Baldwin Insurance Group, Inc. (BWIN)

CIK: 0001781755. SIC: 6411 Insurance Agents, Brokers & Service. Latest 10-K as of: 2026-02-26.

SIC breadcrumb: Finance, Insurance, And Real Estate > SIC Major Group 64 > SIC 6411 Insurance Agents, Brokers & Service

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1781755. Latest filing source: 0001781755-26-000018.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001781755.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001781755.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001781755-26-000034.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-04. Report date: 2026-03-31.

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 consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 26, 2026. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.

THE COMPANY

The Baldwin Insurance Group, Inc. is a holding company and sole managing member of The Baldwin Insurance Group Holdings, LLC (“Baldwin Holdings”) and its sole material asset is its ownership interest in Baldwin Holdings, through which all of our business is conducted. In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the words “Baldwin,” the “Company,” “we,” “us” and “our” refer to The Baldwin Insurance Group, Inc., together with its consolidated subsidiaries, including Baldwin Holdings and its consolidated subsidiaries and affiliates.

Baldwin is an independent insurance distribution firm providing indispensable expertise and insights that strive to give our clients the confidence to pursue their purpose, passion and dreams. As a team of dedicated entrepreneurs and insurance professionals, we have come together to help protect the possible for our clients. We do this by delivering bespoke client solutions, services, and innovation through our comprehensive and tailored approach to risk management, insurance, and employee benefits. We support our clients, colleagues, insurance company partners and communities through the deployment of vanguard resources and capital to drive our organic and inorganic growth. When we consistently execute for these key stakeholders, we believe that the outcome is an increase in value for our stockholders. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits. Our growth plan includes continuing to recruit, train and develop industry leading talent, continuing to add geographic representation, insurance product expertise and end-client industry expertise via our partnership strategy, and continuing to build out MSI, which delivers proprietary, technology-enabled insurance solutions to our internal risk advisors as well as to a growing channel of external distribution partners. We are a destination employer supported by an award-winning culture, powered by exceptional people and fueled by industry-leading growth and innovation.

We represent over three million clients across the United States and internationally. Our team now comprises approximately 5,000 colleagues—including those who joined us through our January 2026 partnerships. Among them are approximately 900 risk advisors, who are fiercely independent, relentlessly competitive and “insurance geeks.” We have approximately 125 offices in 24 states, all of which are equipped to provide diversified products and services to empower our clients at every stage through our three operating groups.

•Insurance Advisory Solutions (“IAS”) provides expertly-designed commercial risk management, employee benefits and private risk management solutions for businesses and high-net-worth individuals, as well as their families. Risk management solutions typically involve the sale of a wide variety of both commercial and personal lines insurance products that mitigate risks for firms and individuals. Employee benefits solutions can include health plans, dental plans, and retirement accounts for firms and their employees. We are privileged to have partnered with some of the highest quality independent insurance brokers across the country with vast and varied strategic capabilities and expertise. We have been intentional in recognizing and elevating this talent across the organization to build world class industry-focused practice groups and product Centers of Excellence that can be leveraged by the entire firm.

•Underwriting, Capacity & Technology Solutions (“UCTS”) consists of three distinct divisions—MSI, our Capacity Solutions group (which includes our reinsurance brokerage business, Juniper Re, our reinsurance MGA business, MultiStrat, and our captive management business), and the Captive business. Through MSI, we manufacture proprietary, technology-enabled insurance products that are then distributed (in many instances via technology and/or API integrations) internally via our risk advisors across our other operating groups and externally via select distribution partners, with a focus on sheltered channels where our products deliver speed, ease of use and certainty of execution. An example of this is our national embedded renters insurance product sold at point of lease via integrations with property management software providers. As a prominent growth driver for the Company, we have invested heavily in the expansion of our MGA product suite, which is now comprised of more than 20 products across commercial, personal and professional lines.

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In January 2025, we received final approval and a Certificate of Authority from the Texas Department of Insurance to form a Texas-domiciled reciprocal insurance exchange (the “Reciprocal”). Baldwin holds an investment in Builder Risk Management, LLC, which serves as the Attorney-in-Fact (the “AIF”) for the Reciprocal. The third-party led capitalization of the Reciprocal closed and funded in full on May 6, 2025, and we began writing business into the Reciprocal late in the second quarter of 2025. Based on the structure of the Reciprocal, we do not consolidate the Reciprocal’s financial results, and the AIF entity is treated as an equity method investment held by UCTS.

UCTS includes TBG Assurance Company, LLC, a wholly-owned protected cell captive insurance company (“PCC”) domiciled in Tennessee, which was established to allow Baldwin to further participate in the underwriting results of a small portion of its MGA programs. The PCC allows for the creation of multiple independent cells (series) within a single legal entity, TBG Assurance Company, LLC (the “Core”). The initial series, MSI Multifamily Series Protected Cell (the “MSI Cell” and, collectively with the Core, the “Captive”) became effective January 1, 2025.

•Mainstreet Insurance Solutions (“MIS”) offers personal insurance, commercial insurance and life and health solutions to individuals and businesses in their communities, with a focus on accessing clients via sheltered distribution channels, which include, but are not limited to, new home builders, realtors, mortgage originators/lenders, master planned communities, and various other community centers of influence. We have invested deeply in talent, technology and capabilities across MIS, including in Westwood's homeowners solutions that are embedded in many of the top home builders in the United States, the national expansion of our distribution footprint through our National Mortgage and Real Estate Channel, and enhanced digital capabilities focused on improving the risk advisor and client experience. MIS also offers consultation for government assistance programs and solutions, including traditional Medicare, Medicare Advantage and Affordable Care Act, to seniors and eligible individuals through a network of primarily independent contractor agents.

In 2011, we adopted the “Azimuth” as our corporate and cultural constitution. Named after a historical navigation tool used to find “true north,” the Azimuth asserts our core values, business basics and stakeholder promises. The ideals encompassed by the Azimuth support our mission to deliver indispensable, tailored insurance and risk management insights and solutions to our clients. We strive to be regarded as the preeminent insurance advisory firm—fueled by relationships, powered by people and exemplified by client adoption and loyalty. This type of environment is upheld by the distinct vernacular we use to describe our services and culture. We are a firm, instead of an agency; we have colleagues, instead of employees; and we have risk advisors, instead of producers/agents. We serve clients instead of customers and we refer to our strategic acquisitions as partnerships. We refer to insurance brokerages that we have acquired, or in the case of asset acquisitions, the producers, as partners.

Seasonality

The insurance brokerage market is seasonal and our results of operations are somewhat affected by seasonal trends. Our adjusted EBITDA and adjusted EBITDA margins are typically highest in the first quarter and lowest in the fourth quarter. This variation is primarily due to fluctuations in our revenues, while overhead remains consistent throughout the year. Our revenues are generally highest in the first quarter due to a higher degree of first quarter policy commencements and renewals in certain IAS and MIS lines of business such as employee benefits, commercial and Medicare. In addition, a higher proportion of our first quarter revenue is derived from our highest margin businesses.

Partnerships can significantly impact adjusted EBITDA and adjusted EBITDA margins in a given year and may increase the amount of seasonality within the business, especially results attributable to partnerships that have not been fully integrated into our business or owned by us for a full year.

PARTNERSHIPS

We utilize partnerships to complement and expand our business. We source partnerships through proprietary deal flow, competitive auctions and cultivated industry relationships. We are currently considering partnership opportunities in all of our operating groups, including businesses to complement or expand our MGA product suite.

The financial impact of partnerships may affect the comparability of our results from period to period. Our acquisition strategy also entails certain risks, including the risks that we may not be able to successfully source, value, close, integrate and effectively manage businesses that we acquire. To mitigate that risk, we have a professional team focused on finding new partners and integrating new partnerships. Executing on partnership opportunities is a key pillar in our long-term growth strategy.

We completed three partnerships for an aggregate purchase price of $1.6 billion during the three months ended March 31, 2026 as discussed further below. The operating results of these partnerships have been included in the condensed consolidated statements of comprehensive income (loss) from their respective acquisition dates.

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We acquired the outstanding equity interests of the business of Cobbs Allen Capital Holdings, LLC (“CAC Group”), an IAS partner effective January 1, 2026, to significantly expand Baldwin’s specialty capabilities and strengthen our specialty product lines and data and analytics platform.

We acquired the outstanding equity interests of Creisoft, Inc. (“Obie”), a UCTS partner effective January 2, 2026, to expand access to embedded insurance distribution capabilities for MSI within UCTS and strengthen its offerings in the rapidly growing real estate investor market.

We acquired substantially all the assets of Foley Insurance Agency, Inc., doing business as Capstone Group (“Capstone”), an IAS partner effective January 2, 2026, to expand Baldwin’s regional presence and enhance our ability to deliver comprehensive risk management solutions to a wider client base.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

The following discussi

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-26. Report date: 2025-12-31.

ITEM 7. 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 consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Item 1A. Risk Factors and included elsewhere in this Annual Report on Form 10-K.

See also “Note Regarding Forward-Looking Statements.”

EXECUTIVE SUMMARY OF 2025 FINANCIAL RESULTS

We are an independent insurance distribution firm providing indispensable expertise and insights that strive to give our clients the confidence to pursue their purpose, passion and dreams. The following is a summary of our 2025 financial results.

Revenues for the year ended December 31, 2025 were $1.5 billion, an increase of $115.8 million, or 8%, year over year. Core commissions and fees grew organically by $98.5 million as a result of new and renewal business from clients across industry sectors and continued outperformance from MSI. Commissions and fees contributed by partnership activity were $23.6 million. In addition, profit-sharing and other revenue grew organically by $1.5 million. This growth was offset in part by a decrease in commissions and fees of $5.8 million related to the divestiture of our Wholesale Business in the first quarter of 2024.

Operating expenses for the year ended December 31, 2025 were $1.4 billion, an increase of $102.6 million, or 8%, year over year. The increase in operating expenses was driven by higher other operating expenses, including increased technology outlay as we continue to invest in automation and efficiency and higher incurred losses and loss adjustment expense related to our newly established Captive business, as well as higher colleague compensation and benefits and outside commissions, largely reflecting the correlation between compensation and revenue growth, and increased amortization expense associated with our partnership activity.

Interest expense, net, for the year ended December 31, 2025 was $121.4 million, a decrease of $2.2 million, or 2%, year over year, as a result of lower average interest rates due to the 2025 Refinancings and federal rate reductions, offset in part by higher average borrowings. We expect interest expense to grow in the near term on a year-over-year basis due to higher borrowings under the JPM Credit Facility to fund partnership opportunities and the settlement of deferred payment obligations, offset slightly by lower expected average interest rates.

During the year ended December 31, 2025, we reported a loss on extinguishment and modification of debt of $6.2 million related to the 2025 Refinancings.

Net loss for the year ended December 31, 2025 was $54.2 million, or a $0.50 loss per fully diluted share, compared to a net loss of $41.1 million, or a $0.39 loss per fully diluted share, in the same period of 2024.

Adjusted EBITDA for the year ended December 31, 2025 was $341.5 million, an increase of $29.0 million year over year. Adjusted EBITDA margin was 22.7% for 2025, a 20 basis point expansion compared to 22.5% in 2024.

Adjusted net income for the year ended December 31, 2025 was $198.9 million, an increase of $22.0 million year over year. Adjusted diluted EPS was $1.67 for 2025, an increase of 11% over $1.50 for 2024.

Organic revenue for the year ended December 31, 2025 was $1.47 billion compared to $1.38 billion for the same period of 2024. Organic revenue growth was $100.0 million, or 7%, for 2025 compared to $196.9 million, or 17%, for 2024.

Refer to the Non-GAAP Financial Measures section below for reconciliations of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted diluted EPS, organic revenue and organic revenue growth to the most directly comparable GAAP financial measures.

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RECENT DEVELOPMENTS

Effective January 1, 2026, the Company acquired the outstanding equity interests of the business of CAC Group for aggregate consideration paid by the Company at closing consisting of $438.0 million of cash (subject to customary purchase price adjustments) and 23,200,000 shares of the Company's Class A common stock. The purchase consideration also includes a deferred payment of $70.0 million in cash, payable upon the fourth anniversary of the closing date of the CAC Group Transaction. CAC Group may be entitled to receive up to $250.0 million of additional contingent consideration payable in cash based upon the achievement of certain post-closing revenue focused performance measures. The partnership with CAC Group will significantly expand the specialty capabilities of the Company's IAS operating group and strengthen its specialty product lines and data and analytics platform.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

For a discussion of our 2023 financial results and a comparison of financial results for the years ended December 31, 2024 to 2023, refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K filed with the SEC on February 25, 2025.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023 and the related notes and other financial information included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.

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 under Item 1A. Risk Factors.

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The following is a discussion of our consolidated results of operations for the years ended December 31, 2025 and 2024.

For the Years

Ended December 31,

Variance

(in thousands, except percentages)

2025

2024

Amount

%

Revenues:

Core commissions and fees

$

1,383,055 

$

1,268,790 

$

114,265 

9 

%

Profit-sharing and other income

110,625 

108,326 

2,299 

2 

%

Commissions and fees

1,493,680 

1,377,116 

116,564 

8 

%

Investment income

11,204 

11,921 

(717)

(6)

%

Total revenues

1,504,884 

1,389,037 

115,847 

8 

%

Operating expenses:

Colleague compensation and benefits

777,531 

762,219 

15,312 

2 

%

Outside commissions

279,711 

269,829 

9,882 

4 

%

Other operating expenses

240,282 

192,366 

47,916 

25 

%

Amortization expense

121,316 

102,730 

18,586 

18 

%

Change in fair value of contingent consideration

5,594 

(4,949)

10,543 

n/m

Depreciation expense

6,514 

6,194 

320 

5 

%

Total operating expenses

1,430,948 

1,328,389 

102,559 

8 

%

Operating income

73,936 

60,648 

13,288 

22 

%

Other income (expense):

Interest expense, net

(121,428)

(123,644)

2,216 

(2)

%

Gain on divestitures

290 

38,953 

(38,663)

(99)

%

Loss on extinguishment and modification of debt

(6,226)

(15,113)

8,887 

(59)

%

Other income (expense), net

635 

(194)

829 

n/m

Total other expense

(126,729)

(99,998)

(26,731)

27 

%

Loss before income taxes and share of net earnings of equity method investee

$

(52,793)

$

(39,350)

$

(13,443)

34 

%

__________

n/m    not meaningful

Seasonality

The insurance brokerage market is seasonal and our results of operations are somewhat affected by seasonal trends. Our adjusted EBITDA and adjusted EBITDA margins are typically highest in the first quarter and lowest in the fourth quarter. This variation is primarily due to fluctuations in our revenues, while overhead remains consistent throughout the year. Our revenues are generally highest in the first quarter due to a higher degree of first quarter policy commencements and renewals in certain IAS and MIS lines of business such as employee benefits, commercial and Medicare. In addition, a higher proportion of our first quarter revenue is derived from our highest margin businesses.

Partnerships can significantly impact adjusted EBITDA and adjusted EBITDA margins in a given year and may increase the amount of seasonality within the business, especially results attributable to partnerships that have not been fully integrated into our business or owned by us for a full year.

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Commissions and Fees

We earn commissions and fees by facilitating the arrangement between insurance company and reinsurance company partners and clients for the insurance and/or reinsurance company to provide insurance and/or reinsurance to the insured party. Our commissions are usually a percentage of the premium paid by the insured and generally depend on the type of insurance, the particular insurance or reinsurance company partner and the nature of the services provided. Under certain arrangements with clients, we earn pre-negotiated service fees for insurance placement services. Additionally, we earn policy fees for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance or reinsurance company partners, including delivery of policy documents, processing payments and other administrative functions, and the Captive business earns revenue from assumed premium. We may also receive profit-sharing commissions, which represent forms of variable consideration paid by insurance company partners and reinsurance company partners associated with the placement of coverage. Profit-sharing commissions are generally based on underwriting results, but may also contain considerations for volume, growth or retention. Other revenue streams include other ancillary income, premium financing income, and marketing income based on negotiated cost reimbursement for fulfilling specific targeted Medicare marketing campaigns.

Commissions and fees increased $116.6 million, or 8%, year over year to $1.5 billion, driven by organic growth in core commissions and fees of $98.5 million related to new and renewal business across client industry sectors and continued outperformance from MSI, partnership activity of $23.6 million, and organic growth in profit-sharing and other revenue of $1.5 million. This growth was offset in part by a decrease in commissions and fees of $5.8 million related to the divestiture of our Wholesale Business in the first quarter of 2024.

Colleague Compensation and Benefits

Colleague compensation and benefits is our largest expense. It consists of (i) base compensation comprising salary, bonuses and benefits paid and payable to colleagues, and commissions paid to colleagues, and (ii) equity-based compensation associated with the grants of restricted and unrestricted stock awards to senior management, colleagues, risk advisors and directors. We expect to continue to experience a general rise in colleague compensation and benefits expense commensurate with expected revenue growth as our compensation arrangements with our colleagues and risk advisors contain significant bonus or commission components driven by the results of our operations. In addition, we operate in competitive markets for human capital and need to maintain competitive compensation levels as we expand geographically and create new products and services.

Colleague compensation and benefits expense increased $15.3 million, or 2%, year over year. Partnership activity contributed $8.2 million to the increase in colleague compensation and benefits in 2025, offset in part by a $1.4 million decrease related to our Wholesale Business, which was sold in the first quarter of 2024. After excluding colleague compensation and benefits expense related to our partnerships and divestitures, colleague compensation and benefits expense increased $8.5 million due to increases in colleague compensation of $33.8 million, inside advisor commissions of $8.9 million and benefits and other of $8.4 million as a result of the continued investment in our growth and elevated health plan costs, offset in part by a decrease in colleague earnout incentives of $43.7 million resulting from settlement activity in 2025.

Outside Commissions

Outside commissions increased $9.9 million, or 4%, year over year. After excluding outside commissions of $3.0 million earned by the Wholesale Business during 2024 for which there was no comparable expense in 2025, outside commissions increased $12.9 million, or 5%. Outside commissions increased at a lower rate than core commissions and fees primarily due to continued scaling of our UCTS business, product mix shift and contributions from the Capacity Solutions group (which generally does not have significant outside commissions).

Other Operating Expenses

Other operating expenses include travel, accounting, legal and other professional fees, placement fees, rent, office expenses and other costs associated with our operations. Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our colleagues and the overall size and scale of our business operations.

Other operating expenses increased $47.9 million year over year, driven by higher incurred losses and loss adjustment expense (“LAE”) of $19.1 million related to our newly established Captive business, professional fees of $14.0 million due to partnership activity and fees related to organizing the Reciprocal, technology and software-related costs of $4.4 million, advertising and marketing of $3.6 million in connection with the continued rollout of our rebranding, legal settlement expense of $2.1 million, and licenses and taxes of $2.1 million due to growth in the business.

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Amortization Expense

Amortization expense increased $18.6 million year over year, driven by our 2025 partnership activity and an increase in capitalized software, offset in part by the acceleration of trade names amortization during 2024 in connection with rebranding within IAS.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration was a $5.6 million loss for the year ended December 31, 2025 compared to a $4.9 million gain for the same period of 2024. The fair value loss related to contingent consideration for the year ended December 31, 2025 was impacted by positive changes in revenue growth trends of certain partners and accretion of the contingent earnout obligations approaching their respective measurement dates, in addition to a loss recognized in reclassifying $1.8 million of earnouts from colleague earnout incentives.

Interest Expense, Net

Interest expense, net, decreased $2.2 million year over year as a result of lower average interest rates due to the 2025 Refinancings and federal rate reductions, offset in part by higher average borrowings. We expect interest expense to grow in the near term on a year-over-year basis due to higher borrowings under the JPM Credit Facility to fund partnership opportunities and the settlement of deferred payment obligations, offset slightly by lower expected interest rates.

Refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk for further discussion of the impact of interest rates on our results of operations, financial condition and cash flows.

Gain on Divestitures

Gain on divestitures decreased $38.7 million year over year, driven by a $35.1 million gain recorded during 2024 in connection with the sale of our Wholesale Business.

Loss on Extinguishment and Modification of Debt

Loss on extinguishment and modification of debt of $6.2 million for the year ended December 31, 2025 relates to the 2025 Refinancings. Loss on extinguishment and modification of debt of $15.1 million for the same period of 2024 relates to the JPM Credit Facility refinancing completed in May 2024.

FINANCIAL CONDITION—COMPARISON OF CONSOLIDATED FINANCIAL CONDITION AT DECEMBER 31, 2025 TO DECEMBER 31, 2024.

Our total assets and total liabilities increased $327.5 million and $251.9 million, respectively, year over year. The most significant changes in assets and liabilities are described below.

Assumed premiums, commissions and fees receivable, net increased $58.6 million as a result of overall revenue growth and the timing of cash collections.

Right-of-use assets and operating lease liabilities decreased $10.4 million and $10.1 million, respectively, due to ongoing measures to consolidate our facilities footprint in certain geographies.

Other assets increased $34.4 million driven by investments in third party businesses that support the growth of our business, higher deferred commission expense related to new business growth and capitalization of implementation costs related to new technology platforms.

Intangible assets, net increased $24.9 million driven by the intangible assets capitalized in conjunction with 2025 partnerships of $118.4 million, and capitalized software development costs related to infrastructure to support our business of $35.5 million, offset in part by amortization expense of $121.3 million.

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Goodwill increased $104.8 million as a result of our 2025 partnerships.

Commissions payable decreased $22.2 million driven primarily by the timing of commission payments relative to the timing of collections from clients.

Accrued expenses and other current liabilities increased $86.7 million as a result of increases in accrued expenses relating, in part, to the timing of expenses incurred in connection with January 2026 partnerships, deferred payments relating to 2025 partnerships, and accrued compensation and benefits relating to our overall growth and increased health insurance costs.

Colleague earnout incentives decreased $32.8 million as a result of settlement activity in 2025.

The revolving line of credit increased $107.0 million driven by draws to support growth in our business, including the 2025 partnerships.

Long-term debt increased $172.2 million due to the 2025 Refinancings during which we upsized the Term Loans by $175.0 million in the aggregate to support growth in our business, including our 2025 partnerships.

Contingent earnout liabilities decreased $122.3 million resulting from settlements of $146.3 million, offset in part by issuances related to our 2025 partnerships of $18.4 million and an increase in fair value of contingent consideration of $5.6 million.

Fiduciary assets and liabilities increased $78.5 million and $79.0 million, respectively, attributable to overall growth in our business and higher volumes of agency bill premium activity, as well as the timing of cash collections and carrier payable settlements.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA, adjusted EBITDA margin, organic revenue, organic revenue growth, adjusted net income and adjusted diluted earnings per share (“EPS”), are not measures of financial performance under GAAP and should not be considered substitutes for GAAP measures, including commissions and fees (for organic revenue and organic revenue growth), net income (loss) (for adjusted EBITDA and adjusted EBITDA margin), net income (loss) attributable to Baldwin (for adjusted net income) or diluted earnings (loss) per share (for adjusted diluted EPS), 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 commissions and fees, net income (loss), net income (loss) attributable to Baldwin, diluted earnings (loss) per share or other consolidated income statement data prepared in accordance with GAAP. Other companies in our industry may define or calculate these non-GAAP financial measures differently than we do, and accordingly, these measures may not be comparable to similarly titled measures used by other companies.

We calculate organic revenue based on commissions and fees for the relevant period by excluding (i) the first 12 months of commissions and fees generated from new partners and (ii) commissions and fees from divestitures. Organic revenue growth is the change in organic revenue period-to-period, with prior period results adjusted to (i) include commissions and fees that were excluded from organic revenue in the prior period because the relevant partners had not yet reached the 12-month owned mark, but which have reached the 12-month owned mark in the current period, and (ii) exclude commissions and fees related to divestitures from organic revenue. For example, commissions and fees from a partner acquired on June 1, 2024 are excluded from organic revenue for 2024. However, after June 1, 2025, results from June 1, 2024 to December 31, 2024 for such partners are compared to results from June 1, 2025 to December 31, 2025 for purposes of calculating organic revenue growth in 2025. Organic revenue growth is a key metric used by management and our board of directors to assess our financial performance. We believe that organic revenue and organic revenue growth are appropriate measures of operating performance as they allow investors to measure, analyze and compare growth in a meaningful and consistent manner.

We define adjusted EBITDA as net income (loss) before interest, taxes, depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related partnership and integration expenses, transformation costs, severance, and certain non-recurring items, including those related to raising capital. We believe that adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance.

60

Adjusted EBITDA margin is calculated as adjusted EBITDA divided by total revenue. Adjusted EBITDA margin is a key metric used by management and our board of directors to assess our financial performance. We believe that adjusted EBITDA margin is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance. We believe that adjusted EBITDA margin is helpful in measuring profitability of operations on a consolidated level.

Adjusted EBITDA and adjusted EBITDA margin have important limitations as analytical tools. For example, adjusted EBITDA and adjusted EBITDA margin:

•do not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;

•do not reflect changes in, or cash requirements for, our working capital needs;

•do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations;

•do not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;

•do not reflect share-based compensation expense and other non-cash charges; and

•exclude certain tax payments that may represent a reduction in cash available to us.

We define adjusted net income as net income (loss) attributable to Baldwin adjusted for depreciation, amortization, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, transaction-related partnership and integration expenses, transformation costs, severance, and certain non-recurring costs that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments. We believe that adjusted net income is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance.

Adjusted diluted EPS measures our per share earnings excluding certain expenses as discussed above for adjusted net income and assuming all shares of Class B common stock were exchanged for Class A common stock on a one-for-one basis. Adjusted diluted EPS is calculated as adjusted net income divided by adjusted diluted weighted-average shares outstanding. We believe adjusted diluted EPS is useful to investors because it enables them to better evaluate per share operating performance across reporting periods.

Organic Revenue and Organic Revenue Growth

The following table reconciles organic revenue and organic revenue growth to commissions and fees, which we consider to be the most directly comparable GAAP financial measure:

For the Years

Ended December 31,

(in thousands, except percentages)

2025

2024

Commissions and fees

$

1,493,680 

$

1,377,116 

Partnership commissions and fees(1)

(23,588)

— 

Organic revenue

$

1,470,092 

$

1,377,116 

Organic revenue growth(2)

$

100,049 

$

196,922 

Organic revenue growth %(2)

7 

%

17 

%

__________

(1)    Includes the first 12 months of such commissions and fees generated from newly acquired partners.

(2)    Organic revenue for the year ended December 31, 2024 used to calculate organic revenue growth for the year ended December 31, 2025 was $1.37 billion, which is adjusted to exclude commissions and fees from divestitures that occurred during 2025 and 2024.

61

Adjusted EBITDA and Adjusted EBITDA Margin

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to net loss, which we consider to be the most directly comparable GAAP financial measure:

For the Years

Ended December 31,

(in thousands, except percentages)

2025

2024

Revenues

$

1,504,884 

$

1,389,037 

Net loss

$

(54,154)

$

(41,081)

Adjustments to net loss:

Interest expense, net

122,778 

123,644 

Amortization expense

121,316 

102,730 

Share-based compensation

71,113 

65,503 

Transaction-related partnership and integration expenses

23,051 

10,501 

Transformation costs(1)

7,003 

— 

Severance

6,790 

5,756 

Depreciation expense

6,514 

6,194 

Loss on extinguishment and modification of debt

6,226 

15,113 

Change in fair value of contingent consideration

5,594 

(4,949)

Income and other taxes(2)

4,255 

7,184 

Colleague earnout incentives

(1,779)

41,917 

Impairment of right-of-use assets

1,275 

— 

Gain on divestitures

(290)

(38,953)

Loss on interest rate caps

18 

244 

Other(3)

21,762 

18,682 

Adjusted EBITDA

$

341,472 

$

312,485 

Net loss margin

(4)

%

(3)

%

Adjusted EBITDA margin

22.7 

%

22.5 

%

__________

(1)    Transformation costs represent certain non-recurring colleague compensation and technology-related expenses related to our $3B/30 Catalyst Program, which is designed to accelerate the infusion of automation, business process optimization and artificial intelligence to transform and elevate our workforce and unlock new avenues for growth.

(2)    Income and other taxes include the Tax Receivable Agreement expense and other operating tax expense, such as state taxes, under GAAP.

(3)    Other addbacks to adjusted EBITDA include certain income and expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses.

62

Adjusted Net Income and Adjusted Diluted EPS

The following table reconciles adjusted net income to net loss attributable to Baldwin and reconciles adjusted diluted EPS to diluted loss per share, which we consider to be the most directly comparable GAAP financial measures:

For the Years

Ended December 31,

(in thousands, except per share data)

2025

2024

Net loss attributable to Baldwin

$

(33,813)

$

(24,518)

Net loss attributable to noncontrolling interests

(20,341)

(16,563)

Amortization expense

121,316 

102,730 

Share-based compensation

71,113 

65,503 

Transaction-related partnership and integration expenses

23,051 

10,501 

Transformation costs(1)

7,003 

— 

Severance

6,790 

5,756 

Depreciation

6,514 

6,194 

Loss on extinguishment and modification of debt

6,226 

15,113 

Change in fair value of contingent consideration

5,594 

(4,949)

Other amortization/accretion, net

4,190 

5,841 

Income tax expense(2)

2,172 

6,537 

Colleague earnout incentives

(1,779)

41,917 

Impairment of right-of-use assets

1,275 

— 

Gain on divestitures

(290)

(38,953)

Loss on interest rate caps, net of cash settlements

18 

2,544 

Other(3)

21,762 

18,682 

Adjusted pre-tax income

220,801 

196,335 

Adjusted income taxes(4)

21,859 

19,437 

Adjusted net income

$

198,942 

$

176,898 

Weighted-average shares of Class A common stock outstanding - diluted

67,939 

63,455 

Dilutive weighted-average shares of Class A common stock

3,229 

3,598 

Exchange of Class B common stock(5)

47,737 

50,896 

Adjusted diluted weighted-average shares outstanding

118,905 

117,949 

Diluted loss per share

$

(0.50)

$

(0.39)

Effect of exchange of Class B common stock and net loss attributable to noncontrolling interests per share

0.04 

0.04 

Other adjustments to loss per share

2.31 

2.01 

Adjusted income taxes per share

(0.18)

(0.16)

Adjusted diluted EPS

$

1.67 

$

1.50 

___________

(1)    Transformation costs represent certain non-recurring colleague compensation and technology-related expenses related to our $3B/30 Catalyst Program, which is designed to accelerate the infusion of automation, business process optimization and artificial intelligence to transform and elevate our workforce and unlock new avenues for growth.

(2)    Income tax expense includes the Tax Receivable Agreement expense.

(3)    Other addbacks to adjusted net income include certain income and expenses that are considered to be non-recurring or non-operational, including certain recruiting costs, professional fees, litigation costs and bonuses.

(4)    Represents corporate income taxes at assumed effective tax rate of 9.9% applied to adjusted pre-tax income.

(5)    Assumes the full exchange of Class B common stock for Class A common stock pursuant to the Amended LLC Agreement.

63

INSURANCE ADVISORY SOLUTIONS OPERATING GROUP RESULTS

IAS provides expertly-designed commercial risk management, employee benefits and private risk management solutions for businesses and high-net-worth individuals, as well as their families, through our national footprint, which has assimilated some of the highest quality independent insurance brokers in the country with vast and varied strategic capabilities and expertise.

For the Years

Ended December 31,

Variance

(in thousands, except percentages)

2025

2024

Amount

%

Revenues:

Core commissions and fees

$

661,590 

$

641,286 

$

20,304 

3 

%

Profit-sharing and other income

61,384 

64,871 

(3,487)

(5)

%

Commissions and fees

722,974 

706,157 

16,817 

2 

%

Investment income

4,350 

5,779 

(1,429)

(25)

%

Total revenues

727,324 

711,936 

15,388 

2 

%

Operating expenses:

Colleague compensation and benefits

510,028 

523,370 

(13,342)

(3)

%

Outside commissions

11,431 

11,009 

422 

4 

%

Other operating expenses

86,064 

79,323 

6,741 

8 

%

Amortization expense

56,702 

60,222 

(3,520)

(6)

%

Change in fair value of contingent consideration

5,544 

(10,458)

16,002 

(153)

%

Depreciation expense

1,255 

1,485 

(230)

(15)

%

Total operating expenses

671,024 

664,951 

6,073 

1 

%

Operating income

56,300 

46,985 

9,315 

20 

%

Total other income, net

1,656 

5,172 

(3,516)

(68)

%

Income before income taxes and share of net earnings of equity method investee

$

57,956 

$

52,157 

$

5,799 

11 

%

Commissions and Fees

IAS generates (i) commissions for placing insurance policies on behalf of its insurance company partners; (ii) profit-sharing income based on either the underlying book of business or performance, such as loss ratios; and (iii) fees from consulting and service fee arrangements, which are in place with certain clients for a negotiated fee.

IAS commissions and fees increased $16.8 million, or 2%, year over year to $723.0 million, primarily due to organic growth in core commissions and fees. Growth in our core commissions and fees of $20.3 million was driven by 19% sales velocity (new business as a percentage of prior year commissions and fees) compared to 21% in the prior year. Organic growth was pressured by 380 bps of headwind in underlying rate and exposure during the year, attributable to softening insurance rates, particularly in the property line of business, construction project work weakness and overall lower economic activity. This growth was offset by a decrease in profit-sharing and other income of $3.5 million resulting from rate softness and competition amongst insurance carriers. We expect rate softness to continue into 2026, with a focus on commercial property lines.

Colleague Compensation and Benefits

Colleague compensation and benefits expense for IAS decreased $13.3 million, or 3%, year over year primarily due to a decrease in colleague earnout incentives of $41.0 million resulting from settlement activity in 2025, partially offset by increases in colleague compensation of $14.6 million and inside advisor commissions of $7.6 million related to our growth, and benefits and other of $5.2 million related to elevated health plan costs.

64

Other Operating Expenses

Other operating expenses for IAS increased $6.7 million year over year, primarily due to continued investment in our growth and higher costs relating to professional fees of $5.2 million, legal settlement expense of $3.2 million and advertising and marketing of $1.8 million in connection with the continued rollout of our rebranding, partially offset by lower technology and software-related costs of $1.6 million and travel and entertainment of $1.4 million.

Amortization Expense

Amortization expense for IAS decreased $3.5 million year over year as a result of the acceleration of trade names amortization during 2024 in connection with rebranding within IAS.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration for IAS was a $5.5 million loss for the year ended December 31, 2025 compared to a $10.5 million gain for the same period of 2024. The fair value loss related to contingent consideration for the year ended December 31, 2025 was impacted by positive changes in revenue growth trends of certain IAS partners and accretion of the contingent earnout obligations approaching their respective measurement dates, in addition to a loss recognized in reclassifying $1.6 million of earnouts from colleague earnout incentives.

Total Other Income, Net

Total other income, net for IAS decreased $3.5 million year over year, driven by a $3.8 million gain on divestitures in 2024 related to the sale of certain books of business.

65

UNDERWRITING, CAPACITY & TECHNOLOGY SOLUTIONS OPERATING GROUP RESULTS

UCTS consists of three distinct divisions—MSI, our Capacity Solutions group (which includes our reinsurance brokerage business, Juniper Re; our reinsurance MGA business, MultiStrat; and our captive management business), and the Captive business. Through MSI, we manufacture proprietary, technology-enabled insurance products with a focus on sheltered channels where our products deliver speed, ease of use and certainty of execution, an example of which is our national embedded renters insurance product sold at point of lease via integrations with property management software providers. Our MGA product suite is now comprised of more than 20 products across personal, commercial and professional lines. UCTS’ Wholesale Business was sold in the first quarter of 2024, and its operations are included in our results through February 29, 2024.

For the Years

Ended December 31,

Variance

(in thousands, except percentages)

2025

2024

Amount

%

Revenues:

Core commissions and fees

$

527,245 

$

455,845 

$

71,400 

16 

%

Profit-sharing and other income

17,345 

13,032 

4,313 

33 

%

Commissions and fees

544,590 

468,877 

75,713 

16 

%

Investment income

4,862 

4,062 

800 

20 

%

Total revenues

549,452 

472,939 

76,513 

16 

%

Operating expenses:

Colleague compensation and benefits

116,504 

101,513 

14,991 

15 

%

Outside commissions

264,910 

260,204 

4,706 

2 

%

Other operating expenses

75,452 

41,313 

34,139 

83 

%

Amortization expense

21,114 

14,950 

6,164 

41 

%

Change in fair value of contingent consideration

(1,405)

5,085 

(6,490)

(128)

%

Depreciation expense

656 

568 

88 

15 

%

Total operating expenses

477,231 

423,633 

53,598 

13 

%

Operating income

72,221 

49,306 

22,915 

46 

%

Total other income (expense), net

(426)

34,107 

(34,533)

(101)

%

Income before income taxes and share of net earnings of equity method investee

$

71,795 

$

83,413 

$

(11,618)

(14)

%

Commissions and Fees

UCTS generates (i) commissions for underwriting and placing insurance policies and/or treaties on behalf of its insurance company partners and reinsurance company partners; (ii) policy fee and installment fee revenue for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance or reinsurance company partners, including delivery of policy documents, processing payments and other administrative functions; (iii) profit-sharing income, generally based on the profitability of the underlying book of business of the policies it generates on behalf of its insurance company partners and reinsurance company partners; (iv) fees from service fee arrangements, which are in place with certain clients for a negotiated fee; and (v) assumed premium earned in the Captive business.

UCTS commissions and fees increased $75.7 million, or 16%, year over year to $544.6 million, primarily due to organic growth in core commissions and fees. Total growth in our core commissions and fees of $71.4 million was driven by continued outperformance in MSI (accounting for $41.2 million of the increase in core commissions and fees), the introduction of the Captive (accounting for $22.6 million of the increase in core commissions and fees), and building momentum in our Capacity Solutions group (accounting for $13.9 million of the increase in core commissions and fees). Total growth in our core commissions and fees includes the partnership contribution of $6.8 million, as well as the impact of the divestiture of our Wholesale Business in the first quarter of 2024 of $(5.5) million. In addition, profit sharing and other increased $4.3 million in 2025. Core commissions and fees growth, excluding amounts related to the Wholesale Business during 2024, was 17%.

66

Colleague Compensation and Benefits

Colleague compensation and benefits expense for UCTS increased $15.0 million, or 15%, year over year. Partnership activity contributed $6.4 million to the increase in colleague compensation and benefits in 2025, offset in part by a $1.4 million decrease related to the divestiture of our Wholesale Business during 2024. After excluding colleague compensation and benefits expense related to partnership and divestiture activity, colleague compensation and benefits increased $10.0 million, or 10%, as a result of the continued investment in UCTS' growth and elevated health plan costs.

Outside Commissions

Outside commissions for UCTS consist of outside commissions paid to partners that distribute our MGA products. Outside commissions for UCTS increased $4.7 million, or 2%, year over year. After excluding outside commissions of $3.0 million attributable to the Wholesale Business during 2024 for which there was no comparable expense in 2025, outside commissions for UCTS increased $7.7 million, or 3%. Outside commissions for 2025 increased at a lower rate than core commissions and fees due to continued scaling of the business, product mix shift and increased contributions from the Capacity Solutions group (which generally does not have significant outside commissions).

Other Operating Expenses

Other operating expenses for UCTS increased $34.1 million year over year, driven by higher incurred losses and LAE of $19.1 million related to our newly established Captive business, professional fees of $4.4 million due to partnership activity and fees related to the setup of the Reciprocal, advertising and marketing of $1.8 million due to growth in the business, licenses and taxes of $1.7 million and technology and software-related costs of $1.5 million.

Amortization Expense

Amortization expense for UCTS increased $6.2 million year over year, driven by an increase in capitalized software and our 2025 partnership activity.

Change in Fair Value of Contingent Consideration

The change in fair value of contingent consideration for UCTS was a $1.4 million gain for the year ended December 31, 2025 compared to a $5.1 million loss for the same period of 2024. The fair value gain related to contingent consideration for the year ended December 31, 2025 was impacted by negative changes in revenue growth trends of certain UCTS partners.

Total Other Income (Expense), Net

Total other income (expense), net for UCTS decreased $34.5 million year over year, driven by a $35.1 million gain recorded during 2024 in connection with the sale of our Wholesale Business.

67

MAINSTREET INSURANCE SOLUTIONS OPERATING GROUP RESULTS

MIS offers personal insurance, commercial insurance, and life and health solutions to individuals and businesses in their communities, with a focus on accessing clients via sheltered distribution channels, which include, but are not limited to, new home builders, realtors, mortgage originators/lenders, master planned communities, and various other community centers of influence. MIS also offers consultation for government assistance programs and solutions, including traditional Medicare, Medicare Advantage and Affordable Care Act, to seniors and eligible individuals through a network of primarily independent contractor agents.

For the Years

Ended December 31,

Variance

(in thousands, except percentages)

2025

2024

Amount

%

Revenues:

Core commissions and fees

$

265,283 

$

250,825 

$

14,458 

6 

%

Profit-sharing and other income

32,265 

30,423 

1,842 

6 

%

Commissions and fees

297,548 

281,248 

16,300 

6 

%

Investment income

199 

35 

164 

n/m

Total revenues

297,747 

281,283 

16,464 

6 

%

Operating expenses:

Colleague compensation and benefits

104,707 

98,374 

6,333 

6 

%

Outside commissions

74,802 

77,782 

(2,980)

(4)

%

Other operating expenses

39,167 

35,593 

3,574 

10 

%

Amortization expense

41,078 

26,452 

14,626 

55 

%

Change in fair value of contingent consideration

1,455 

424 

1,031 

n/m

Depreciation expense

732 

715 

17 

2 

%

Total operating expenses

261,941 

239,340 

22,601 

9 

%

Operating income

35,806 

41,943 

(6,137)

(15)

%

Total other expense, net

(593)

(15)

(578)

n/m

Income before income taxes and share of net earnings of equity method investee

$

35,213 

$

41,928 

$

(6,715)

(16)

%

__________

n/m    not meaningful

Commissions and Fees

MIS generates (i) commissions for placing insurance policies on behalf of its insurance company partners; (ii) profit-sharing income based on either the underlying book of business or performance, such as loss ratios; and (iii) commissions and fees in the form of marketing income, which is earned through co-branded marketing campaigns with our insurance company partners.

MIS commissions and fees increased $16.3 million, or 6%, year over year to $297.5 million. MIS core commissions and fees grew $14.5 million in total resulting from the recently acquired Hippo’s Homebuilder Distribution Network (accounting for $15.8 million of the increase in core commissions and fees), our national mortgage and real estate channel (accounting for $2.6 million of the increase in core commissions and fees), our Westwood business (accounting for $1.5 million of the increase in core commissions and fees), and our legacy Mainstreet business (accounting for $0.8 million of the increase in core commissions and fees), partially offset by lower core commissions and fees from our Medicare business of $5.0 million. Overall growth in MIS core commissions and fees was negatively impacted by headwinds in the health business and continued pressure in our legacy Mainstreet business. MIS profit-sharing and other revenue increased $1.8 million driven by overall growth in the MIS business.

Effective May 1, 2025, we are receiving reduced commissions from QBE Insurance Corporation and its affiliates on the portion of our builder-sourced homeowners book of business we are in the process of migrating to the Reciprocal; a temporary headwind that is expected to persist through the first half of 2026 before reversing into a tailwind over time.

68

Colleague Compensation and Benefits

Colleague compensation and benefits expense for MIS increased $6.3 million, or 6%, year over year. After excluding colleague compensation and benefits expense of $1.8 million related to partnership activity, colleague compensation and benefits increased $4.5 million, which is in line with the prior year as a percentage of our core commissions and fees.

Other Operating Expenses

Other operating expenses for MIS increased $3.6 million year over year, driven by higher legal settlement expense and rent expense of $0.7 million each, and technology-related costs and professional fees of $0.6 million each.

Amortization Expense

MIS amortization expense increased $14.6 million year over year, driven by our 2025 partnership activity and an increase in capitalized software.

CORPORATE AND OTHER RESULTS

For the Years

Ended December 31,

Variance

(in thousands, except percentages)

2025

2024

Amount

%

Revenues:

Commissions and fees

$

(71,432)

$

(79,166)

$

7,734 

(10)

%

Investment income

1,793 

2,045 

(252)

(12)

%

Total revenues

(69,639)

(77,121)

7,482 

(10)

%

Operating expenses:

Colleague compensation and benefits

46,292 

38,962 

7,330 

19 

%

Outside commissions

(71,432)

(79,166)

7,734 

(10)

%

Other operating expenses

39,599 

36,137 

3,462 

10 

%

Amortization expense

2,422 

1,106 

1,316 

119 

%

Depreciation expense

3,871 

3,426 

445 

13 

%

Total operating expenses

20,752 

465 

20,287 

n/m

Operating loss

(90,391)

(77,586)

(12,805)

17 

%

Other income (expense):

Interest expense, net

(120,975)

(123,642)

2,667 

(2)

%

Loss on divestitures

(1,611)

— 

(1,611)

— 

%

Loss on extinguishment and modification of debt

(6,226)

(15,113)

8,887 

(59)

%

Other income (expense), net

1,446 

(507)

1,953 

n/m

Total other expense, net

(127,366)

(139,262)

11,896 

(9)

%

Loss before income taxes and share of net earnings of equity method investee

$

(217,757)

$

(216,848)

$

(909)

— 

%

__________

n/m    not meaningful

Commissions and Fees

Corporate and Other records the elimination of intercompany commission revenue from the operating groups. During 2025, IAS recorded commission revenue shared with other operating groups of $0.4 million and UCTS recorded commission revenue shared with other operating groups of $71.1 million.

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Colleague Compensation and Benefits

Colleague compensation and benefits expense in Corporate and Other increased $7.3 million year over year, driven by an increase in colleague compensation in IT to support our continued growth and technology investments, as well as elevated health plan costs.

Outside Commissions

Outside commissions for Corporate and Other results from the elimination of intercompany commission expense from the operating groups.

Other Operating Expenses

Other operating expenses in Corporate and Other increased $3.5 million year over year primarily due to higher professional fees of $3.8 million due to partnership activity.

Interest Expense, Net

Interest expense, net, in Corporate and Other decreased $2.7 million year over year as a result of lower average interest rates due to the 2025 Refinancings and federal rate reductions, offset in part by higher average borrowings. We expect interest expense to grow in the near term on a year-over-year basis due to higher borrowings under the JPM Credit Facility to fund partnership opportunities and the settlement of deferred payment obligations, offset slightly by lower expected interest rates.

Loss on Extinguishment and Modification of Debt

Loss on extinguishment and modification of debt in Corporate and Other of $6.2 million for year ended December 31, 2025 relates to the 2025 Refinancings. Loss on extinguishment and modification of debt of $15.1 million for the same period of 2024 relates to the JPM Credit Facility refinancing completed in May 2024.

LIQUIDITY AND CAPITAL RESOURCES

Our primary liquidity needs for the foreseeable future will include cash to (i) provide capital to facilitate the organic growth of our business and to fund future partnerships, (ii) pay operating expenses, including cash compensation to our colleagues and expenses related to being a public company, (iii) make payments under the Tax Receivable Agreement, (iv) pay interest and principal due on borrowings under the JPM Credit Facility and Senior Secured Notes, (v) pay contingent earnout liabilities, (vi) pay income taxes, and (vii) fund potential investments in third party businesses that support the growth of our business, which may include sponsorship of, and a minority, non-controlling interest in, other investment funds, the purpose of which may include facilitating the establishment of additional and alternative capacity that supports the growth of our MSI business.

We have historically financed our operations and funded our debt service through the sale of our insurance products and services, and we have financed significant cash needs to fund growth through the acquisition of partners through debt and equity financing.

As of December 31, 2025, the JPM Credit Agreement provides for senior secured credit facilities in an aggregate principal amount of $1.606 billion, which consisted of (i) a term loan facility in the principal amount of $1.006 billion, bearing interest at a rate of term SOFR, plus an applicable margin of 250 bps, maturing May 24, 2031 (the loans thereunder, the “Term Loans”) and (ii) a revolving credit facility with commitments in an aggregate principal amount of $600.0 million, bearing interest at term SOFR plus 185 bps to term SOFR plus 260 bps based on total net leverage ratio, maturing May 24, 2029 (the “Revolving Facility”). As of December 31, 2025, we had $107.0 million outstanding under our Revolving Facility and $16.0 million of undrawn letters of credit issued thereunder.

As of December 31, 2025, Baldwin Holdings also had $600.0 million outstanding of 7.125% Senior Secured Notes due May 15, 2031. Refer to Note 12 to our consolidated financial statements included in Part II, Item 8. Financial Statements and Supplementary Data of this report for more information relating to the terms of the Senior Secured Notes and JPM Credit Facility.

On January 2, 2026, the Company entered into Amendment No. 4 to the JPM Credit Agreement (the “January 2026 Refinancing”) to provide for $600.0 million of incremental term B loans (the “Incremental Term Loans”), increasing the aggregate principal amount of outstanding term loans under the JPM Credit Agreement to approximately $1.604 billion. The Company has used, and intends to use, the net proceeds for cash consideration in connection with partnership opportunities, to pay down outstanding borrowings under the Revolving Facility, and any remaining proceeds for general corporate purposes.

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During September 2025, we entered into a floating-to-fixed interest rate swap agreement with a notional amount of $500.0 million, which exchanges the variable rate of the Term Loans, which are indexed to 1-month term SOFR, for a fixed rate of 3.244%. Interest payments will be made on a monthly basis commencing on October 14, 2025 through the termination date of September 14, 2028. The objective of the swap, for which we elected hedge accounting, is to manage our exposure to interest rate risk by converting a portion of the floating rate cash flows of the Term Loans into fixed rate payments.

In the near term, we intend to fund our earnout obligations with cash and cash equivalents, including unused proceeds from the issuance of the Incremental Term Loans, cash flow from operations and available borrowings under the Revolving Facility. From time to time, we will consider raising additional debt or equity financing if and as necessary to support our growth, including in connection with the exploration of partnership opportunities or to refinance existing obligations on an opportunistic basis.

In addition, we continue to evaluate our capital structure and current market conditions related to our capital structure. In addition to exploring partnership or refinancing opportunities, our Board of Directors has authorized the repurchase of up to $250 million of our outstanding common stock, pursuant to which we may repurchase our common stock in open market or privately negotiated transactions. Refer to Item 9B. Other Information for more information regarding the repurchase program. We have broad discretion over the deployment of our capital and these initiatives may not be successful or could limit our liquidity otherwise available.

As of December 31, 2025, our cash and cash equivalents were $123.7 million and we had $477.0 million of available borrowing capacity on the Revolving Facility. We believe that our cash and cash equivalents, cash flow from operations and available borrowings will be sufficient to fund our working capital and meet our commitments for the next 12 months and beyond.

See Item 1A. “Risk Factors—Risks Relating to our Business Operations and Industry—Partnerships have been, and may in the future continue to be, important to our growth. We may not be able to successfully identify and acquire partners or integrate partners into our company, and we may become subject to certain liabilities assumed or incurred in connection with our partnerships that could harm our business, results of operations and financial condition.”

Contractual Obligations and Commitments

The following table represents our contractual obligations and commitments, aggregated by type, at December 31, 2025:

Payments Due by Period

(in thousands)

Total

Less than

1 year

1-3 years

3-5 years

More than

5 years

Operating leases(1)

$

85,889 

$

21,723 

$

36,953 

$

22,182 

$

5,031 

Debt obligations payable(2)

2,298,087 

124,499 

242,080 

335,452 

1,596,056 

Undiscounted estimated contingent earnout obligations(3)

26,594 

8,814 

14,571 

1,680 

1,529 

USF Grant

2,496 

864 

1,632 

— 

— 

Total

$

2,413,066 

$

155,900 

$

295,236 

$

359,314 

$

1,602,616 

__________

(1)    Represents noncancelable operating leases for our facilities. Operating lease expense was $20.8 million and $21.5 million for the years ended December 31, 2025 and 2024, respectively.

(2)    Represents scheduled debt obligation and estimated interest payments for our Senior Secured Notes, Term Loans and the Revolving Facility.

(3)    Represents the total expected future payments to be made to partners and colleagues for earnout-related obligations at December 31, 2025.

Our contractual obligations and commitments are comprised of operating lease obligations, principal and interest payments on our borrowings under the Senior Secured Notes, Term Loans and Revolving Facility, estimated payments of contingent earnout liabilities and our commitment to the University of South Florida (“USF”).

Our operating lease obligations represent noncancelable agreements for our corporate headquarters and office space for our insurance brokerage business. Our operating lease agreements expire through August 2035. These obligations do not include leases with an initial term of 12 months or less, which are expensed as incurred. We may extend, terminate or otherwise modify or sub-lease facilities as needed to best suit the needs of our business. The lease term is the non-cancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised.

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Our debt obligations at December 31, 2025 include borrowings outstanding under the Senior Secured Notes of $600.0 million, the Term Loan of $1.004 billion and the Revolving Facility of $107.0 million. Estimated interest payments for outstanding borrowings under the Senior Secured Notes, Term Loans, and Revolving Facility in the table above were calculated based on the applicable interest rates at December 31, 2025 of 7.125%, 6.25%, and 6.39%, respectively, through their respective maturity dates of May 15, 2031, May 24, 2031, and May 24, 2029.

Substantially all of our partnerships and certain acquisitions of select books of business that do not constitute a complete business enterprise include contractual earnout provisions. We record an estimation of the fair value of the contingent earnout obligations at the partnership date as a component of the consideration paid. Our contingent earnout obligations are measured at fair value each reporting period based on the present value of the expected future payments to be made to partners in accordance with the provisions outlined in the respective purchase agreements. The recorded obligations are based on estimates of the partners’ future performance using financial projections for the earnout period. The aggregate estimated contingent earnout liabilities included on our condensed consolidated balance sheet of $23.3 million at December 31, 2025 includes $9.2 million that must be settled in cash and the remaining $14.1 million can be settled in cash or stock at our option. The undiscounted estimated contingent earnout obligation presented in the table above represents the total expected future payments to be made to the partners. The undiscounted estimated contingent earnout obligation of $26.6 million at December 31, 2025 includes $9.2 million that must be settled in cash and the remaining $17.4 million can be settled in cash or stock at our option. The maximum estimated exposure to the contingent earnout liabilities was $50.0 million at December 31, 2025. In January 2026, the Company completed additional partnerships that give rise to additional potential contingent earnout obligations based on varying metrics. For example, in connection with the CAC Group Transaction, we may be obligated to pay up to $250.0 million of contingent consideration payable in cash in accordance with the terms of the post-closing earnout based upon achievement of certain net commission and fee thresholds.

As of December 31, 2025, we have a remaining commitment to USF to donate $2.5 million through October 2028. The gift will provide support for the School of Risk Management and Insurance in the USF Muma College of Business. It is currently anticipated that Lowry Baldwin, the Company's Chairman, will fund half of this commitment.

Effects of Inflation

Certain of our lease agreements feature annual rent escalations either fixed or based on a consumer price index or other index, which, historically, have not had a material impact on our results of operations, including our results of operations for the years ended December 31, 2025, 2024 and 2023. Although we have recently sustained high levels of inflation, we do not anticipate the inflation rates for 2026 to have a material impact on our results of operations. We have monitored and will continue to monitor the components of compensation costs and operating expenses for the potential impact of inflation.

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 consolidated financial statements except for those described under this Liquidity and Capital Resources section.

Dividend Policy

Assuming Baldwin Holdings makes distributions to its members in any given year, the determination to pay dividends, if any, to our Class A common stockholders out of the portion, if any, of such distributions remaining after our payment of taxes, Tax Receivable Agreement payments and expenses (any such portion, an “excess distribution”) will be made at the sole discretion of our board of directors. Our board of directors may change our dividend policy at any time. Refer to Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividend Policy for additional information.

Tax Receivable Agreement

Baldwin is a party to the Tax Receivable Agreement with Baldwin Holdings’ LLC Members that provides for the payment by Baldwin to Baldwin Holdings’ LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that Baldwin actually realizes as a result of (i) any increase in tax basis in Baldwin Holdings assets resulting from (a) previous acquisitions by Baldwin of LLC Units from Baldwin Holdings’ LLC Members, (b) the acquisition of LLC Units from Baldwin Holdings’ LLC Members using the net proceeds from any future offering, (c) redemptions or exchanges by Baldwin Holdings’ LLC Members of LLC Units and the corresponding number of shares of Class B common stock for shares of Class A common stock or cash or (d) payments under the Tax Receivable Agreement, and (ii) tax benefits related to imputed interest resulting from payments made under the Tax Receivable Agreement.

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Holders of LLC Units (other than Baldwin) may, subject to certain conditions and transfer restrictions described above, redeem or exchange their LLC Units for shares of Class A common stock of Baldwin on a one-for-one basis. Baldwin Holdings intends to make an election under Section 754 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”) effective for each taxable year in which a redemption or exchange of LLC Units for shares of Class A common stock occurs, which is expected to result in increases to the tax basis of the assets of Baldwin Holdings at the time of a redemption or exchange of LLC Units. The redemptions or exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Baldwin Holdings. These increases in tax basis may reduce the amount of tax that Baldwin would otherwise be required to pay in the future. The Tax Receivable Agreement with Baldwin Holdings’ LLC Members provides for the payment by us to Baldwin Holdings’ LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that Baldwin actually realizes as a result of the transactions listed in the preceding paragraph. This payment obligation is an obligation of Baldwin and not of Baldwin Holdings. For purposes of the Tax Receivable Agreement, the cash tax savings in income tax will be computed by comparing the actual income tax liability of Baldwin (calculated with certain assumptions) to the amount of such taxes that Baldwin would have been required to pay had there been no increase to the tax basis of the assets of Baldwin Holdings as a result of the redemptions or exchanges and had Baldwin not entered into the Tax Receivable Agreement. Estimating the amount of payments that may be made under the Tax Receivable Agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of redemptions or exchanges, the price of shares of our Class A common stock at the time of the redemption or exchange, the extent to which such redemptions or exchanges are taxable, the amount and timing of our income, the tax rates then applicable and the portion of our payments under the Tax Receivable Agreement constituting imputed interest. We account for the effects of these increases in tax basis and associated payments under the Tax Receivable Agreement arising from future redemptions or exchanges as follows:

•we record an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the redemption or exchange;

•to the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, we reduce the deferred tax asset with a valuation allowance; and

•we record 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the liability due under the Tax Receivable Agreement and the remaining 15% of the estimated realizable tax benefit as an increase to additional paid-in capital.

All of the effects of changes in any of our estimates after the date of the redemption or exchange will be included in net income. Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income.

During 2025, we exchanged 2,848,868 LLC Units of Baldwin Holdings on a one-for-one basis for shares of Class A common stock and cancelled the corresponding shares of Class B common stock. We receive an increase in our share of the tax basis in the net assets of Baldwin Holdings due to the interests being redeemed. We have assessed the realizability of the net deferred tax assets and in that analysis have considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. We have recorded a full valuation allowance against the deferred tax assets at Baldwin as of December 31, 2025, which will be maintained until there is sufficient evidence to support the reversal of all or some portion of these allowances.

As of December 31, 2025 and 2024, we have recorded a Tax Receivable Agreement liability of $4.5 million and $4.8 million, respectively, associated with the payments to be made to current or former Baldwin Holdings’ LLC Members subject to the Tax Receivable Agreement.

Deferred Tax Assets

To determine the realizability of our deferred tax assets, we analyzed all evidence – both positive and negative. This includes, but is not limited to, history and/or projections of future earnings, future reversals of existing temporary tax differences and tax planning strategies. The Company has a history of cumulative losses over a three-year period (2023, 2024 and 2025), which indicates significant negative evidence. Based on the weight of evidence, the Company has determined that its deferred tax assets are not more likely than not to be realized. Accordingly, we maintain a full valuation allowance against our deferred tax assets. As the Company emerges from its cumulative loss position, we will reassess the realizability of our deferred tax assets and the necessity for a full valuation allowance.

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Sources and Uses of Cash

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

For the Years

Ended December 31,

Variance

(in thousands)

2025

2024

Net cash provided by (used in) operating activities

$

(29,418)

$

51,453 

$

(80,871)

Net cash provided by (used in) investing activities

(140,276)

13,299 

(153,575)

Net cash provided by financing activities

203,822 

21,054 

182,768 

Net increase in cash and cash equivalents and fiduciary cash

34,128 

85,806 

(51,678)

Cash and cash equivalents and fiduciary cash at beginning of period

312,769 

226,963 

85,806 

Cash and cash equivalents and fiduciary cash at end of period

$

346,897 

$

312,769 

$

34,128 

Operating Activities

The primary sources and uses of cash for operating activities are net loss adjusted for non-cash items and changes in assets and liabilities, or operating working capital, and payment of contingent earnout consideration. Net cash used in operating activities increased $80.9 million year over year, primarily as a result of a $62.4 million increase in payments of contingent earnout consideration in excess of purchase price accrual.

Investing Activities

The primary sources and uses of cash for investing activities relate to cash consideration paid to fund partnerships, proceeds from divested assets, and other investments to grow our business. Net cash used in investing activities increased $153.6 million year over year, driven by an increase in cash consideration paid for partnership activity of $85.7 million, a decrease in cash proceeds from divestitures, net of cash transferred of $55.1 million, relating primarily to the sale of our Wholesale Business during 2024, and an increase in investments in and loans to business ventures, net of repayments of $14.3 million related to our investment in the Reciprocal in 2025.

Financing Activities

The primary sources and uses of cash for financing activities relate to the issuance of our Class A common stock, debt servicing costs in connection with our long-term debt and revolving line of credit, payment of contingent earnout consideration, and other equity transactions. Net cash provided by financing activities increased $182.8 million year over year driven by an increase in net proceeds from borrowings on our credit facilities of $196.6 million primarily resulting from the 2025 Refinancings and borrowings on the Revolving Facility to fund partnerships and the payment of our earnout obligations during 2025, and a decrease in payments of contingent earnout consideration of $32.5 million. This increase was partially offset by a decrease in cash of $50.2 million related to the change in fiduciary receivables and liabilities.

RECENT ACCOUNTING PRONOUNCEMENTS

Please refer to Note 1 to our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K for a discussion of recent accounting pronouncements that may impact us.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements are prepared in accordance with GAAP, which requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on historical experience, known or expected trends, independent valuations and other factors we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Our most critical accounting policies and estimates, as discussed below, govern the more significant judgments and estimates used in the preparation of our consolidated financial statements and could have a material impact on our financial condition or results of operations.

Critical Accounting Policies

Revenue Recognition

Commission revenue is earned at a point in time upon the effective date of bound insurance coverage, as no performance obligation exists after coverage is bound. The Company makes its best estimate of direct bill commissions at the policy effective date, particularly in employee benefits within IAS, which is subject to change based on enrollment and other factors over the policy period.

Commission revenue is recorded net of an allowance for estimated policy cancellations. The allowance for estimated policy cancellations is determined based on an evaluation of historical and current cancellation data.

Medicare contracts in MIS are multi-year arrangements in which we are entitled to renewal commissions. However, we have applied a constraint to renewal commissions that limits revenue recognized when a risk of significant reversals exists based on: (i) historical renewal patterns; and (ii) the influence of external factors outside of our control, including policyholder discretion over plans and insurance company partner relationship, political influence, and a contractual provision, which limits our right to receive renewal commissions to ongoing compliance and regulatory approval of the relevant insurance company partner and compliance with the Centers for Medicare and Medicaid Services.

Profit-sharing commissions represent a form of variable consideration, which includes additional commissions over base commissions received from insurance company partners. A constraint of variable consideration is necessary when commissions and fees are subject to significant reversal. Profit-sharing commissions associated with loss performance are uncertain, and therefore, are subject to significant reversal as loss data remains subject to material change. Management estimates profit-sharing commissions using historical outcomes and known trends impacting premium volume or loss ratios, subject to a constraint. The constraint is relieved when management estimates commissions and fees that are not subject to significant reversal, which often coincides with the earlier of written notification from the insurance company partner that the target has been achieved or cash collection. Year-end amounts incorporate estimates subject to a constraint or where applicable, are based on confirmation from insurance company partners after calculation of premium volume or loss ratios that are impacted by catastrophic losses.

Costs to obtain contracts include compensation in the form of producer commissions paid on new business. These incremental costs are capitalized as deferred commission expense and amortized over five years, which represents management’s estimate of the average period over which a client maintains its initial coverage relationship with the original insurance company partner.

The nature of estimates used in recognizing commissions and fees revenue do not involve a significant level of subjectivity, judgment, or estimation uncertainty that could have a material impact on the Company's results of operations.

Critical Accounting Estimates

We have determined that there are significant judgments and uncertainties included in the application of guidance for the valuation of acquired relationships, impairment of intangible assets and goodwill, valuation of contingent consideration and valuation allowance for deferred tax assets. The nature of the estimates and assumptions used and the impact the estimates and assumptions could have on our actual results are discussed in the tables below.

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Description

Judgments and Uncertainties

Effect if Actual Results Differ from Assumptions

Valuation of Acquired Relationships

We acquire significant intangible assets in connection with our strategic acquisitions of a business. The valuation of the acquired business includes determining the fair value of the assets acquired and liabilities assumed on the acquisition date. We anticipate that for most acquisitions, we will exercise significant judgment in estimating the fair value of intangible assets.

In a typical acquisition, acquired relationships are our most significant definite-lived intangible asset. In valuing these relationships, we engage a third-party valuation expert to fair value these assets using a version of the income approach known as the “excess earnings method.”

The excess earnings method uses a discounted cash flow approach that is derived from historical information, future revenue and operating profit margins, contributory asset charges, and the selection of an appropriate discount rate. We consider this approach the most appropriate valuation technique because the inherent value of these assets is their ability to generate current and future income.

Future revenue growth, future operating performance margin as a percentage of revenues, attrition rate, and discount rate applied are the significant assumptions used in the excess earnings method to determine the fair value of the relationships. These assumptions are influenced by many factors, including historical financial information, estimated retention rates, and management's expectations for future growth as a combined company.

Another estimate that impacts the valuation is the contributory charge for (i) the acquired workforce, which involves management assumptions based on historical experience, including interview time and new hire productivity, and (ii) the use of trade names or technology, which involves the selection of an appropriate royalty rate for the use of these intangible assets.

The estimated life is determined by calculating the number of years necessary to obtain 95% of the value of the discounted cash flows of the relationships and is directly tied to the accuracy of the above assumptions.

During the last three years, we have not made any changes in the accounting methodology used to value acquired relationships.

If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop the values of the identifiable intangible assets, then we could record material impairment losses.

With all other assumptions held constant, a 10% increase in the calculated fair value of the acquired relationships from Hippo’s Homebuilder Distribution Network would have increased our annualized amortization expense by $1.3 million in 2025.

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Description

Judgments and Uncertainties

Effect if Actual Results Differ from Assumptions

Impairment of Intangible Assets

We evaluate our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. These events and circumstances include, but are not limited to: higher than expected attrition for relationships; a current expectation that an intangible asset will be disposed of significantly before the end of its previously estimated useful life, such as when we classify a business as held for sale; or a significant adverse change in the extent or manner in which we use an intangible asset.

Undiscounted cash flow analyses are used to determine if impairment exists; if impairment is determined to exist, the loss is calculated based on estimated fair value.

Our impairment evaluations require us to apply judgment in determining whether a triggering event has occurred, including the evaluation of whether it is more-likely-than-not that an intangible asset will be disposed of significantly before the end of its previously estimated useful life. Incorrect estimation of useful lives may result in inaccurate amortization charges over future periods leading to future impairment.

Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.

During the last three years, we have not made any changes in the accounting methodology used to evaluate the impairment of intangible assets or to estimate the useful lives of our intangible assets.

At December 31, 2025, we had $978.4 million of intangible assets, which are recorded in each asset class at the following amounts:

Acquired relationships—$908.4 million

Software—$68.0 million

Trade Names—$2.1 million

We performed a qualitative analysis for each of our asset classes as of October 1, 2025 and determined that there were no events or changes in circumstances that had occurred to indicate that the carrying amount of our intangible assets may not be recoverable. The Company also determined there were no triggering events through December 31, 2025 that would cause the Company to perform an interim period analysis. We did not record impairment charges for intangible assets in 2025, 2024 or 2023.

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Description

Judgments and Uncertainties

Effect if Actual Results Differ from Assumptions

Impairment of Goodwill

Goodwill is not amortized but rather tested at least annually for impairment, or more often if events or changes in circumstances indicate it is more-likely-than-not that the carrying amount of the asset may not be recoverable. Goodwill is tested for impairment at the reporting unit level. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for some or all of our reporting units and instead perform a quantitative impairment test.

We estimate the fair value of each reporting unit using a combination of the income approach and the market approach.

The income approach incorporates the use of a discounted cash flow method in which the estimated future cash flows and terminal value are calculated for each reporting unit and then discounted to present value using an appropriate discount rate.

The market approach estimates fair value of a reporting unit by using market comparables for reasonably similar public companies.

Our impairment evaluations require us to apply judgment in determining whether a triggering event has occurred.

The valuation of our reporting units requires significant judgment in evaluation of recent indicators of market activity and estimated future cash flows, discount rates, and other factors. Our impairment analyses contain inherent uncertainties due to uncontrollable events that could positively or negatively impact anticipated future economic and operating conditions.

In making these estimates, the weighted-average cost of capital is utilized to calculate the present value of future cash flows and terminal value. Many variables go into estimating future cash flows, including estimates of our future revenue growth and operating results. When estimating our projected revenue growth and future operating results, we consider historical performance, industry trends, economic data, and our competitive advantage.

During the last three years, we have not made any changes in the accounting methodology used to evaluate impairment of goodwill.

At December 31, 2025, we had $1.5 billion of goodwill. Our goodwill is included in each of our operating groups at the following amounts:

Insurance Advisory Solutions—$932.5 million

Underwriting, Capacity & Technology Solutions—$241.9 million

Mainstreet Insurance Solutions—$342.8 million

On October 1, 2025, we performed an impairment evaluation for each of our reporting units beginning with a qualitative assessment. We determined that based on the overall results of the qualitative analysis and the outlook of our reporting units, company and industry, there was no indication of goodwill impairment. Therefore, no further testing was required. We did not record goodwill impairment charges during 2025, 2024 or 2023.

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Description

Judgments and Uncertainties

Effect if Actual Results Differ from Assumptions

Valuation of Contingent Consideration

Substantially all of our partnerships and certain acquisitions of select books of business that do not constitute a complete business enterprise include contingent consideration arrangements, which are based on the acquired company achieving thresholds related to future revenues, EBITDA or retention rates. The structure of these contingent earnout arrangements can reduce the risk of overpaying for acquisitions if the projected financial results are not achieved.

The fair values of these contingent consideration arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earnout payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability on the consolidated balance sheets. The fair values of the earnout arrangements are estimated by discounting the expected future contingent payments to present value using a variation of the income approach, specifically using a Monte Carlo Simulation approach. We have five partners with a corresponding contingent consideration liability still outstanding at December 31, 2025.

The fair value of the contingent consideration arrangements is estimated by simulating the metrics corresponding to a payment using a Monte Carlo Simulation approach and discounting the expected future contingent payments to present value. The key assumptions used in our valuation were: (i) forecast of revenue, EBITDA or retention rates, (ii) the volatility associated with the revenues, EBITDA or retention rates, (iii) risk-adjusted discount rate applied to forecasted revenues, EBITDA or retention rates, and (iv) the credit-adjusted discount rate related to the payment of the contingent consideration.

These estimates are influenced by many factors, including historical financial information, guideline public company data, and management's expectations for future revenue, EBITDA or retention rates of the acquired businesses, as well as market conditions, economic conditions and the company’s performance. Changes in these inputs could have a significant impact on the fair value of the contingent consideration liability.

During the last three years, we have not made any changes in the accounting methodology used to value contingent consideration.

We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior quarterly amounts; however, the fair value of contingent consideration liabilities becomes less uncertain as partners approach their respective measurement dates. Any changes in the estimated fair value of contingent consideration and adjustments to the estimated fair value related to unobservable inputs will be recognized within change in fair value of contingent consideration in the consolidated statements of comprehensive loss. We recognized a $5.6 million expense related to the change in fair value of contingent consideration in 2025.

At December 31, 2025, we recorded $23.3 million of contingent consideration liabilities related to the five contingent consideration arrangements still outstanding and the total potential maximum of the remaining contingent consideration payments is $50.0 million. If all remaining revenue, EBITDA and retention rate targets were to be achieved, our partners would be entitled to payments of up to $39.0 million in calendar year 2026 for achieving targets through September 30, 2026; and $5.5 million in calendar year 2027 for achieving targets through September 30, 2027; and $5.5 million in calendar year 2028 for achieving targets through September 30, 2028. If the actual achievement of contingent consideration payments in 2026 through 2028 was at the maximum target amounts, we would record an additional $26.7 million of expense over the next three years. This analysis does not take into account the assumed obligation from Hippo's Homebuilder Distribution Network, which does not have a maximum.

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Description

Judgments and Uncertainties

Effect if Actual Results Differ from Assumptions

Valuation Allowance for Deferred Tax Assets

We record a tax provision for the anticipated tax consequences of the reported results of operations. We compute the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. We measure deferred tax assets and liabilities using the currently enacted tax rates in each jurisdiction that applies to taxable income in effect for the years in which those tax assets are expected to be realized or settled.

We are required to establish a valuation allowance for deferred tax assets and record a charge to income if it is determined, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Our evaluation of the realizability of the deferred tax assets contains uncertainties because it requires management to make assumptions and to apply judgment to estimate future taxable income or loss. Many variables go into estimating future taxable income or loss, including estimates of our future revenue growth and management's expectations of ongoing investments. Our evaluation also requires management to consider significant, objective evidence to determine if it is more likely than not that we will be able to realize our deferred tax assets in the future. Considerations include recent results of operations, projected future taxable income, tax-planning strategies, potential changes in tax law and rates, and future reversals of existing taxable temporary differences.

During the last three years, we have not made any changes in the accounting methodology used to evaluate the realizability of the deferred tax assets.

We review and re-assess our cumulative three-year loss before income taxes on a quarterly basis. Deferred tax assets have been reduced by a full valuation allowance at December 31, 2025 due to a determination that it is more likely than not that all of the deferred tax assets will not be realized based on the weight of all available evidence.

If we had concluded that it was more likely than not that the full deferred tax assets will be realized, our valuation allowance would have been reversed and we would have recognized deferred tax assets of approximately $210.7 million, before indirect tax considerations, on our consolidated balance sheet at December 31, 2025.

If we did not have a valuation allowance established, we would have recognized an income tax benefit of approximately $13.7 million, before indirect tax considerations, for the year ended December 31, 2025.

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