Form type: 10-Q
Period end: 2026-06-30
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |
|---|---|---|---|---|
| Revenue | 87,511,000.00 | 60,308,000.00 | ||
| Total Revenue | ||||
| Total COGS | ||||
| Gross Profit | ||||
| Income tax expense (benefit) | 1,031,000.00 | 620,000.00 | ||
| Interest expense | 57,000.00 | 68,000.00 | ||
| Interest income | -759,000.00 | -1,751,000.00 | ||
| Net income attributable to noncontrolling interests | 14,880,000.00 | 7,043,000.00 | ||
| Operating expenses | 69,924,000.00 | 52,945,000.00 | ||
| Other nonoperating income (expense), net | 7,000.00 | -574,000.00 | ||
| Total Expenses | ||||
| Net Income | ||||
| Net income (loss) available to common stockholders | ||||
| Basic earnings per share |
| June 30, 2026 | December 31, 2025 | |
|---|---|---|
| Assets | ||
| Accounts receivable | 14,241,000.00 | 7,469,000.00 |
| Cash and cash equivalents | 73,745,000.00 | 155,926,000.00 |
| Intangible assets, net | 178,744,000.00 | 138,632,000.00 |
| Operating lease right-of-use assets | 4,648,000.00 | 4,189,000.00 |
| Other assets (derived) | 46,826,000.00 | 37,322,000.00 |
| Other current assets | 16,703,000.00 | 12,827,000.00 |
| Other noncurrent assets | 635,000.00 | 689,000.00 |
| Property, plant and equipment | 3,806,000.00 | 3,307,000.00 |
| Restricted cash and equivalents | 19,006,000.00 | 11,974,000.00 |
| Total Assets | ||
| Liabilities | ||
| Accounts payable | 4,592,000.00 | 1,571,000.00 |
| Accrued compensation | 2,166,000.00 | 2,529,000.00 |
| Debt, current | 2,003,000.00 | 1,972,000.00 |
| Long-term debt | 1,025,000.00 | 2,035,000.00 |
| Operating lease liabilities, current | 1,225,000.00 | 1,320,000.00 |
| Operating lease liabilities, noncurrent | 3,388,000.00 | 2,897,000.00 |
| Other current liabilities | 13,026,000.00 | 10,308,000.00 |
| Other liabilities (derived) | 43,253,000.00 | 32,002,000.00 |
| Taxes payable | 647,000.00 | 1,051,000.00 |
| Total Liabilities | ||
| Temporary equity | ||
| Redeemable noncontrolling interests | 23,194,000.00 | 17,901,000.00 |
| Total temporary equity | ||
| Equity | ||
| Stockholders equity | 46,151,000.00 | 83,382,000.00 |
| Total stockholders equity attributable to parent | ||
| Noncontrolling interests | 217,684,000.00 | 215,367,000.00 |
| Total Equity | ||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | 4,128,000.00 | 3,295,000.00 |
| Depreciation and amortization | 13,234,000.00 | 7,260,000.00 |
| Stock-based compensation | 2,022,000.00 | 2,719,000.00 |
| Changes in operating assets and liabilities, net | 13,153,000.00 | 11,986,000.00 |
| Net cash from operating activities | ||
| Investing activities | ||
| Investing activities, net | -53,330,000.00 | -46,706,000.00 |
| Net cash from investing activities | - | - |
| Financing activities | ||
| Financing activities, net | -54,356,000.00 | -12,876,000.00 |
| Net cash from financing activities | - | - |
| Net change in cash | - | - |
| Cash at beginning of period | 205,323,000.00 | |
| Cash at end of period | 171,001,000.00 | |
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |
|---|---|---|
| Balance at beginning of period | 298,749,000.00 | 275,286,000.00 |
| Net income | 4,128,000.00 | 3,295,000.00 |
| Other equity movements | -39,042,000.00 | 629,000.00 |
| Balance at end of period | 263,835,000.00 | 279,210,000.00 |
TWFG, Inc. is a public reporting company classified under Insurance Agents, Brokers & Service. The accompanying condensed financial statements have been prepared by the Company from its books and records and are unaudited; in the opinion of management, they include all adjustments necessary for a fair presentation of the Company's financial position and results of operations for the interim periods presented, and results for the interim period are not necessarily indicative of the results to be expected for the full fiscal year. The condensed financial statements are presented as of and for the period ended June 30, 2026.
Revenue for the current period was $87,511,000, compared with $60,308,000 in the prior period, an increase of 45.1%. Operating expenses were $69,924,000 in the current period, compared with $52,945,000 in the prior period, an increase of 32.1%, and income tax expense was $1,031,000, compared with $620,000 in the prior period. Net income for the period was $2,371,000. Net income attributable to noncontrolling interests was $14,880,000, compared with $7,043,000 in the prior period. Basic earnings per share was $0.18 for the period, based on weighted-average basic shares outstanding of 13,096,390.
As of June 30, 2026, the Company carried current debt of $2,003,000 and long-term debt of $1,025,000, while the $6,392,000 of debt outstanding in the prior period had been reduced to zero. Interest expense was $57,000 for the current period, compared with $68,000 in the prior period, a decrease of 16.2%. In connection with the IPO, TWFG Holding used a portion of the proceeds it received from the sale of LLC Units to repay in full the outstanding debt under the Revolving Facility in the amount of $41.0 million, which further reduced exposure to interest rate fluctuations on borrowed funds. The Company leases certain assets under operating leases; operating lease right-of-use assets were $4,648,000 at period end, compared with $4,381,000 in the prior period. Related operating lease liabilities consisted of a current portion of $1,225,000 and a noncurrent portion of $3,388,000 as of June 30, 2026.
Stockholders' equity was $46,151,000 as of June 30, 2026, compared with $78,673,000 in the prior period, a decrease of 41.3%. Noncontrolling interests were $217,684,000 at period end, compared with $200,537,000 in the prior period, and redeemable noncontrolling interests were $23,194,000, compared with $9,761,000 in the prior period. Total equity, inclusive of noncontrolling interests, was $263,835,000 as of June 30, 2026.
| Current | Prior | |
|---|---|---|
| Debt, current | 2,003,000.00 | 1,972,000.00 |
| Long-term debt | 1,025,000.00 | 2,035,000.00 |
| Operating lease liabilities, current | 1,225,000.00 | 1,320,000.00 |
| Operating lease liabilities, noncurrent | 3,388,000.00 | 2,897,000.00 |
| Total debt | 7,641,000.00 | 8,224,000.00 |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | 3,806,000.00 | 3,307,000.00 |
| Total property and equipment | 3,806,000.00 | 3,307,000.00 |
| Current | Prior | |
|---|---|---|
| Stockholders equity | 46,151,000.00 | 83,382,000.00 |
| Total stockholders' equity | 46,151,000.00 | 83,382,000.00 |
TWFG, Inc. is a public reporting company classified under Insurance Agents, Brokers & Service. Revenue for the current period was $87,511,000, an increase of 45.1% from $60,308,000 in the comparable prior-year period. [COMPLETE: description of the specific business drivers of revenue growth] Operating expenses increased 32.1% to $69,924,000 from $52,945,000, and compensation-related accruals also grew, with accrued compensation up 19.1% to $2,166,000 from $1,819,000. Income tax expense increased 66.3% to $1,031,000 from $620,000, reflecting higher pre-tax earnings. Net income for the period was $2,371,000, or $0.18 per basic share based on weighted-average basic shares outstanding of 13,096,390. Net income attributable to noncontrolling interests increased 111.3% to $14,880,000 from $7,043,000.
Interest expense declined 16.2% to $57,000 from $68,000, while interest income decreased 56.7% to $759,000 from $1,751,000, primarily reflecting lower average cash balances during the period. Other nonoperating items shifted from net income of $574,000 in the prior-year period to a net expense of $7,000 in the current period. Accounts receivable increased 52.3% to $14,241,000 from $9,353,000, consistent with the growth in revenue, and accounts payable increased 100.1% to $4,592,000 from $2,295,000.
Cash and cash equivalents were $73,745,000 at period end, a decrease of 53.9% from $159,827,000 in the prior-year period, while restricted cash and equivalents increased 70.1% to $19,006,000 from $11,174,000. The decline in cash primarily reflects deployment of capital into the business, including growth in intangible assets, net, to $178,744,000 from $125,901,000, an increase of 42.0%, growth in other current assets to $16,703,000 from $2,937,000, and growth in other assets to $46,826,000 from $25,234,000. Our prior debt balance of $6,392,000 was fully repaid, and at period end debt consisted of $2,003,000 of current debt and $1,025,000 of long-term debt. Outstanding debt totaled $71,325,000 at period end, and management is not aware of any covenant violations during the period. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. Management believes that our cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations and capital requirements for at least the next twelve months.
Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments. The company's primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. As of June 30, 2026, we held cash and cash equivalents of $73.7 million, compared to $159.8 million as of the prior period, as well as restricted cash and equivalents of $19.0 million, compared to $11.2 million as of the prior period. Because these balances are held primarily in interest-bearing instruments, changes in prevailing interest rates affect the amount of interest income we earn. Interest income for the period was $0.8 million, compared to $1.8 million in the prior period, reflecting a decrease of approximately 56.7%, driven in part by the lower average cash balances held during the period. A hypothetical change in interest rates would impact our interest income; the estimated effect of such a change is [COMPLETE: quantified sensitivity analysis of a hypothetical change in interest rates on interest income].
Our exposure to interest rate risk on outstanding borrowings is limited. As of June 30, 2026, we had current debt of $2.0 million and long-term debt of $1.0 million, and the $6.4 million of debt outstanding as of the prior period had been eliminated. In connection with our IPO and the Reorganization Transactions, TWFG Holding used a portion of the proceeds it received from the sale of LLC Units to repay in full outstanding debt under our Revolving Facility in the amount of $41.0 million. Interest expense for the period was approximately $57,000, compared to $68,000 in the prior period. Given the modest level of our outstanding borrowings, we do not believe a hypothetical change in interest rates would have a material effect on our interest expense.
We do not have material foreign currency or commodity price exposure. Accordingly, we do not currently use derivative financial instruments to manage foreign currency or commodity price risk. We will continue to monitor our market risk exposures and may take actions in the future to mitigate any risks that become material to our financial condition or results of operations.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of June 30, 2026, the end of the period covered by this Quarterly Report. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective at the reasonable assurance level. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, have been detected.
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
[NOTE: Management's conclusion language above must be reviewed and adopted by management before filing.]
From time to time, TWFG, Inc. is involved in legal proceedings arising in the ordinary course of its business. These matters may include claims and disputes incidental to the operation of the company's insurance agency and brokerage activities. The outcome of litigation is inherently uncertain, and the company evaluates pending and threatened matters on an ongoing basis to assess their potential impact.
Management does not currently believe that any pending legal matter is material to the company's financial statements. Accordingly, no accrual or disclosure of specific proceedings beyond the foregoing is required for the period ended June 30, 2026. Should developments in any pending or future matter change this assessment, the company will provide updated disclosure in subsequent periodic reports as appropriate.
Our business and results of operations are subject to a number of risks and uncertainties, and investors should carefully consider the following factors in addition to the other information contained in this report. Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments, and changes in prevailing interest rates or in the level of our invested balances could adversely affect the income we earn on those assets. Interest income decreased to $759,000 from $1,751,000, reflecting lower average cash balances, and cash and cash equivalents were $73,745,000 at period end, a decrease of 53.9% from $159,827,000 in the prior-year period. If interest rates decline further or our cash balances continue to decrease, our nonoperating income could be reduced, which could negatively affect our results of operations.
Our recent growth has required significant deployment of capital, and we may not realize the expected returns on these investments. The decline in cash primarily reflects deployment of capital into the business, including growth in intangible assets, net, to $178,744,000 from $125,901,000, an increase of 42.0%, growth in other current assets to $16,703,000 from $2,937,000, and growth in other assets to $46,826,000 from $25,234,000. If acquired intangible assets do not generate anticipated revenue or become impaired, our operating results and financial condition could be adversely affected. In addition, revenue for the current period was $87,511,000, an increase of 45.1% from $60,308,000 in the prior-year period, and the growth in revenue was accompanied by an increase in accounts receivable to $14,241,000 from $9,353,000, up 52.3%; growth in receivables exposes us to increased credit and collection risk, and any failure to collect amounts owed to us on a timely basis could adversely affect our cash flows. A substantial portion of our earnings is also attributable to holders other than our stockholders, as net income attributable to noncontrolling interests increased 111.3% to $14,880,000 from $7,043,000, and stockholders equity declined 41.3% to $46,151,000 from $78,673,000, which may limit the earnings and equity value available to our common stockholders.
We are also subject to risks associated with our indebtedness and with litigation. Our prior debt balance of $6,392,000 was fully repaid, and at period end debt consisted of $2,003,000 of current debt and $1,025,000 of long-term debt; although management is not aware of any covenant violations during the period, any future inability to service or refinance our obligations could adversely affect our financial condition. We are involved in legal proceedings arising in the ordinary course of business from time to time, and while management does not currently believe any pending matter is material to the financial statements, the outcome of litigation is inherently uncertain and an adverse result in one or more matters could harm our business, results of operations, or reputation. [COMPLETE: statement regarding whether there have been material changes to the risk factors previously disclosed in the company's most recent Annual Report on Form 10-K.]
During the fiscal quarter ended June 30, 2026, the following disclosure is provided pursuant to Item 408(a) of Regulation S-K regarding the adoption or termination of Rule 10b5-1 trading arrangements and non-Rule 10b5-1 trading arrangements by directors and officers of TWFG, Inc. [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]