic Class C Common Stock entitles its holders to ten votes per share on all matters presented to the stockholders and on which the holders of the Class C Common Stock are entitled to vote; provided, that each share of Class C Common Stock will be entitled to one vote per share automatically (i) 12 months following the death or disability of Richard F. (“Gordy”) Bunch III or (ii) upon the first trading day on or after such date that the outstanding shares of non-economic Class C Common Stock represent less than 10 % of the then-outstanding Class A Common Stock, non-economic Class B Common Stock and non-economic Class C Common Stock, which, in either instance, may be extended to 18 months upon affirmative approval of a majority of the independent directors.

The Board is authorized to direct the Company to issue shares of preferred stock in one or more series and has the discretion to determine the number and designation of such series and the powers, rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Through September 30, 2025, no shares of preferred stock have been issued.

Holders of Class A Common Stock are entitled to receive dividends when and if declared by the Board out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock. Upon liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of Class A Common Stock will be entitled to receive pro rata our remaining assets available for distribution.

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Holders of the Company’s non-economic Class B and non-economic Class C Common Stock do not have any right to receive dividends or to receive a distribution upon a liquidation or winding up of the Company.

Noncontrolling interests

Noncontrolling interests represent the economic interests of TWFG Holding held by Bunch Holdings, RenRe and GHC (collectively, the “Pre-IPO LLC Members” or “Continuing Pre-IPO LLC Members”).

The following table summarizes the ownership of TWFG Holding as of September 30, 2025:


Owner	Units Owned	Ownership percentage
TWFG, Inc.	15,005,426	26.7	%
Noncontrolling interests	41,171,461	73.3	%
Total	56,176,887	100.0	%

Redeemable noncontrolling interest

In June 2025, the Company completed the acquisition of a 50.1 % controlling interest in TWFG MGA FL, LLC. The remaining interest is held by an unrelated third party with a right to put its interest to the Company beginning in 2030 and ending in 2033. The put right consideration to be paid is based on operational performance of TWFG MGA FL, LLC as determined at the time the right is exercised. See Note 4 Intangible Assets and Acquisitions for additional information.

Cash Distributions to Members Related to Their Income Tax Liabilities

As a limited liability company treated as a partnership for income tax purposes, TWFG Holding does not incur significant federal, state or local income taxes, as these taxes are primarily the obligations of its members. Under the TWFG LLC Agreement, TWFG Holding is required to distribute cash, to the extent that TWFG Holding has cash available, on a pro rata basis to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to each member’s share of TWFG Holding’s taxable earnings. TWFG Holding makes such tax distributions to its members quarterly, based on an estimated tax rate and projected year-to-date taxable income, with a final accounting once actual taxable income or loss has been determined. TWFG Holding made tax distributions to its members totaling approximately $ 3.5 million and $ 15.4 million for the three and nine months ended September 30, 2025, respectively. TWFG Holding made tax distributions to its members totaling zero and approximately $ 6.1 million for the three and nine months ended September 30, 2024, respectively. Non-tax distributions in the amounts of $ 6.2 million and $ 1.0 million were made for the nine months ended September 30, 2025 and 2024, respectively. There were no non-tax distributions made in the three months ended September 30, 2025 and 2024, respectively.

8. STOCK-BASED COMPENSATION

2024 Omnibus Incentive Plan

On July 17, 2024, the Company adopted the 2024 Incentive Plan for its directors, officers, employees, consultants and advisors. The 2024 Incentive Plan authorizes the granting of stock options, restricted stock, RSUs, stock appreciation rights, and other stock-based awards. The Company has reserved 4,346,667 shares of Class A Common Stock for issuance under the 2024 Incentive Plan, subject to annual increases pursuant to the terms of the 2024 Incentive Plan. During the nine months ended September 30, 2025, the Company grante d 51,652 RSUs and 38,716 performance stock units (“PSUs”) under the 2024 Incentive Plan, a nd 3,929,169 shares of Class A Common Stock remain available for future grant.

Stock-Based Compensation Expense

Stock-based compensation expense recorded in salaries and employee benefits for the three and nine months ended September 30, 2025 was $ 1 million and $ 3.7 million, respectively. For the three and nine months ended September 30, 2024, stock-based compensation expense recorded in salaries and employee benefits was $ 1 million. There was no equity or equity-based compensation plan maintained by the Company prior to its IPO on July 19, 2024.

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Stock-Based Awards

RSUs

The Company withholds and sells shares of Class A Common Stock associated with net settlements to cover tax withholding obligations upon the vesting of RSUs for certain employees under its 2024 Incentive Plan. During the nine months ended September 30, 2025, 285,192 RSUs vested and the Company withheld 91,640 RSUs for $ 2.8 million, resulting in the net issuance of 193,552 shares of Class A Common Stock. The vesting of RSUs is shown net of this withholding on the Condensed Consolidated Statements of Changes in Redeemable Noncontrolling Interest and Stockholders’/Members’ Equity and Condensed Consolidated Statements of Cash Flows.

Stock-based awards granted in the period include RSUs with service-based vesting conditions. Outstanding RSUs and related activity for the nine months ended September 30, 2025 were as follows:


	Number of Awards	Weighted-Average Grant Date Fair Value
Unvested balance - December 31, 2024	419,935	$	17.00
Granted	51,652	30.91
Vested	( 285,192 )	17.00
Forfeited	( 1,184 )	17.00
Unvested balance - September 30, 2025	185,211	$	20.88

PSUs

The Company has granted performance and service based awards to certain key employees, in the form of PSUs, which are earned based on the achievement of certain performance targets and continuous service. The PSUs are subject to a two-year measurement period during which the number of Class A Common Stock to be issued in settlement of the PSUs remains uncertain until the end of the measurement period and will cliff vest based on the level of achievement with respect to the applicable performance criteria. The PSUs are divided into two tranches: 50 % EBIT DA PSUs and 50 % Revenue PSUs. The EBITDA PSUs performance vest based on the achievement of certain cumulative EBITDA targets over the performance period. The Revenue PSUs performance vest based on the achievement of certain cumulative organic revenue targets over the performance period. In addition, the PSUs granted to certain employees are contingent generally upon the employee’s continuous service with the Company through the third anniversary of the grant date. Subsequent to such measurement period, the vesting of PSUs is subject to certification by the compensation committee of the Board.

If the vesting conditions of the PSUs are not met the awards will be forfeited. Outstanding PSUs and related activity for the nine months ended September 30, 2025 were as follows:


	Number of Awards	Weighted-Average Grant Date Fair Value
Unvested balance - December 31, 2024	—	$	—
Granted	38,716	30.90
Vested	—	—
Forfeited	—	—
Unvested balance - September 30, 2025	38,716	$	30.90

Summary of Unamortized Compensation Expense

As of September 30, 2025, the Company estimated there to be $ 4.0 million of unamortized compensation expense related to all non-vested stock-based compensation arrangements granted under the Company’s stock-based compensation plans, based upon current projections of grants measu red against performance criteria. That expense is expected to be recognized over a weighted-average period of 1.6 years.

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9. INCOME TAXES

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Condensed Consolidated Financial Statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

Prior to the Reorganization Transactions, we were organized as Delaware limited liability companies and Delaware limited partnerships and were treated as flow-through entities for U.S. federal income tax purposes. Income tax expense was $ 1.0 million a nd $ 2.3 million for the three and nine months ended September 30, 2025, respectively. The estimated effective tax rate was 9.22 % and 8.13 % for the three and nine months ended September 30, 2025, respectively, which is different from the 21% statutory rate primarily because income tax expense is recognized only on the portion of earnings attributable to the Company in the periods following the consummation of the Reorganization Transactions.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA introduced multiple U.S. federal income tax changes, such as deductibility of domestic research and development expenses, deductibility on certain property additions and limitations on interest expense deduction. The Company has included the impact of these provisions on its consolidated financial statements.

As of September 30, 2025 and December 31, 2024, the Company did not have any material uncertain tax positions.

10. DEFINED CONTRIBUTION PLAN

TWFG Holding sponsors a Safe Harbor defined contribution plan (the “Plan”). The sponsor is part of a controlled group that includes both TWFG Insurance Services LLC and TWFG General Agency LLC (“TWFG-GA”). The Plan allows employees who are age 21 or older and have completed 3 months of service to participate.

Each year, participants may defer between 1 % and 100 % of eligible compensation, not to exceed the maximum dollar amount as allowed under Section 402(g) of the Internal Revenue Code. Effective January 1, 2008, the Plan was amended to allow the Company to meet the provisions of the regulations. The Plan provides a Company matching of 100 % on the first 4 % of eligible compensation that a participant contributes to the Plan.

For the three and nine months ended September 30, 2025, the Company recognized expenses related to the Plan of $ 0.2 million and $ 0.5 million, respectively. For the three and nine months ended September 30, 2024, the Company recognized expenses related to the Plan of $ 0.2 million and $ 0.4 million, respectively. The Company at its election may make discretionary profit share contributions. Contributions are subject to certain limitations. For the three and nine months ended September 30, 2025 and 2024, the Company elected not to make any additional discretionary contributions.

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11. RELATED PARTY TRANSACTIONS

The Company earned $ 3.9 million and $ 9.9 million in commissions, respectively, and $ 0.9 million and $ 2.6 million in fee income, respectively, from The Woodlands Insurance Company (“TWICO”), a related party, during the three and nine months ended September 30, 2025. For the three and nine months ended September 30, 2024, the Company earned $ 3.0 million and $ 6.0 million in commissions, respectively, and $ 0.9 million and $ 1.8 million in fee income, respectively, from TWICO. These amounts are included in commission income and fee income in the Condensed Consolidated Statements of Income.

On September 1, 2025, TWICO and TWFG-GA amended their managing general agency and claims administration agreement, which reflects an increase in the percentage of commissions paid to TWFG-GA from 20 % to 25 %, a profit sharing arrangement, and requires TWICO to reimburse TWFG-GA for actual expenses incurred or allocated by TWFG-GA for licensing, statistical accounting and management services performed by TWFG-GA. The transaction was approved by the Audit Committee pursuant to the Company’s Related Party Transaction Approval Policy and approved by the Texas Department of Insurance.

The Company incurred $ 0.8 million and $ 2.3 million in net license fees during the three and nine months ended September 30, 2025, respectively, under its software licensing agreement with Evolution Agency Management LLC, a related party. For the three and nine months ended September 30, 2024, the Company incurred license fees of $ 0.5 million and $ 1.4 million, respectively. These amounts are included in other administrative expenses in the Condensed Consolidated Statements of Income.

The Company purchased the assets of Ralph E. Wade Insurance Agency Inc. in April 2023 for a total consideration of $ 4.3 million, of which $ 3.0 million was paid in cash, and the remaining balance of $ 1.3 million, was settled through the issuance of an interest-bearing note, payable monthly, over three years beginning in April 2024. The portion of the balance due within 12 months or less from the financial statement date is reported in the Condensed Consolidated Balance Shee ts as deferred acquisition payable, current, while the amount due after 12 months from the financial statement date is included in deferred acquisition payable, non-current.

In December 2024, the Company commenced a 10 -year lease for additional office space with Parkwood 2, LLC, a related party owne d by the Co ntinuing Pre-IPO LLC Members.

There were no other material changes in related party transactions from those disclosed in the Company’s Annual Report.

12. EARNINGS PER SHARE

For the three and nine months ended September 30, 2025, basic earnings per share has been calculated by dividing net earnings attributable to Class A common stockholder s by the weighted average number of shares of Class A Common Stock outstanding for the same period. All earnings prior to July 19, 2024, the date of the Reorganization Transactions, were entirely allocable to the noncontrolling interests and, as a result, earnings per share information is not applicable for reporting periods prior to that date. Shares of Class A Common Stock are weighted for the portion of the period in which the shares were outstanding. Diluted earnings per share has been calculated in a manner consistent with that of basic earnings per share while considering all potentially dilutive shares of Class A Common Stock outstanding during the periods.

Prior to the IPO and Reorganization Transactions, TWFG Holding’s equity structure included common units. The Company considered the calculation of earnings per unit for periods prior to the IPO and determined that such presentation would not provide meaningful information to the users of these Condensed Consolidated Financial Statements. Therefore, earnings per share information for the three and nine months ended September 30, 2024 has been calculated solely for the post-IPO period. The following tables set forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2025 and 2024 (in thousands, except share and per share amounts):

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Numerator:
Net income attributable to TWFG, Inc. (basic)	$	1,722	$	1,154	$	5,017	$	1,154
Plus: Income attributed to dilutive shares	9		—		41		—

Net income attributable to common stockholders (diluted)	$	1,731	$	1,154	$	5,058	$	1,154

Denominator:
Weighted average common stock outstanding (basic)	15,005,426		14,722,685		14,933,242		14,722,685
Effect of potentially dilutive securities:
RSUs	92,706		167,697		152,499		167,697
PSUs	2,523		—		2,290		—
Class B Voting Stock	—		—		—		—
Class C Voting Stock	—		—		—		—
Weighted average common stock outstanding (diluted)	15,100,655		14,890,382		15,088,031		14,890,382

Earnings per share
Basic	$	0.11	$	0.08	$	0.34	$	0.08
Diluted	$	0.11	$	0.08	$	0.34	$	0.08

Diluted earnings per share attributable to common stockholders adjusts the basic earnings per share attributable to common stockholders and the weighted average number of shares of common stock outstanding for the potential dilutive impact of potential common stock. Pursuant to the Reorganization Transactions, Class B Voting Stock and Class C Voting Stock are considered in the calculation of dilutive earnings per share on an if-converted basis as these classes of stock, together with the related LLC Units, have exchange rights into Class A Common Stock that could result in additional Class A Common Stock being issued. Net income attributable to the noncontrolling interests would be added back to net income in the fully dilutive computation and adjusted for income taxes which would have been expensed had the income been recognized by the Company, a taxable entity. All other potentially dilutive securities (such as unvested RSUs and PSUs) are determined based on the treasury stock method.

The Company excluded the following potential shares, presented based on amounts outstanding at each period end, from the computation of diluted weighted average shares outstanding for the periods indicated because including them would have had an antidilutive effect:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2025	2024	2025	2024


Class B Voting Stock	7,277,651	7,277,651	7,277,651	7,277,651
Class C Voting Stock	33,893,810	33,893,810	33,893,810	33,893,810
	41,171,461	41,171,461	41,171,461	41,171,461

13. LITIGATION AND CONTINGENCIES

The Company may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business. Although the results and claims are inherently unpredictable and uncertain, the Company is not presently a party to any litigation the outcome of which, the Company believes, if determined adversely to it, would individually or taken together have a material adverse effect on the Company’s business, operating results, cash flows or financial condition.

The Company records liabilities for loss contingencies when it is probable that a liability has been incurred and the amount is reasonably estimable. The Company does not discount such contingent liabilities and recognizes incremental costs related to the contingencies when incurred.

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14. SEGMENT

The Company has one operating segment and therefore one reportable segment relating to its business as an independent distribution platform for personal and commercial insurance in the United States. All business activities and operations are reported in the one reportable segment, which applies accounting policies consistent with the consolidated entity. The Company’s Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, manages the Company’s operations on a consolidated basis as one operating segment for the purpose of evaluating financial performance and allocating resources. See Note 3 Revenue for products and major customers on an entity wide basis.

The segment derives its revenues primarily from the placement of insurance contracts between insurance carriers and insureds. The CODM assesses the financial performance of the segment and decides how to allocate resources based on net income on a consolidated basis. The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as total consolidated assets. See Note 4 Intangible Assets and Acquisitions for capital expenditures on an entity wide basis.

The CODM uses net income predominantly in the annual operating budget and in the strategic planning and forecasting process. Such profit measure is used to monitor budget versus actual results on an ongoing basis by the CODM and determine how resources are allocated to the various activities of the Company. The CODM also uses net income to evaluate the Company’s performance and assist in determination of management’s incentive compensation.

The following table provides a summary of the segment revenue, segment profit or loss, and significant segment expenses (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Total revenues	$	64,123	$	52,863	$	178,254	$	152,017
Less:
Commission expense	34,639		30,766		100,604		89,171
Salaries and employee benefits	9,929		8,331		27,618		21,401
Technology expense	1,532		1,043		4,410		3,191
Consultant and other professional fees	804		971		2,549		2,022
Depreciation and amortization	5,327		2,985		12,587		8,966
Other segment items (1)	2,858		2,799		8,359		6,474
Interest expense	70		411		221		2,125
Interest income	( 1,574 )		( 1,777 )		( 5,188 )		( 2,202 )
Income tax expense	977		437		2,253		437
Other non-operating (income) expense, net	( 59 )		4		( 632 )		( 8 )
Segment and consolidated net income	$	9,620	$	6,893	$	25,473	$	20,440

(1) Other segment items included in segment net income include marketing expenses, survey expenses, office expenses, and certain administrative expenses.

15. SUBSEQUENT EVENTS

Subsequent to the quarter ended September 30, 2025, the Company completed acquisitions in support of its ongoing growth strategy.

The Company has evaluated subsequent events through November 12, 2025, the issuance date and determined that no events have occurred that require disclosure other than the events listed above.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Quarterly Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed below and in the Annual Report, particularly in the section Part I, Item 1A. Risk Factors and in “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report.

The following discussion contains commentary on the financial results derived from the unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2025 and September 30, 2024 of TWFG, Inc.

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. Our offerings are fulsome and flexible in that we offer all lines of insurance, multiple distribution contract options, M&A services, proprietary virtual assistants, proprietary technology, proprietary premium financing, unlimited continuing education, recognition programs, co-op funding, marketing support and overall lower costs to operate. Since our founding in 2001 by our Chief Executive Officer, Richard F. (“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. 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 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.

Certain income statement line items

Revenues

Commission income. 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. Commission rates vary across insurance carriers, states and lines of business and typically rang e from 7% to 30%. On a consolidated basis, our average commission rate for 2024 was approximately 12%.

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. We are required to try to resell the insurance contract to our Client at the expiration of each policy term or shop for alternatives if our Client decides to terminate its existing insurance contract. We recognize commission income when the performance obligation of placing the insurance contract between our Client and the insurance carrier has been met and the insurance contract is in effect, based on its effective date.

Our agency agreements with the insurance carriers are non-exclusive and can typically be terminated unilaterally by either party. 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.

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Fee income. Fee income is comprised primarily of policy fees, branch fees, license fees and third-party administrator (“TPA”) fees. The Company receives policy fees as compensation for administrative services performed in connection with the placement and issuance of certain policies that are in addition to and separate from commissions paid by the insurance carriers. Branch fees include the monthly recurring fees assessed for the ongoing Client service and back-office support provided to independent branches operating exclusively through the Company pursuant to an exclusive Branch agreement and a one-time branch onboarding fee. License fees are usage-based fees assessed by the Company for the use of its proprietary applications. 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.

The following table sets forth our revenues by amount and as a percentage of our revenues for the periods indicated (dollar amounts in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Commission income	$	58,270	91	%	$	48,240	91	%	$	161,617	90	%	$	139,447	92	%
Contingent income	2,095		3		1,383		3		5,791		3		3,717		2
Fee income	3,466		5		2,890		5		9,806		6		7,811		5
Other income	292		1		350		1		1,040		1		1,042		1
Total revenues	$	64,123	100	%	$	52,863	100	%	$	178,254	100	%	$	152,017	100	%

Commission expense. Commission expense is our largest expense, representing the consideration paid to our agents for producing and retaining business. We expect our commission expense to continue to increase corresponding with our expected business growth.

Salaries and employee benefits. Salaries and employee benefits consist of base compensation and any bonuses, equity compensation and benefits paid and payable to employees. We operate in competitive markets and expect to continue to experience a general rise in compensation and benefits expense commensurate with expected growth in headcount, geographic expansion and the creation of new products and services.

Other administrative expenses. 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. As we continue to pursue strategic asset acquisitions, we expect our amortization expenses to increase.

Interes t 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.

Other non-operating income (expense), net. Other non-operating income (expense), net consists of gains and losses on the sale of assets.

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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 unaudited Condensed Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The following table summarizes our results of operations for the periods presented (in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Revenues
Commission income	$	58,270	91	%	$	48,240	91	%	$	161,617	90	%	$	139,447	92	%
Contingent income	2,095		3		1,383		3		5,791		3		3,717		2
Fee income	3,466		5		2,890		5		9,806		6		7,811		5
Other income	292		1		350		1		1,040		1		1,042		1
Total revenues	64,123		100	%	52,863		100	%	178,254		100	%	152,017		100	%
Expenses
Commission expense	34,639		63	%	30,766		66	%	100,604		64	%	89,171		68	%
Salaries and employee benefits	9,929		18		8,331		18		27,618		18		21,401		16
Other administrative expenses	5,194		9		4,813		10		15,318		10		11,687		9
Depreciation and amortization	5,327		10		2,985		6		12,587		8		8,966		7
Total operating expenses	55,089		100	%	46,895		100	%	156,127		100	%	131,225		100	%
Operating income	9,034				5,968				22,127				20,792

Interest expense	70				411				221				2,125
Interest income	1,574				1,777				5,188				2,202
Other non-operating income (expense), net	59				(4)				632				8
Income before tax	10,597				7,330				27,726				20,877
Income tax expense	977				437				2,253				437


Net income	$	9,620			$	6,893			$	25,473			$	20,440

Comparison of the Three Months Ended September 30, 2025 and 2024

Total revenues

The following table presents the disaggregation of our revenues by offerings (in thousands):


	Three Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Insurance Services
Agency-in-a-Box	$	37,583	58	%	$	33,826	64	%
Corporate Branches	12,188		19		9,248		17
Total Insurance Services	49,771		77		43,074		81
TWFG MGA	13,944		22		9,432		18
Other	408		1		357		1
Total revenues	$	64,123	100	%	$	52,863	100	%

Total revenues for the three months ended September 30, 2025 increased by $11.3 million, or 21.3% , compared to the same period in the prior year. The increase was primarily due to a $10.0 million, or 20.8%, increase in commission income driven primarily by continued organic business growth and the impact of acquisitions in 2025. Als o contributing to the increase in total revenues were the $0.7 million, or 51.5%, increase in contingent income and $0.6 million, or 19.9%, increase in fee income, compared to the same period in the prior year. See discussions below for additional information about the changes in our revenues.

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Commission income

The following table presents the disaggregation of our commission income by offerings (in thousands):


	Three Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Insurance Services
Agency-in-a-Box	$	34,703	59	%	$	31,542	65	%
Corporate Branches	12,018		21		9,301		19
Total Insurance Services	46,721		80		40,843		84
TWFG MGA	11,549		20		7,397		16
Total commission income	$	58,270	100	%	$	48,240	100	%

Total comm ission income for the three months ended September 30, 2025 increased by $10.0 million, or 20.8%, co mpared to the same period i n the prior year due to continued organic business growth and the impact of acquisitions made in 2025.

Commission income for total Insurance Services grew by $5.9 million, or 14.4%, for the three months ended September 30, 2025 compared to the same period in t he prior year. Insurance Services A gency-in-a-Box commission income for the three months ended September 30, 2025 increased b y $3.2 million, or 10.0%, c ompared to the same period in the prior year. This increase was driven by higher written premium volume through organic growth and mix in line of business over the period. Insurance Services Corporate Branches commission income for the three months ended September 30, 2025 increased by $2.7 million, or 29.2%, compared to the same period in the prior year. The increase was primarily driven by the acquisitions completed in 2025 and organic growth.

TWFG MGA commission income for the three months ended September 30, 2025 increased by $4.2 million, or 56.1%, compared to the same period in the prior year. The increase in TWFG MGA was primarily driven by the acquisition of TWFG MGA FL, LLC completed in 2025.

Contingent income

Contingent income for th e three months ended September 30, 2025 was $2.1 million, reflecting a $0.7 million, or 51.5%, increase compared to the same period in the prior year. The increase in contingent income was primarily due to underlying growth in our business. Contingent income is unpredictable and dependent upon the target financial and performance metrics established by the insurance carriers.

Fee income

The following table presents the disaggregation of our fee income by major sources (in thousands):


	Three Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Policy fees	$	1,175	34	%	$	1,064	37	%
Branch fees	1,289		37		1,172		40
License fees	886		26		495		17
TPA fees	116		3		159		6
Total fee income	$	3,466	100	%	$	2,890	100	%

Fee income for the three months ended September 30, 2025 increased by $0.6 million, or 19.9% , 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 three months ended September 30, 2025 increased by $0.1 million, or 10.4% , compared to the same period in the prior year. The increase in policy fees was primarily due to higher policy count driven by new business growth.

• Branch fees for the three months ended September 30, 2025 increased b y $0.1 million, or 10.0%, compared to the same period in the prior year. The increase in branch fees was primarily driven by increased agent growth.

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• License fees for the three months ended September 30, 2025 increased by $0.4 million, or 79.0%, compared to the same period in the prior year. The increase was primarily driven by a one-time technology infrastructure project completed during the quarter to support an affiliated entity’s expansion into a new market. This item is non-recurring and not expected to have a continuing impact on future operating results.

Other income

Other income for the three months ended September 30, 2025 was $0.3 million compared to $0.4 million in the same period in the prior year. The account balance was primarily comprised of interest earned on fiduciary funds and interest earned on the $10.0 million other investment held by a third party to facilitate premium financing arrangements.

Commission expense

The following table presents the disaggregation of our commission expense by offerings (in thousands):


	Three Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Insurance Services
Agency-in-a-Box	$	27,627	80	%	$	25,092	82	%
Corporate Branches	1,481		4		1,304		4
Total Insurance Services	29,108		84		26,396		86
TWFG MGA	5,504		16		4,346		14
Other	27		—		24		—
Total commission expense	$	34,639	100	%	$	30,766	100	%

Total commission expense for the three months ended September 30, 2025 increased by $3.9 million, or 12.6%, c ompared to the same period in the prior year. The increase was primarily due to the increased business growth and overall shift in business mix. See commission income discussion above for additional information regarding the driver of changes.

Commission expense for total Insurance Services grew by $2.7 million, or 10.3% , for the three months ended September 30, 2025 compared to the same period in t he prior year. Insurance Services Agency-in-a-Box commission expense for the three months ended September 30, 2025 increased by $2.5 million, or 10.1% , compared to the same period in the prior year. The increase was primarily driven by the increase in our business. Th e expenses of our Branches are primarily commission expense, which is determined as a percentage of the written premium. The profitability of our Branches, as determined by the difference between commission income and commission expense, is consistent.

Insurance Services Corporate Branches commission expense for the three months ended September 30, 2025 increased by $0.2 million, or 13.6%, compared to the same period in the prior year. The increase in commission expense was driven by both organic business growth and acquisition of Corporate Branches in the current period. The expenses of our Corporate Branches are primarily salaries and benefits, and are primarily fixed expenses, which are not directly related to commission income or written premium.

TWFG MGA commission expense for the three months ended September 30, 2025 increased by $1.2 million, or 26.6%, compared to the same period in the prior year. The increase is primarily driven by the acquisition of TWFG MGA FL, LLC and overall growth.

Salaries and employee benefits

Salaries and employee benefits for the three months ended September 30, 2025 was $9.9 million compared to $8.3 million in the same period in the prior year, reflecting a 19.2% total increase consisting of $1.0 million in stock-based compensation and $8.9 million in salaries and employee benefit expenses driven by 2025 Corporate Branch acquisitions.

Other administrative expenses

Other administrative expenses for the three months ended September 30, 2025 was $5.2 million compared to $4.8 million in the same period in the prior year, reflecting an increase of $0.4 million, or 7.9%. The increase was primarily due to higher expens es for information technology due to business growth.

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Depreciation and amortization

Depreciation and amortization for th e three months ended September 30, 2025 was $5.3 million compared to $3.0 million in the same period in the prior year, reflecting an increase of $2.3 million , o r 78.5%. The increase was primarily due to the amortization of intangible assets from our recent asset acquisitions.

Interest expense

Interest expense for the three months ended September 30, 2025 was $0.1 million compared to $0.4 million for the same period in the prior year, reflecting a decrease of $0.3 million, or 83.0%, due to the repayment of the Revolving Facility (defined below) during August of 2024.

Interest income

Interest income for the three months ended September 30, 2025 was $1.6 million, compared to $1.8 million in the same period in the prior year, reflecting a decrease of $0.2 million. The decrease was attributable to the decline in cash balances which averaged $161.2 million over the three months ended September 30, 2025 compared to $191.2 million on hand as of September 30, 2024 .

Income tax expense

Income tax expense for the three months ended September 30, 2025 w as $1.0 million compare d to $0.4 million for 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.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Total revenues

The following table presents the disaggregation of our revenues by offerings (in thousands):


	Nine Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Insurance Services
Agency-in-a-Box	$	112,895	63	%	$	99,976	66	%
Corporate Branches	31,804		18		25,875		17
Total Insurance Services	144,699		81		125,851		83
TWFG MGA	32,372		18		25,057		16
Other	1,183		1		1,109		1
Total revenues	$	178,254	100	%	$	152,017	100	%

Total revenues for the nine months ended September 30, 2025 increased by $26.2 million, or 17.3% , compared to the same period in the prior year. The increase was primarily due to a $22.2 million, or 15.9%, increase in commission income driven primarily by continued organic business growth and acquisitions made in 2025. Also contributing to the increase in total revenues were the $2.0 million, or 25.5%, increase in fee income, and $2.1 million, or 55.8%, increase in contingent income with other income remaining consistent compared to the same period in the prior year. See discussions below for additional information about the changes in our revenues.

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Commission income

The following table presents the disaggregation of our commission income by offerings (in thousands):


	Nine Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Insurance Services
Agency-in-a-Box	$	104,337	64	%	$	93,702	67	%
Corporate Branches	31,526		20		25,962		19
Total Insurance Services	135,863		84		119,664		86
TWFG MGA	25,754		16		19,783		14
Total commission income	$	161,617	100	%	$	139,447	100	%

Commission income for the nine months ended September 30, 2025 increased by $22.2 million, or 15.9%, compared to the same period in the prior year due to continued organic business growth and acquisitions in 2025.

Commission income for Insurance Servic es grew by $16.2 million, or 13.5% , for the nine months ended September 30, 2025 compared to the same period in the prior ye ar. Insurance Services Agency-in-a-Box commission income for the nine months ended September 30, 2025 increased by $10.6 million, or 11.3%, compared to the same period in the prior year. This increase was driven by higher written premium volume and mix in line of business over the period. Insurance Services Corporate Branches commission income for the nine months ended September 30, 2025 increased by $5.6 million, or 21.4%, compared to the same period in the prior year. The increase was primarily driven by the acquisitions completed in 2025 and continued organic growth of our Corporate Branches.

TWFG MGA commission income for the nine months ended September 30, 2025 increased by $6.0 million, or 30.2%, compared to the same period in the prior year. The increase in commission income was primarily driven by the commission rate increase of The Woodlands Insurance Company compared to the same period in the prior year and the acquisition of TWFG MGA FL, LLC.

Contingent income

Contingent income for th e nine months ended September 30, 2025 was $5.8 million, reflecting a $2.1 million, or 55.8%, increase compared to the same period in the prior year. The increase in contingent income was primarily due to underlying growth in our business. Contingent income is unpredictable and dependent upon the target financial and performance metrics established by the insurance carriers.

Fee income

The following table presents the disaggregation of our fee income by major sources (in thousands):


	Nine Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Policy fees	$	3,309	34	%	$	2,510	32	%
Branch fees	3,961		40		3,523		45
License fees	2,053		21		1,454		19
TPA fees	483		5		324		4
Total fee income	$	9,806	100	%	$	7,811	100	%

Fee income for the nine months ended September 30, 2025 increased by $2.0 million, or 25.5% , 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 nine months ended September 30, 2025 increased by $0.8 million, or 31.8% , compared to the same period in the prior year. The increase in policy fees was primarily due to higher policy count driven by new business growth.

• Branch fees for the nine months ended September 30, 2025 increased b y $0.4 million, or 12.4% , compared to the same period in the prior year. The increase in branch fees was primarily driven by increased agent growth.

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• License fees for the nine months ended September 30, 2025 increased by $0.6 million, or 41.2% , compared to the same period in the prior year. The increase was primarily driven by a one-time technology infrastructure project completed during the quarter to support an affiliated entity’s expansion into a new market. This item is non-recurring and not expected to have a continuing impact on future operating results.

• TPA fees fo r the nine months ended September 30, 2025 increased by $0.2 million, or 49.1%, compared to the same period in the prior year. The increase in TPA fees were due to the increased volume in claims processed.

Other income

Other income for the nine months ended September 30, 2025 was comparable to the same period in the prior year.

Commission expense

The following table presents the disaggregation of our commission expense by offerings (in thousands):


	Nine Months Ended September 30,
	2025				2024
	Amount		% of Total		Amount		% of Total
Insurance Services
Agency-in-a-Box	$	81,594	81	%	$	72,649	81	%
Corporate Branches	4,155		4		3,422		4
Total Insurance Services	85,749		85		76,071		85
TWFG MGA	14,774		15		13,039		15
Other	81		—		61		—
Total commission expense	$	100,604	100	%	$	89,171	100	%

Commission expense for the nine months ended September 30, 2025 increased by $11.4 million, or 12.8% , c ompared to the s ame period in the prior year. The increase was primarily due to the increased growth in business of $10.0 million consistent with commission income and the absence of the one-time favorable adjustment of $1.5 million related to the branch conversion that occurred in 2024. See commission income discussion above for additional information regarding the driver of changes.

Commission expense for total Insurance Services grew by $9.7 million, or 12.7% , for the nine months ended September 30, 2025 compared to the same period in t he prior year. Insurance Services Agency-in-a-Box commission expense for the nine months ended September 30, 2025 increased by $8.9 million, or 12.3%, compared to the same period in the prior year. The increase was primarily due to the increase in business of $7.5 million consistent with commission income and the absence of the one-time favorable adjustment of $1.5 million in 2024. The expenses of our Branches are primarily commission expense, which is determined as a percentage of commission income. The profitability of our Branches, as determined by the difference between commission income and commission expe n se, is consistent.

Insurance Services Corporate Branches commission expense for the nine months ended September 30, 2025 increased by $0.7 million, or 21.4% , compared to the same period in the prior year. The increase in commission expense was driven by both organic business growth and acquisition of Corporate Branches in the current period. The expenses of our Corporate Branches are primarily salaries and benefits, and are primarily fixed expenses, which are not directly related to commission income or written premium.

TWFG MGA commission expense for the nine months ended September 30, 2025 increased by $1.7 million, or 13.3% , compared to the same period in the prior year. The increase was primarily driven by the acquisition of TWFG MGA FL, LLC, geographical expansion and commission expense rate increase of The Woodlands Insurance Company.

Salaries and employee benefits

Salaries and employee benefits for the nine months ended September 30, 2025 was $27.6 million compared to $21.4 million in the same period in the prior year, reflecting a 29.1% total increase, consisting of $2.7 million in stock-based compensation and $3.5 million in salaries and employee benefits expenses primarily driven by Corporate Branch acquisitions in 2025.

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Other administrative expenses

Other administrative expenses for the nine months ended September 30, 2025 was $15.3 million compared to $11.7 million in the same period in the prior year, reflecting an increase of $3.6 million, or 31.1%. The increase was primarily due to higher expenses of $1.2 million of information technology, $0.5 million of professional fees, $0.6 million of rent expense, $0.3 million of insurance expense, and $1.0 million of other administrative expenses, all due primarily to business growth and increased costs as a public company.

Depreciation and amortization

Depreciation and amortization for th e nine months ended September 30, 2025 was $12.6 million compared to $9.0 million in the same period in the prior year, reflecting an increase of $3.6 million , o r 40.4%. The increase was primarily due to the amortization of intangible assets from our recent asset acquisitions.

Interest expense

Interest expense for the nine months ended September 30, 2025 was $0.2 million compared to $2.1 million for the same period in the prior year, reflecting a decrease of $1.9 million, or 89.6% due to the repayment of the Revolving Facility during August of 2024.

Interest income

Interest income for the nine months ended September 30, 2025 was $5.2 million, compared to $2.2 million in the same period in the prior year, reflecting an increase of $3.0 million. The increase was attributable to interest income earned on proceeds from the IPO and operating cash funds of $173.4 million.

Income tax expense

Income tax expense for the nine months ended September 30, 2025 was $2.3 million compare d to $0.4 million for 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.

Other non-operating income (expense), net

Other non-operating income (expense), net for the nine months ended September 30, 2025 increased by $0.6 million compared to the same period in the prior year. The increase was primarily attributable to the selling of books of business .

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Key Performance Indicators

Total Written Premium

Total Written Premium represents, for any reported period, the total amount of current premium (net of cancellation) placed with insurance carriers. We utilize Total Written Premium as a key performance indicator when planning, monitoring and evaluating our performance. We believe Total Written Premium is a useful metric because it is the underlying driver of the majority of our revenue.

The following table presents the disaggregation of Total Written Premium by offerings and business mix and line of business (in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Offerings:
Insurance Services
Agency-in-a-Box	$	296,524	63	%	$	261,560	65	%	$	839,845	65	%	$	736,699	66	%
Corporate Branches	98,634		21		77,636		20		262,284		20		213,689		19
Total Insurance Services	395,158		84		339,196		85		1,102,129		85		950,388		85
TWFG MGA	72,583		16		60,903		15		186,862		15		164,612		15
Total written premium	$	467,741	100	%	$	400,099	100	%	$	1,288,991	100	%	$	1,115,000	100	%

Business Mix:
Insurance Services
Renewal business	$	313,448	67	%	$	265,026	66	%	$	860,223	67	%	$	739,624	66	%
New business	81,710		17		74,170		19		241,906		19		210,764		19
Total Insurance Services	395,158		84		339,196		85		1,102,129		86		950,388		85

TWFG MGA
Renewal business	48,687		10		46,075		11		132,429		10		125,364		11
New business	23,896		6		14,828		4		54,433		4		39,248		4
Total TWFG MGA	72,583		16		60,903		15		186,862		14		164,612		15
Total written premium	$	467,741	100	%	$	400,099	100	%	$	1,288,991	100	%	$	1,115,000	100	%

Written Premium Retention:
Insurance Services			92	%			89	%			91	%			93	%
TWFG MGA			80				83				80				83
Consolidated			91				88				89				91

Line of Business:
Personal lines	$	386,741	83	%	$	327,159	82	%	$	1,050,439	81	%	$	904,372	81	%
Commercial lines	81,000		17		72,940		18		238,552		19		210,628		19
Total written premium	$	467,741	100	%	$	400,099	100	%	$	1,288,991	100	%	$	1,115,000	100	%

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The following table presents the dollar and percent change for Total Written Premium by offerings and business mix (in thousands):


	Three Months Ended September 30,								Nine Months Ended September 30,
	2025				2024				2025				2024
	$ Change		% of Change		$ Change		% of Change		$ Change		% of Change		$ Change		% of Change
Offerings:
Insurance Services
Agency-in-a-Box	$	34,964	13.4	%	$	(22,882)	(8.0)	%	$	103,146	14.0	%	$	(24,561)	(3.2)	%
Corporate Branches	20,998		27.0		63,350		443.4		48,595		22.7		178,533		507.8
TWFG MGA	11,680		19.2		5,542		10.0		22,250		13.5		14,379		9.6
Total written premium	$	67,642	16.9	%	$	46,010	13.0	%	$	173,991	15.6	%	$	168,351	17.8	%

Business Mix:
Insurance Services
Renewal business	$	48,422	18.3	%	$	22,768	9.4	%	$	120,599	16.3	%	$	115,851	18.6	%
New business	$	7,540	10.2	%	$	17,700	31.3	%	$	31,142	14.8	%	$	38,121	22.1	%

TWFG MGA
Renewal business	$	2,612	5.7	%	$	(1,743)	(3.6)	%	$	7,065	5.6	%	$	(2,188)	(1.7)	%
New business	$	9,068	61.2	%	$	7,285	96.6	%	$	15,185	38.7	%	$	16,567	73.0	%

Consolidated Business Mix:
Consolidated renewal business	$	51,034	16.4	%	$	21,025	7.2	%	$	127,664	14.8	%	$	113,663	15.1	%
Consolidated new business	16,608		18.7		24,985		39.0		46,327		18.5		54,688		28.0
Total written premium	$	67,642	16.9	%	$	46,010	13.0	%	$	173,991	15.6	%	$	168,351	17.8	%

Comparison of the Three Months Ended September 30, 2025 and 2024

Total Written Premium for the three months ended September 30, 2025 increased by $67.6 million, or 16.9%, compared to the same period in the prior year. This increase was a result of growth in renewal and new business of $51.0 million, or 16.4%, and $16.6 million, or 18.7%, respectively. Within our Insurance Services offering, there was a shift in renewal and new business growth as compared to the same period in the prior year. Renewal business had a spike in growth of $48.4 million, or 18.3%, compared to growth of $22.8 million, or 9.4%, in the same period in the prior year. However, new business grew at lesser degree of growth of $7.5 million, or 10.2%, as compared to growth of $17.7 million, or 31.3%, in the same period of the prior year. The higher new business growth in the third quarter of 2024 included an influx from the 2023 corporate store acquisitions, which were acquired starting in the second quarter of 2023. Within our MGA offering, we saw an uptick in new business growth of $9.1 million, or 61.2%, due primarily to the TWFG MGA FL, LLC acquisition in June 2025. Renewal business grew $2.6 million, or 5.7%, compared to the same period of the prior year.

For the three months ended September 30, 2025 and 2024, our consolidated written premium retention was 91% and 88%, respectively. The increase in retention is correlated to the shift in renewal business growth of $51.0 million, or 16.4%, compared to growth of $21.0 million, or 7.2%, in the same period of the prior year. The prior year quarter had an uptick of new business growth of $25.0 million, or 39.0%, as a result of carriers moderating rate increases and opening up for new business after a period of restricted capacity, compared to current quarter growth of $16.6 million, or 18.7% . As a result, retention has increased as compared to the same period of the prior year.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Total Written Premium for the nine months ended September 30, 2025 increased by $174.0 million, or 15.6%, compared to $168.4 million, or 17.8%, in the same period in the prior year. This decrease in growth year over year was due primarily to the uptick in 2024 growth including new business growth from carriers opening up for business, 2023 corporate store acquisitions flowing into 2024 and the significant increases in our MGA programs which have normalized in 2025. Within our Insurance Services offering, renewal business grew $120.6 million, or 16.3%, as compared to growth of $115.9 million, or 18.6%, in the prior year period. New business grew $31.1 million, or 14.8%, as compared to growth of $38.1 million, or 22.1%, growth in the same period of the prior year. Within our MGA offering, we saw an uptick in new business growth of $15.2 million, or 38.7%, over the prior year due primarily to the TWFG MGA FL, LLC acquisition.

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For the nine months ended September 30, 2025 and 2024, our consolidated written premium retention was 89% and 91%, respectively. The retention rate as of September 30, 2025 has normalized from the effect of increased new business in the prior year. Renewal growth of $127.7 million, or 14.8%, is comparable to the same period of the prior year.

Non-GAAP Financial Measures

Organic Revenue. Since the first quarter of 2025, we have utilized the revised calculation methodology for Organic Revenue to include policy fee income as it is directly correlated to MGA commission income. Our legacy calculation methodology removed policy fee income from Organic Revenue. Organic Revenue is total revenue (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, non-policy fee 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. Organic Revenue Growth is the change in Organic Revenue period-to-period, with prior period results adjusted to include revenues that were excluded in the prior period because the relevant acquired businesses had not reached the twelve-month-owned milestone but have reached the twelve-month owned milestone in the current period. 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.

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
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Total revenues	$	64,123		$	52,863		$	178,254		$	152,017
Acquisition adjustments (1)	(5,286)			(898)			(7,419)			(3,582)
Contingent income	(2,095)			(1,383)			(5,791)			(3,717)
Fee income	(3,466)			(2,890)			(9,806)			(7,811)
Policy fee income	(292)			(350)			(1,040)			(1,042)
Other income	1,175			1,064			3,309			2,510
Organic Revenue	$	54,159		$	48,406		$	157,507		$	138,375

Prior year Organic Revenue reported	$	47,342		$	42,840		$	135,865		$	119,803
Commission income at 12-month post acquisition(s)	898			1,153			3,583			1,856
Prior year policy fees	1,064			580			2,510			1,656
Other adjustment(s) (3)	(136)			—			(807)			—
Organic Revenue denominator	$	49,168		$	44,573		$	141,151		$	123,315

Organic Revenue	$	54,159		$	48,406		$	157,507		$	138,375
Organic Revenue denominator	49,168			44,573			141,151			123,315
Organic Revenue Growth	$	4,991		$	3,833		$	16,356		$	15,060

Total Revenue Growth Rate (2)	21.3		%	11.5		%	17.3		%	14.7		%
Organic Revenue Growth Rate	10.2		%	8.6		%	11.6		%	12.2		%

(1) Represents revenues generated from the acquired businesses during the first 12 months following an acquisition.

(2) Represents the period-to-period change in total revenues divided by the total revenues in the prior period.

(3) Other adjustments reflect immaterial prior-period and comparability items consistent with management’s non-GAAP presentation policy.

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Legacy Calculation Methodology Applied to Current Period
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Total revenues	$	64,123		$	52,863		$	178,254		$	152,017
Acquisition adjustments (1)	(5,286)			(898)			(7,419)			(3,582)
Contingent income	(2,095)			(1,383)			(5,791)			(3,717)
Fee income	(3,466)			(2,890)			(9,806)			(7,811)
Other income	(292)			(350)			(1,040)			(1,042)
Organic Revenue	$	52,984		$	47,342		$	154,198		$	135,865

Prior year Organic Revenue reported	$	47,342		$	42,840		$	135,865		$	119,803
Commission income at 12-month post acquisition(s)	898			1,153			3,583			1,856
Other adjustment(s) (3)	(136)			—			(807)			—
Organic Revenue denominator	$	48,104		$	43,993		$	138,641		$	121,659

Organic Revenue	$	52,984		$	47,342		$	154,198		$	135,865
Organic Revenue denominator	48,104			43,993			138,641			121,659
Organic Revenue Growth	$	4,880		$	3,349		$	15,557		$	14,206

Total Revenue Growth Rate (2)	21.3		%	11.5		%	17.3		%	14.7		%
Organic Revenue Growth Rate	10.1		%	7.6		%	11.2		%	11.7		%

(1) Represents revenues generated from the acquired businesses during the first 12 months following an acquisition.

(2) Represents the period-to-period change in total revenues divided by the total revenues in the prior period.

(3) Other adjustments reflect immaterial prior-period and comparability items consistent with management’s non-GAAP presentation policy.

Comparison of the Three Months Ended September 30, 2025 and 2024

Revenue growth rate, representing the year-over-year change in total revenues, was 21.3% for the three months ended September 30, 2025 compared to the same period in 2024 and 11.5% for the three months ended September 30, 2024 compared to the same period in 2023. Revenue growth for the periods reflected the growth in our Books of Business and the mix of the new and renewal businesses. Re venue growth for the three months ended September 30, 2025 compared to the same period in 2024 included the continued growth of commission and fee income during the period. See “Consolidated Results of Operations” for additional discussions regarding the changes in our revenues.

Organic Revenue Growth Rate was 10.2% f or the three months ended September 30, 2025 compared to the same period in 2024 and 8.6% for the three months ended September 30, 2024 compared to the same period in 2023. Organic Revenue Growth for both periods reflects ongoing, but normalizing rate increases being implemented by carriers, the underlying growth of our business, and healthy economic growth and an increase in commission income in our MGA offering. S ee “Consolidated Results of Operations—Commission Income” for additional discussions regarding the changes in our commission income.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Revenue growth rate, representing the year-over-year change in total revenues, was 17.3% for the nine months ended September 30, 2025 compared to the same period in 2024 and 14.7% for the nine months ended September 30, 2024 compared to the same period in 2023. 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 nine months ended September 30, 2025 compared to the same period in 2024 included the continued growth of commission and fee income during the period. See “Consolidated Results of Operations” for additional discussions regarding the changes in our revenues.

Organic Revenue Growth Rate was 11.6% for the nine months ended September 30, 2025 compared to the same period in 2024 and 12.2% for the nine months ended September 30, 2024 compared to the same period in 2023. Organic Revenue Growth for both periods reflects ongoing, but normalizing, rate increases being implemented by carriers, the underlying growth of our business, and healthy economic growth and an increase in commission income in our MGA offering. S ee “Consolidated Results of Operations—Commission Income” for additional discussions regarding the changes in our commission income.

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Adjusted Net Income. Since the second quarter of 2024, we have utilized the revised calculation methodology for Adjusted Net Income, which includes amortization expenses among the add-back adjustments to our net income when calculating our Adjusted Net Income. Our legacy calculation methodology reflected the impact of intangible asset amortization as a reduction to our Adjusted Net Income. The revised calculation methodology excludes the effect of the intangible asset amortization when calculating our Adjusted Net Income by reflecting it among the add-back adjustments to our net income. We believe that the revised calculation of Adjusted Net Income is more consistent with the method and presentation used by most of our peers and will allow management to better evaluate our performance relative to our peer companies. In addition, we believe that the revised calculation more effectively represents what our stakeholders consider useful in assessing our performance.

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. We believe Adjusted Net Income is a useful measure because it adjusts for the after-tax impact of significant one -time, non-recurring items and eliminates the impact of any transactions that do not directly affect what management considers to be our ongoing operating performance in the period. These adjustments generally eliminate the effects of certain items that may vary from company-to-company for reasons unrelated to overall operating performance.

We are subject to U.S. federal income taxes, in addition to state, and local taxes, with respect to our allocable share of any net taxable income of TWFG Holding. Pre-IPO, Adjusted Net Income 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.

Adjusted Net Income Margin . Adjusted Net Income Margin is Adjusted Net Income divided by total revenues. We believe that Adjusted Net Income Margin is a useful measurement of operating profitability for the same reasons we find Adjusted Net Income useful and in addition, it also provides a period-to-period comparison of our after-tax operating performance.

A reconciliation of Adjusted Net Income and Adjuste d Net Income 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):



Revised Calculation Methodology Applied to Current Period
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Total revenues	$	64,123		$	52,863		$	178,254		$	152,017
Net income	$	9,620		$	6,893		$	25,473		$	20,440
Income tax expense	977			—			2,253			—
Acquisition-related expenses	3			—			55			—


Equity-based compensation	987			1,012			3,706			1,012
Other non-recurring items (1)	—			—			10			(1,477)
Amortization expense	5,205			2,920			12,176			8,771
Adjusted income before income taxes	16,792			10,825			43,673			28,746
Adjusted income tax expense (2)	(3,833)			(2,482)			(9,968)			(6,591)
Adjusted Net Income	$	12,959		$	8,343		$	33,705		$	22,155
Net Income Margin	15.0		%	13.0		%	14.3		%	13.3		%
Adjusted Net Income Margin	20.2		%	15.8		%	18.9		%	14.6		%

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Legacy Calculation Methodology Applied to Current Period
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Total revenues	$	64,123		$	52,863		$	178,254		$	152,017
Net income	$	9,620		$	6,893		$	25,473		$	20,440
Income tax expense	977			—			2,253			—
Acquisition-related expenses	3			—			55			—


Equity-based compensation	987			1,012			3,706			1,012
Other non-recurring items (1)	—			—			10			(1,477)
Adjusted income before income taxes	11,587			7,905			31,497			19,975
Adjusted income tax expense (2)	(2,645)			(1,813)			(7,189)			(4,580)
Adjusted Net Income	$	8,942		$	6,092		$	24,308		$	15,395
Net Income Margin	15.0		%	12.6		%	14.3		%	13.3		%
Adjusted Net Income Margin	13.9		%	11.2		%	13.6		%	10.0		%

(1) Represents a one-time adjustment reducing commission expense, which resulted from the branch conversions. In January 2024, nine of our Branches converted to Corporate Branches. 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.

(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 Company, LLC. For the three and nine months ended September 30, 2025, the calculation of adjusted income tax expense is based on a federal statutory r at e of 21% and a blended state income tax rate of 1.82% on 100% of our adjusted income before income taxes as if we owned 100% of the TWFG Holding.

Adjusted Diluted Earnings Per Share. 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 Stock and (ii) the vesting of 100% of the unvested equity awards and exchange into shares of Class A Common Stock. This measure does not deduct earnings related to the noncontrolling interests in TWFG Holding for the period of time prior to July 19, 2024 when we did not own 100% of the business. The most directly comparable GAAP financial metric is diluted earnings per share. We believe Adjusted Diluted Earnings Per Share may be useful to an investor in evaluating our operating performance and efficiency because this measure is widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company-to-company depending upon acquisition activity and capital structure. This measure also eliminates the impact of expenses that do not relate to core business performance, among other factors.

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A reconciliation of Adjusted Diluted Earnings Per Share to diluted earnings per share, the most directly comparable GAAP measure, for each of the periods indicated is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Earnings per share of common stock – diluted	$	0.11	$	0.08	$	0.34	$	0.08
Plus: Impact of all LLC Units exchanged for Class A Common Stock (1)	0.06		0.04		0.12		0.29
Plus: Adjustments to Adjusted Net Income (2)	0.06		0.03		0.14		0.03
Adjusted Diluted Earnings Per Share	$	0.23	$	0.15	$	0.60	$	0.40

Weighted average common stock outstanding – diluted	15,100,655		14,890,382		15,088,031		14,890,382
Plus: Impact of all LLC Units exchanged for Class A Common Stock (1)	41,171,461		41,171,461		41,171,461		41,171,461
Adjusted Diluted Earnings Per Share diluted share count	56,272,116		56,061,843		56,259,492		56,061,843

(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. For the three and nine months ended September 30, 2025, this includes $7.9 million of net income on 56,272,116 weighted-average shares of common stock outstanding - diluted and $20.5 million of net income on 56,259,492 weighted-average shares of common stock outstanding - diluted, respectively. For the three and nine months ended September 30, 2024, 41,171,461 weighted average outstanding Class B Common Stock and Class C Common Stock were considered dilutive and included in the 56,061,843 and 56,061,843 weighted-average shares of common stock outstanding - diluted within diluted earnings per share calculation, respectively. See Note 12 Earnings Per Share to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information about the earnings per share.

(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 $9.6 million and Adjusted Net Income of $13.0 million and net income of $25.5 million and Adjusted Net Income of $33.7 million for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2025, Adjusted Diluted Earnings Per Share include adjustments of $3.3 million to Adjusted Net Income on 56,272,116 weighted-average shares of common stock outstanding - diluted and $8.2 million to Adjusted Net Income on 56,259,492 weighted-average shares of common stock outstanding - diluted for the period presented, respectively.

Adjusted EBITDA. 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. W e believe that Adjusted EBITDA is an appropriate measure of operating performance because it adjusts for significant one-time, non-recurring items and eliminates the ongoing accounting effects of certain capital spending and acquisitions, such as depreciation and amortization, that do not directly affect what management considers to be our ongoing operating performance in the period. 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 measures of other companies due to potential inconsistencies in the methods of calculation.

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Adjusted EBITDA Margin . Adjusted EBITDA Margin is Adjusted EBITDA divided by total revenue. 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.

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):




	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Total revenues	$	64,123		$	52,863		$	178,254		$	152,017
Net income	$	9,620		$	6,893		$	25,473		$	20,440
Interest expense	70			411			221			2,125
Interest income	(1,574)			(1,777)			(5,188)			(2,202)
Depreciation and amortization	5,327			2,985			12,587			8,966
Income tax expense	977			437			2,253			437
EBITDA	14,420			8,949			35,346			29,766
Acquisition-related expenses	3			—			55			—

Equity-based compensation	987			1,012			3,706			1,012
Interest income	1,574			1,777			5,188			2,202


Other non-recurring items (1)	—			—			10			(1,477)

Adjusted EBITDA	$	16,984		$	11,738		$	44,305		$	31,503
Net Income Margin	15.0		%	13.0		%	14.3		%	13.4		%
Adjusted EBITDA Margin	26.5		%	22.2		%	24.9		%	20.7		%

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 and equipment, and acquisition-related costs. We believe Adjusted Free Cash Flow is a useful measure of operating performance because it represents the cash flow from the business that is within our discretion to direct to activities including investments, debt repayment, and returning capital to stockholders.

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):




	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cash Flow from Operating Activities	$	14,953	$	11,725	$	40,213	$	28,879
Purchase of property and equipment	(69)		(233)		(128)		(280)
Tax distribution to members (1)	(2,586)		—		(11,338)		(6,104)
Acquisition-related expenses	3		—		55		—

Adjusted Free Cash Flow	$	12,301	$	11,492	$	28,802	$	22,495

(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.

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. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these non-GAAP financial measures in isolation or as substitutes for revenues, net income, operating cash flow or other consolidated financial statement data prepared in accordance with GAAP. Other companies may calculate any or all of these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.

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Liquidity and capital resources

As of September 30, 2025, the Company had $151.0 million in cash and cash equivalents and $11.6 million in restricted cash, compared to $195.8 million and $9.6 million, respectively, as of December 31, 2024. The decrease in cash and cash equivalents for the nine months ended September 30, 2025 was primarily attributable to $54.2 million of cash paid for acquisitions, $15.9 million in member distributions, and $2.8 million in tax withholding on equity vesting, partially offset by positive cash flows from operations of $40.2 million.

The Company maintains access to the $50.0 million Revolving Facility, of which zero was outstanding at September 30, 2025. We were in compliance with all financial covenants under our debt agreements as of the end of the period. Management believes existing liquidity sources, together with cash generated from operations, will be sufficient to meet working capital, capital expenditure, and acquisition-related needs for at least the next 12 months.

Historical liquidity and capital resources

We have managed our historical liquidity and capital requirements primarily through cash generated from our operations. Prior to the IPO, our primary cash flow activities involved: (1) generating cash flow from our operations; (2) making strategic acquisitions; (3) making distributions to Bunch Family Holdings, LLC, RenaissanceRe Ventures U.S. LLC and GHC Woodlands Holdings LLC; and (4) making borrowings, interest payments, and repayments under our Credit Agreements (as defined below). On July 19, 2024, we completed the IPO of 11,000,000 shares of Class A Common Stock at an IPO price of $17.00 per share. On July 23, 2024, the underwriters purchased an additional 1,650,000 shares of Class A Common Stock in connection with the underwriters’ full exercise of their option to purchase additional shares. We received approximately $192.9 million of net proceeds from the IPO, including from the full exercise of the underwriters’ option, after deducting underwriting discounts and commissions and related offering expenses. As of September 30, 2025 and December 31, 2024, our cash and cash equivalents were $151.0 million and $195.8 million, respectively. 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. On July 30, 2019, TWFG Holding entered into a third amendment to the Term Loan Credit Agreement pursuant to which it borrowed $4.0 million pursuant to a Term Loan B and used these proceeds for permitted acquisitions. On December 4, 2020, TWFG Holding entered into a fifth amendment to the Term Loan Credit Agreement pursuant to which it borrowed an additional $13.0 million pursuant to a Term Loan C and used these proceeds for permitted acquisitions (such amount, together with the amount borrowed on July 30, 2019, the “Term Loans”). On May 23, 2023, TWFG Holding entered into a ninth amendment to the Term Loan Credit Agreement to, among other things, provide additional flexibility under the covenants contained therein. The Term Loan B was fully repaid by its maturity on July 30, 2024. The aggregate principal amounts of the Term Loan C as of September 30, 2025 is $4.5 million as follows (in thousands):


Remainder of 2025	$	484
Year ended December 31, 2026	1,972
Year ended December 31, 2027	2,034

Total	$	4,490

The Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank National Association provides a revolving credit facility to the Company, with commitments in an aggregate principal amount not to exceed $50.0 million (as amended on June 20, 2024, the “Revolving Facility,” and together with the Term Loan Credit Agreement, the “Credit Agreements”). Borrowings constituting revolving loans under the Revolving Credit Agreement incur interest at the Term SOFR Rat e (as defined therein) for the applicable interest period plus a margin based on the consolidated leverage ratio of the Company between 2% and 2.75%, and a 0.10% adjustment. The borrowings under the Revolving Facility may be used by the Company for permitted acquisitions, working capital and general corporate purposes. The Company pays a commitment fee on unutilized amounts under the Revolving Facility of 0.20% up to 0.35% based on the consolidated leverage ratio. For the period ended September 30, 2025 and December 31, 2024, the Revolving Facility has an unutilized capacity of $50.0 million and $50.0 million, respectively.

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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. At our option, the revolving credit facility under the Revolving Facility accrues interest on amounts drawn at the Term SOFR Rate or Daily SOFR plus the SOFR Adjustment of 0.10% and Applicable Margin of 2.00% to 2.75%, each as defined in the Revolving Facility. The Term Loans and the Revolving Facility are collateralized by substantially all the Company’s assets, which includes rights to future commissions.

Comparative cash flo ws

The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands):


	Nine Months Ended September 30,
	2025		2024		Variance
Net cash provided by operating activities from continuing operations	$	40,213	$	28,879	$	11,334
Net cash used in investing activities from continuing operations	(63,745)		(21,589)		(42,156)
Net cash (used in) provided by financing activities from continuing operations	(19,249)		147,147		(166,396)
Net change in cash, cash equivalents and restricted cash from continuing operations	(42,781)		154,437		(197,218)
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	$	162,542	$	200,905	$	(38,363)
Cash paid during the period for interest	$	152	$	2,298	$	(2,146)

Comparison of the Nine Months Ended September 30, 2025 and 2024

Operating activities

Operating activities from continuing operations provided $40.2 million and $28.9 million of cash for the nine months ended September 30, 2025 and 2024, respectively. The increase in net cash provided by operating activities was driven by a $5.0 million increase in net income, $0.3 million inflow from the change in working capital between periods, which was primarily attributable to the increased collections on contingent income, and $6.0 million in net change of non-cash adjustments in the period which include amortizatio n, stock-based compensation, and non-cash lease expense. See “Consolidated Results of Operations” above for additional information regarding the results of our operations .

Investing activities

Investing activities from continuing operations us ed $63.7 million and $21.6 million of cash for the nine months ended September 30, 2025 and 2024, respectively. Our net in vesting outflows increased primarily due to the higher level of intangible asset acquisitions in the current period of $54.2 million compared to $21.4 million in the prior period partially offset by $0.5 million inflow from proceeds on the sale of intangible assets and other net decrease in investing outflows of $0.2 million . In addition, the Company made a $10.0 million other investment held by a third party to facilitate premium financing arrangements during the period September 30, 2025. See Note 4 Intangible Assets and Acquisitions to our Condensed Co nsolidated Financial Statements included elsewhere in this Quarterly Report for additional information regarding our asset acquisitions.

Financing activities

Fina ncing activities from continuing operations used $19.2 million and provided $147.1 million of cash for the nine months ended September 30, 2025 and 2024. Our net financing outflows was primarily due to the $200.7 million net proceeds received from the IPO in prior year, but none in the current year, $8.7 million increase in distributions to members, $2.9 million net decrease in carrier liabilities, $2.7 million payment related to tax withholding on vesting of equity awards, and $0.4 million payment for shelf registration costs. The net financing outflows was partially offset by the $41.5 million decrease in payments to notes payable, $7.1 million decrease in deferred offering costs, and $0.4 million decr ease in deferred acquisition payable for the nine months ended September 30, 2025.

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Future sources and uses of liquidity

Our sources of liquidity include (1) cash on hand, (2) net working capital, (3) cash flows from operations and (4) borrowings on our Credit Agreements. 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 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. Although cash from operations is expected to be sufficient to service these activities, we have the ability to borrow under our Credit Agreements to accommodate any timing differences in cash flows. Additionally, we may in the future access the capital markets to obtain equity or debt financing, if needed, including to pursue acquisition opportunities.

We hav e certain obligations related to debt maturities and operating leases. As of September 30, 2025, we had $1.4 million of non-cancelable operating lease obligations for the next 12 months. For the periods following the next 12 months, we have an additional $3.1 million of non-cancelable operating lease obligations. In addition, as of September 30, 2025, we have $4.5 million of d ebt maturities for t he next 12 months comprised of $2.0 million of the remaining balance under the Term Loan C, $0.6 million in a cquisition-related notes, and $1.9 million of acquisition-related payables . For the periods following the next 12 months, we have an additiona l $5.1 million of debt maturities representing $2.5 million under the Term Loan C, and $0.7 million in acquisitio n-related notes, and $1.9 million of ac quisition-related payables . As of September 30, 2025, there was no outstan ding balance under o ur Revolving Facility. 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% and 5.0%, and our effective interest rates on the Term Loan C for the three and nine months ended September 30, 2025 was 3.06%. As of September 30, 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. See Note 6 Debt to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Off-balance sheet arrangements

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our Condensed Consolidated Financial Statements.

Critical accounting estimates

We prepare our Condensed Consolidated Financial Statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues, and expenses in our Condensed Consolidated Financial Statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments; however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. 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.

There have been no material changes in our critical accounting policies during the three months ended September 30, 2025 as compared to those disclosed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies and Estimates” of our Annual Report other than above.

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 Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

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Emerging growth company

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may remain an emerging growth company for up to five years following the IPO. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act unti l such time as those standards apply to private companies. We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices, such as premium amounts, interest rates, and equity prices. We are exposed to market risk through our Book of Business, investments, and borrowings under our Credit Agreements. We use derivative instruments to mitigate our risk related to the effect of rising interest rates on our cash flows. However, we do not use derivative instruments for trading or speculative purposes.

Insurance premium pricing within the P&C insurance industry has historically been cyclical, based on the underwriting capacity of the insurance industry and economic conditions. External events, such as terrorist attacks, man-made and natural disasters, can also have significant impacts on the insurance market. We use the terms “soft market” and “hard market” to describe the business cycles experienced by the industry. A soft market is an insurance market characterized by a period of declining premium rates, which can negatively affect commissions earned by insurance agents. A hard market is an insurance market characterized by a period of rising premium rates, which, absent other changes, can positively affect commissions earned by insurance agents.

Our investments are held p rimarily as cash and cash equivalents. These investments are subject to interest rate risk. The fair values of cash and cash equivalents as of September 30, 2025 and December 31, 2024 approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material. We do not actively invest or trade in equity securities.

As of September 30, 2025, we had $162.5 million in cash and cash equivalents, which earned interest income of $5.7 million for the nine months ended September 30, 2025. The impact of a hypothetical 100 basis point change in interest rates would have reduced/increased interest income by $0.6 million in the Condensed Consolidated Statements of Income.

As of September 30, 2025, we had approxi mately $4.5 million of borrowings outstanding un der our Term Loan Credit Agreement. We repaid the outstanding balances of our Term Loan B and Revolving Facility in full as of June 30, 2024. As of December 31, 2024, we had approximatel y $5.9 million and $0 of borrowings outstanding under our Term Loan Credit Agreement and Revolving Facility, respectively. 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 Condensed Consolidated Financial Statements.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Principal Executive Officer (our Chief Executive Officer) and Principal Financial Officer (our Chief Financial Officer), has evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the nine months ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II - Other Information

Item 1. Legal Proceedings

From time-to-time, we may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business. Although the results of litigation and claims are inherently unpredictable and uncertain, we are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed under Part I, Item 1A. Risk Factors in our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Securities

None.

Use of Proceeds

We received approximately $192.9 million of net proceeds after deducting underwriting discounts and commissions of $14.4 million and related offering expenses of approximately $7.8 million from the IPO. We used the net proceeds from the IPO (including the net proceeds received from the underwriters’ exercise of their option to purchase additional shares of Class A Common Stock) to acquire a number of newly issued LLC Units equal to the number of shares of Class A Common Stock in the IPO from TWFG Holding, at a purchase price per LLC Unit equal to the initial public offering price of Class A Common Stock after underwriting discounts and commissions. TWFG Holding used a portion of the proceeds it received from the sale of LLC Units to pay the expenses in connection with the IPO and the Reorganization Transactions and to repay in full outstanding debt under our Revolving Facility in the amount of $41.0 million.

Issuer Purchases of Equity Securities

None.

Item 5. Other Information

(a) None.

(b) None.

(c) During the period covered by this Quarterly Report, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408, that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

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Item 6. Exhibits

The following exhibits are filed as part of this report:


Exhibit number						Description
3.1						Amended and Restated Certificate of Incorporation of TWFG, Inc., dated July 17, 2024 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-42177) filed on July 23, 2024)

3.2						Amended and Restated By-Laws of TWFG, Inc., dated July 17, 2024 (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-42177) filed on July 23, 2024)








10.1*						Amended Managing General Agency and Claims Administration Agreement by and between The Woodlands Insurance Company and TWFG General Agency, LLC dated as of September 1, 2025

31.1*						Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*						Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS						XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH						XBRL Schema Document

101.CAL						XBRL Calculation Linkbase Document

101.LAB						XBRL Label Linkbase Document

101.PRE						XBRL Presentation Linkbase Document

101.DEF						XBRL Definition Linkbase Document

104						Cover Page Interactive Data File (formatted as Inline XBRL)

*Filed herewith.

** Furnished.

+ Indicates a management contract or compensatory plan or agreement.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	TWFG, Inc.
Date: November 12, 2025	By:	/s/ Richard F. Bunch III
		Name: Richard F. Bunch III
		Title: Chief Executive Officer
		(Principal Executive Officer)



Date: November 12, 2025	By:	/s/ Janice E. Zwinggi
		Name: Janice E. Zwinggi
		Title: Chief Financial Officer
		(Principal Financial Officer)

TABLE OF CONTENTS

Part I - Financial Information Item 1. Financial Statements Item 2. Management's Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II - Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 5. Other Information Item 6. Exhibits

Exhibits

3.1 Amended and Restated Certificate of Incorporation of TWFG, Inc., dated July 17, 2024 (incorporated by reference to Exhibit 3.1 to the Registrants Current Report on Form 8-K (File No. 001-42177) filed on July 23, 2024) 3.2 Amended and Restated By-Laws of TWFG, Inc., dated July 17, 2024 (incorporated by reference to Exhibit 3.2 to the Registrants Current Report on Form 8-K (File No. 001-42177) filed on July 23, 2024) 10.1* Amended Managing General Agency and Claims Administration Agreement by and between The Woodlands Insurance Company and TWFG General Agency, LLC dated as of September 1, 2025 31.1* Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

TWFG 10-Q Quarter ended Sept. 30, 2025

Exhibits