The financial outlook for FY25 has been revised by TWFG, with anticipated revenue reaching $244.32 million. The company has expressed increased confidence in its operational execution, following impressive results in the first quarter. Consequently, the guidance for full-year 2025 has been adjusted upwards across all essential metrics.
TWFG has raised expectations for organic revenue growth, which is now projected to be between 12% and 16%, compared to the previous range of 11% to 16%. Additionally, the forecast for the adjusted EBITDA margin has been improved to 20% to 22%, up from the earlier estimate of 19% to 21%.
TWFG Key Business Developments
Release Date: March 20, 2025
- Total Revenue (2024): $203.8 million, up 18.4% year-over-year.
- Organic Revenue Growth (2024): 14.5%.
- Adjusted EBITDA (2024): $45.3 million, up 44.7% year-over-year.
- Total Written Premium (2024): $1.5 billion, up 18.3% year-over-year.
- Retail Locations (2024): Expanded by 144 new locations, totaling 520 across 34 states.
- Fourth Quarter Revenue Growth: 30.8% year-over-year.
- Fourth Quarter Organic Revenue Growth: 20.5%.
- Adjusted EBITDA Margin (Q4 2024): 26.8%.
- Net Income (Q4 2024): $8.2 million, up 56.3% year-over-year.
- Adjusted Net Income (Q4 2024): $10.5 million, up 57.2% year-over-year.
- EBITDA (Q4 2024): $10.2 million.
- Adjusted EBITDA (Q4 2024): $13.8 million, up 91.7% year-over-year.
- Commission Income (Q4 2024): $43.7 million, up 20.7% year-over-year.
- Contingent Income (Q4 2024): $5 million, up 371% year-over-year.
- Fee Income (Q4 2024): $2.8 million, up 39.8% year-over-year.
- Salary and Employee Benefits (Q4 2024): $7.7 million, up 97.8% year-over-year.
- Other Administrative Expenses (Q4 2024): $5 million, up 69.9% year-over-year.
- Amortization and Depreciation (Q4 2024): $3.1 million, up 101% year-over-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TWFG Inc (TWFG, Financial) reported a strong revenue growth of 18.4% for 2024, reaching $203.8 million, with organic revenue growth of 14.5%.
- The company successfully completed its IPO in July 2024, raising $192.9 million, providing significant flexibility for growth through acquisitions and technology investments.
- TWFG expanded its national footprint by entering 15 new states and adding 144 new retail locations, totaling 520 retail locations across 34 states.
- Adjusted EBITDA increased by 44.7% to $45.3 million, demonstrating the scalability and operational efficiency of TWFG's platform.
- The company reported a 30.8% increase in total revenue for Q4 2024, driven by a 20.5% organic revenue growth and higher premium rates.
Negative Points
- TWFG faces challenges from the January 2025 wildfires in Los Angeles, impacting reinsurance pricing and market trends.
- Newly onboarded agencies are not yet contributing significantly to revenue or profitability, with a maturation period of two to three years expected.
- Public company costs, including professional fees and consulting services, increased administrative expenses by 69.9% over the prior-year period.
- The company anticipates a normalized adjusted EBITDA margin in 2025, reflecting increased public company expenses and a potential decrease in contingent commission income.
- TWFG's expansion into volatile markets like Florida and California presents risks due to ongoing capacity constraints and regulatory changes.
