BWIN · The Baldwin Insurance Group, Inc.

Period Performance

Period Performance

For the second quarter of 2025, The Baldwin Insurance Group reported total revenues of $378.8 million, an 11% increase compared to $339.8 million in Q2 2024. Organic revenue growth was 11%, driven by strong performance in Underwriting, Capacity & Technology Solutions (UCTS) and Insurance Advisory Solutions (IAS). Operating income surged 70% to $27.9 million, yielding an operating margin of 7.4% versus 4.8% a year ago, reflecting revenue scale and lower non-cash charges. Adjusted EBITDA grew 14% to $85.5 million, with margin expanding 100 basis points to 23%. Net loss improved to $(5.1) million from $(30.9) million, benefiting from operating leverage and lower debt extinguishment costs. Diluted loss per share was $(0.05) compared to $(0.28) in the prior year. For the first six months, total revenues rose 10% to $792.2 million, operating income increased 66% to $84.0 million, and adjusted EBITDA margin held steady at 25%. Net income was $19.8 million versus $8.2 million in H1 2024.

Segment Dynamics

• Insurance Advisory Solutions (IAS): Q2 revenue grew 9% to $183.3 million, with core commissions up 11% on 22% sales velocity. Operating income jumped 158% to $18.9 million as colleague compensation grew slower than revenue and amortization declined 17%. Profit-sharing was flat. The segment benefited from rate/exposure gains (~130 bps) and lower earnout incentives.
• Underwriting, Capacity & Technology Solutions (UCTS): Revenues increased 20% to $147.5 million, led by MSI ($13.3M incremental), Capacity Solutions ($6.5M), and the new Captive ($5.5M). Operating income rose 48% to $27.2 million, with margin expanding to 18.5% despite higher outside commissions and Captive-related losses ($5.0M in Q2). The Wholesale Business divestiture (Q1 2024) created a $5.5M revenue headwind.
• Mainstreet Insurance Solutions (MIS): Revenue dipped 1% to $66.6 million, as core commissions fell 4% (legacy Mainstreet -$2.2M, Westwood -$0.6M). Profit-sharing surged 62% on improved loss ratios. Operating income declined 41% to $4.2 million due to higher amortization and legal settlements.
• Corporate and Other: Revenue elimination increased to $18.5M from $17.8M on higher intercompany activity (QBE agreement). Operating loss widened to $(22.4)M from $(16.3)M, driven by higher colleague compensation, professional fees, and technology costs.

Forward View

Management expects interest expense to remain relatively flat year-over-year as higher borrowings are offset by lower rates post-refinancing. The newly formed Reciprocal exchange began writing business late Q2 and is expected to contribute to UCTS through equity method income. The Captive business will continue to generate losses and LAE as it ramps. No quantitative guidance was provided, but the company highlighted continued investment in MSI products and organic growth initiatives. The QBE Program Administrator Agreement is anticipated to drive further intercompany revenue growth. Capital resources remain strong with $105.7 million cash and $474 million revolver availability, sufficient to fund earnout obligations and partnership opportunities.

Notes & Operating Detail

Balance Sheet & Liquidity

Cash and cash equivalents stood at $105.7M at June 30, 2025, up from $90.0M at year-end 2024. Fiduciary cash of $278.0M is held separately for client premiums. Total debt (including revolver) was $1,616.1M, consisting of $112M drawn on the revolving line of credit, $931.1M term loans (net of $27.1M unamortized issuance costs), and $600M 7.125% Senior Secured Notes. Shareholders' equity was $1,049.9M, with an accumulated deficit of $200.6M. The January 2025 refinancing added $100M incremental term loans, increasing leverage modestly.

Commitments & Contractual Obligations

The only purchase commitment disclosed is a $3.4M donation to the University of South Florida, payable through October 2028. Contingent earnout liabilities totaled $16.7M at fair value, with a maximum exposure of $63.2M. Subsequent to quarter end, the Company committed $100M ($75M cash + $25M deferred) to acquire Hippo's homebuilder distribution network, funded by an additional $68M revolver draw in July 2025.

Capital Allocation (buybacks, dividends, debt, capex)

No share buybacks or dividends were declared. Capital expenditures for the first half of 2025 were $20.3M (2.6% of revenue). Debt activity focused on refinancing: the $835.8M 2024 term loans were replaced with $935.8M 2025 term loans, and the revolver was drawn $112M. No debt was repaid beyond normal amortization.

Segment / Geographic Mix (if disclosed at note level)

Three operating segments: Insurance Advisory Solutions (IAS) revenue $183.3M (+9% YoY), Underwriting, Capacity & Technology Solutions (UCTS) revenue $147.5M (+20.4% YoY, driven by new Captive and MGA growth), and Mainstreet Insurance Solutions (MIS) revenue $66.6M (-0.7% YoY). Net income for segments: IAS $17.8M (9.7% margin), UCTS $27.1M (18.4% margin), MIS $4.2M (6.3% margin). No geographic breakdown is provided.