Baldwin Insurance Group (BWIN) grows via $1.56B deals but posts Q1 loss
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
The Baldwin Insurance Group, Inc. reported strong top-line growth but a small net loss for the quarter ended March 31, 2026. Revenue rose to $532,235k from $413,405k a year earlier, driven mainly by higher commissions and fees across its Insurance Advisory, Underwriting & Capacity, and Mainstreet segments.
The company posted an operating loss of $101,266k and total other expense of $45,662k, largely from higher interest and acquisition-related amortization. A large income tax benefit of $144,521k, primarily from releasing a prior valuation allowance, reduced the net loss to $1,896k, with $2,341k of net income attributable to Baldwin shareholders.
Baldwin completed three sizeable acquisitions (CAC Group, Obie and Capstone) with total consideration of $1,564,486k, adding $1,134,619k of goodwill and $550,983k of intangible assets. To fund expansion, term loans increased to $1,600,000k and the revolving balance to $191,000k, while cash and cash equivalents rose to $146,409k and total assets to $5,942,628k.
Positive
- None.
Negative
- None.
Insights
Rapid acquisition-driven growth lifted revenue but increased leverage and non-cash charges, resulting in a small quarterly net loss.
Baldwin Insurance Group expanded aggressively, closing three deals (CAC Group, Obie, Capstone) for total consideration of $1,564,486k. These added substantial scale and capabilities, with goodwill rising to $2,652,131k and intangible assets to $1,484,739k, reshaping the balance sheet.
Quarterly revenue grew to $532,235k from $413,405k, but operating expenses climbed faster, including amortization of $55,047k and colleague compensation of $283,612k. Higher debt pushed net interest expense to $38,900k, contributing to a pre-tax loss of $146,417k.
A key development was the $144,521k income tax benefit from releasing most of a prior deferred tax valuation allowance after recognizing new deferred tax liabilities from acquisitions. Baldwin also recorded $144,570k of Tax Receivable Agreement liabilities. Term loans increased to $1,600,000k and Senior Secured Notes remained at $600,000k, so the capital structure now relies more heavily on debt funding, with future performance and cash generation critical to comfortably servicing interest and contingent earnout obligations over the period through 2031.
Key Figures
Total revenue: $532,235k
Total revenue prior year: $413,405k
Net income (loss): $(1,896)k
+5 more
8 metrics
Total revenue
$532,235k
For the three months ended March 31, 2026
Total revenue prior year
$413,405k
For the three months ended March 31, 2025
Net income (loss)
$(1,896)k
For the three months ended March 31, 2026
Net income attributable to Baldwin
$2,341k
For the three months ended March 31, 2026
Business combination consideration
$1,564,486k
Total for CAC Group, Obie and Capstone in Q1 2026
Long-term debt (carrying amount)
$2,197,068k
As of March 31, 2026, net of discounts and costs
Cash and cash equivalents
$146,409k
As of March 31, 2026
Income tax benefit
$144,521k
For the three months ended March 31, 2026
Key Terms
Incremental Term Loans, Tax Receivable Agreement, contingent earnout liabilities, variable interest entities, +2 more
6 terms
Incremental Term Loans financial
"Incremental Term Loans | $600 million of incremental term loans entered into January 2, 2026 pursuant to Amendment No. 4 to the JPM Credit Agreement"
Tax Receivable Agreement financial
"Tax Receivable Agreement | Tax Receivable Agreement between Baldwin and certain holders of LLC Units in Baldwin Holdings entered into on October 28, 2019"
A contract in which a company agrees to pay a specified party (often former owners after a spinoff or IPO) a share of future tax savings the company realizes. Think of it like agreeing to share a future tax refund with someone who helped create the conditions for that refund. For investors it matters because those payments reduce the cash the company can use for dividends, buybacks, or reinvestment, and therefore affect valuation and returns.
contingent earnout liabilities financial
"Current portion of contingent earnout liabilities | 115,468 | 9,004 Total current liabilities"
variable interest entities financial
"The following table presents the assets and liabilities of the Company’s consolidated variable interest entities, which are included on the consolidated balance sheets above."
A variable interest entity (VIE) is a business that a company controls through contracts or special arrangements instead of owning a majority of its shares, like steering a puppet without holding its ticket. Investors care because these arrangements can hide who really bears the financial risks and rewards, affect how assets and liabilities appear on financial statements, and create extra legal or enforcement uncertainty that can change the value and risk of an investment.
interest rate swap financial
"the Company entered into a floating-to-fixed interest rate swap agreement with a notional amount of $500.0 million"
An interest rate swap is a financial agreement where two parties exchange interest payments on a set amount of money over time. Typically, one side pays a fixed interest rate, while the other pays a variable rate that can change with market conditions. This helps investors manage or reduce their exposure to interest rate fluctuations, much like locking in a mortgage rate to avoid future cost increases.
valuation allowance financial
"we have determined that it is more likely than not that a portion of our deferred tax assets will be realized. During the first quarter of 2026, we released $167.1 million of the valuation allowance"
A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 10-Q
_________________________________________
(Mark One)
| Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
For the quarterly period ended March 31, 2026
or
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
For the transition period from ________ to _________
Commission File Number: 001-39095
_________________________________________
(Exact name of registrant as specified in its charter)
_________________________________________
 | ||||||||||||||||||||
| (State or other jurisdiction of | (I.R.S. Employer | |||||||||||||||||||
| incorporation or organization) | Identification No.) | |||||||||||||||||||
(Address of principal executive offices) (Zip Code)
(866 ) 279-0698
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
_________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | o | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of April 28, 2026, there were 97,489,954 shares of Class A common stock outstanding and 45,077,671 shares of Class B common stock outstanding.
THE BALDWIN INSURANCE GROUP, INC.
INDEX
| Page | ||||||||||||||
PART I. FINANCIAL INFORMATION | ||||||||||||||
ITEM 1. | Financial Statements (Unaudited) | |||||||||||||
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 | 6 | |||||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2026 and 2025 | 8 | |||||||||||||
Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity for the Three Months Ended March 31, 2026 and 2025 | 9 | |||||||||||||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 | 10 | |||||||||||||
Notes to Condensed Consolidated Financial Statements | 12 | |||||||||||||
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 | ||||||||||||
ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 50 | ||||||||||||
ITEM 4. | Controls and Procedures | 51 | ||||||||||||
PART II. OTHER INFORMATION | ||||||||||||||
ITEM 1. | Legal Proceedings | 52 | ||||||||||||
ITEM 1A. | Risk Factors | 52 | ||||||||||||
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 52 | ||||||||||||
ITEM 3. | Defaults Upon Senior Securities | 52 | ||||||||||||
ITEM 4. | Mine Safety Disclosures | 52 | ||||||||||||
ITEM 5. | Other Information | 53 | ||||||||||||
ITEM 6. | Exhibits | 53 | ||||||||||||
SIGNATURES | 54 | |||||||||||||
Note Regarding Forward-Looking Statements
We have made statements in this report, including matters discussed under Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Part II, Item 1. Legal Proceedings, Part II, Item 1A. Risk Factors and in other sections of this report, that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies, including, for example, our strategy with respect to future capital allocation and anticipated trends in our business. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. You should specifically consider the numerous risks outlined under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 26, 2026.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this report to conform our prior statements to actual results or revised expectations, except as required by law.
Commonly Used Defined Terms
The following terms have the following meanings throughout this Quarterly Report on Form 10-Q unless the context indicates or requires otherwise:
| 2019 Stockholders Agreement | Stockholders Agreement between Baldwin and the applicable holders of LLC Units in Baldwin Holdings entered into on October 28, 2019 | |||||||
| 2024 Stockholders Agreement | Stockholders Agreement between Baldwin and the applicable holders of LLC Units in Baldwin Holdings entered into on October 30, 2024 | |||||||
| adjusted EBITDA | 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 | |||||||
| Amended LLC Agreement | Third Amended and Restated Limited Liability Company Agreement of Baldwin Holdings, as amended | |||||||
| API | Application programming interface | |||||||
| book of business | Insurance policies bound by us on behalf of our clients | |||||||
| bps | Basis points | |||||||
| Baldwin Holdings | The Baldwin Insurance Group Holdings, LLC, our operating company and a subsidiary of Baldwin | |||||||
| Baldwin | The Baldwin Insurance Group, Inc., our parent company, together, unless the context otherwise requires, with its consolidated subsidiaries, including Baldwin Holdings and its consolidated subsidiaries and affiliates | |||||||
| Capacity Solutions | A division of our Underwriting, Capacity & Technology Solutions operating group that includes our reinsurance brokerage business, Juniper Re, our reinsurance MGA business, MultiStrat, and our captive management business | |||||||
| Captive | The initial series, MSI Multifamily Series Protected Cell, together with the Core, TBG Assurance Company, LLC | |||||||
| clients | Our insureds | |||||||
| colleagues | Our employees | |||||||
| core commissions and fees | Revenue generated from commissions, consulting and service fees, policy fees and installment payments, as well as earned premiums from assumed insurance contracts, collectively | |||||||
| Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
| GAAP | Accounting principles generally accepted in the United States of America | |||||||
| Incremental Term Loans | $600 million of incremental term loans entered into January 2, 2026 pursuant to Amendment No. 4 to the JPM Credit Agreement | |||||||
| insurance company partners | Insurance companies with which we have a contractual relationship | |||||||
| JPM Credit Agreement | Amended and Restated Credit Agreement, dated as of May 24, 2024, which is attached as Annex I to the Amendment and Restatement Agreement, dated May 24, 2024, between Baldwin Holdings, as borrower, JPMorgan Chase Bank, N.A., as the Administrative Agent, the Guarantors party thereto and the Lenders party thereto, as amended by Amendment No. 1 to Amended and Restated Credit Agreement, dated as of December 4, 2024, Amendment No. 2 to Amended and Restated Credit Agreement, dated as of January 10, 2025, Amendment No. 3 to Amended and Restated Credit Agreement, dated as of September 18, 2025, and Amendment No. 4 to Amended and Restated Credit Agreement, dated as of January 2, 2026 | |||||||
| JPM Credit Facility | The Revolving Facility and Term Loans established pursuant to the JPM Credit Agreement | |||||||
| LLC Units | Membership interests of Baldwin Holdings | |||||||
| MGA | Managing General Agent | |||||||
| MSI | Millennial Specialty Insurance, our MGA platform | |||||||
| operating groups | Our reportable segments | |||||||
| partners | Companies that we have acquired, or in the case of asset acquisitions, the producers | |||||||
| partnerships | Strategic acquisitions made by the Company | |||||||
| Pre-IPO LLC Members | Trevor Baldwin, our Chief Executive Officer; Lowry Baldwin, our Chairman; BIGH, LLC, an entity controlled by Lowry Baldwin; Elizabeth Krystyn, one of our founders; Laura Sherman, one of our founders; Daniel Galbraith, President, The Baldwin Group and CEO, Retail Brokerage Operations; Brad Hale, our Chief Financial Officer; and The Villages Invesco, LLC; and certain other historical equity holders including equity holders in companies that we have acquired or producers | |||||||
| reinsurance company partners | Reinsurance companies with which we have a contractual relationship | |||||||
| Revolving Facility | Our revolving credit facility under the JPM Credit Facility with commitments in an aggregate principal amount of $600 million, maturing May 24, 2029 | |||||||
| risk advisors | Our producers | |||||||
| SEC | U.S. Securities and Exchange Commission | |||||||
| Securities Act | Securities Act of 1933, as amended | |||||||
| Senior Secured Notes | 7.125% senior secured notes with an aggregate principal amount of $600 million due May 15, 2031 | |||||||
| SOFR | Secured Overnight Financing Rate | |||||||
| Tax Receivable Agreement | Tax Receivable Agreement between Baldwin and certain holders of LLC Units in Baldwin Holdings entered into on October 28, 2019 | |||||||
| Term Loans | Our term loan facility under the JPM Credit Facility with a principal amount of $1.6 billion, maturing May 24, 2031 | |||||||
| Westwood | Westwood Insurance Agency, a 2022 partner | |||||||
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
| (in thousands, except share and per share data) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Fiduciary cash | ||||||||||||||
| Assumed premiums, commissions and fees receivable, net | ||||||||||||||
| Fiduciary receivables | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Right-of-use assets | ||||||||||||||
| Other assets | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
Liabilities, Mezzanine Equity and Stockholders’ Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Fiduciary liabilities | $ | $ | ||||||||||||
| Commissions payable | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Current portion of contingent earnout liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Revolving line of credit | ||||||||||||||
| Long-term debt, less current portion | ||||||||||||||
| Contingent earnout liabilities, less current portion | ||||||||||||||
| Operating lease liabilities, less current portion | ||||||||||||||
| Tax Receivable Agreement liabilities | ||||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies (Note 17) | ||||||||||||||
| Mezzanine equity: | ||||||||||||||
| Redeemable noncontrolling interest | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
Class A common stock, par value $ | ||||||||||||||
Class B common stock, par value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Total stockholders’ equity attributable to Baldwin | ||||||||||||||
| Noncontrolling interest | ||||||||||||||
| Total stockholders’ equity | ||||||||||||||
| Total liabilities, mezzanine equity and stockholders’ equity | $ | $ | ||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
6
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Balance Sheets (Continued)
(Unaudited)
The following table presents the assets and liabilities of the Company’s consolidated variable interest entities, which are included on the consolidated balance sheets above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated variable interest entities.
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
Assets of Consolidated Variable Interest Entities That Can Only be Used to Settle the Obligations of Consolidated Variable Interest Entities: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Assumed premiums, commissions and fees receivable, net | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
| Right-of-use assets | ||||||||||||||
| Other assets | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities of Consolidated Variable Interest Entities for Which Creditors Do Not Have Recourse to the Company: | ||||||||||||||
| Commissions payable | $ | $ | ||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Total current liabilities | $ | $ | ||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
7
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | ||||||||||||
| Revenues: | ||||||||||||||
| Commissions and fees | $ | $ | ||||||||||||
| Investment income | ||||||||||||||
| Total revenues | ||||||||||||||
| Operating expenses: | ||||||||||||||
| Colleague compensation and benefits | ||||||||||||||
| Outside commissions | ||||||||||||||
| Other operating expenses | ||||||||||||||
| Amortization expense | ||||||||||||||
| Change in fair value of contingent consideration | ||||||||||||||
| Depreciation expense | ||||||||||||||
| Total operating expenses | ||||||||||||||
Operating income (loss) | ( | |||||||||||||
| Other income (expense): | ||||||||||||||
| Interest expense, net | ( | ( | ||||||||||||
| Gain on divestitures | ||||||||||||||
| Loss on extinguishment and modification of debt | ( | ( | ||||||||||||
| Other income (expense), net | ( | |||||||||||||
| Total other expense, net | ( | ( | ||||||||||||
Income (loss) before income taxes and share of net earnings of equity method investee | ( | |||||||||||||
| Share of net earnings of equity method investee | ||||||||||||||
Income (loss) before income taxes | ( | |||||||||||||
| Less: income tax benefit | ( | |||||||||||||
Net income (loss) | ( | |||||||||||||
Less: net income (loss) attributable to noncontrolling interests | ( | |||||||||||||
| Net income attributable to Baldwin | $ | $ | ||||||||||||
Basic earnings per share | $ | $ | ||||||||||||
Diluted earnings per share | $ | $ | ||||||||||||
| Weighted-average shares of Class A common stock outstanding - basic | ||||||||||||||
| Weighted-average shares of Class A common stock outstanding - diluted | ||||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||
| Other comprehensive income | ||||||||||||||
| Comprehensive income | ||||||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests | ( | |||||||||||||
| Comprehensive income attributable to Baldwin | $ | $ | ||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
8
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity
(Unaudited)
| For the Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity | Mezzanine Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Non-controlling Interest | Total | Redeemable Non-controlling Interest | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except share data) | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity issued in business combinations | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation, net of forfeitures | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of Class B common stock | ( | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases of Class A common stock | ( | ( | — | — | — | ( | — | ( | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax Receivable Agreement liability and deferred taxes arising from LLC interest ownership changes | — | — | — | — | ( | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to variable interest entities | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders’ Equity | Mezzanine Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | Total | Redeemable Non-controlling Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except share data) | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation, net of forfeitures | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of Class B common stock | ( | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to variable interest entities | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
9
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income (loss) | $ | ( | $ | |||||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
| Change in fair value of contingent consideration | ||||||||||||||
| Share-based compensation expense | ||||||||||||||
| Payment of contingent earnout consideration in excess of purchase price accrual | ( | ( | ||||||||||||
| Gain on divestitures | ( | |||||||||||||
| Amortization of deferred financing costs | ||||||||||||||
| Other operating activity | ( | |||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Assumed premiums, commissions and fees receivable, net | ( | ( | ||||||||||||
| Prepaid expenses and other current assets | ( | ( | ||||||||||||
| Right-of-use assets | ||||||||||||||
| Accounts payable, accrued expenses and other current liabilities | ||||||||||||||
| Colleague earnout incentives | ( | |||||||||||||
| Operating lease liabilities | ( | ( | ||||||||||||
| Deferred taxes | ( | |||||||||||||
| Net cash used in operating activities | ( | ( | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
| Cash consideration paid for business combinations, net of cash received | ( | |||||||||||||
| Deferred payments for business combinations | ( | |||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Investments in and loans for business ventures | ( | ( | ||||||||||||
| Proceeds from divestitures, net of cash transferred | ||||||||||||||
| Cash consideration paid for asset acquisitions | ( | ( | ||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Change in fiduciary receivables and liabilities, net | ( | ( | ||||||||||||
| Repurchase of common stock | ( | |||||||||||||
Proceeds from revolving line of credit | ||||||||||||||
| Payments on revolving line of credit | ( | ( | ||||||||||||
| Proceeds from refinancing of long-term debt | ||||||||||||||
| Payments relating to extinguishment and modification of long-term debt | ( | |||||||||||||
Payments on long-term debt | ( | ( | ||||||||||||
| Payments of deferred financing costs | ( | |||||||||||||
| Payment of contingent earnout consideration up to amount of purchase price accrual | ( | |||||||||||||
| Other financing activity | ( | ( | ||||||||||||
| Net cash provided by financing activities | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents and fiduciary cash | ( | |||||||||||||
| Cash and cash equivalents and fiduciary cash at beginning of period | ||||||||||||||
| Cash and cash equivalents and fiduciary cash at end of period | $ | $ | ||||||||||||
10
THE BALDWIN INSURANCE GROUP, INC.
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Supplemental schedule of cash flow information: | ||||||||||||||
| Cash paid during the period for interest | $ | $ | ||||||||||||
| Cash paid during the period for income taxes | ||||||||||||||
| Disclosure of non-cash investing and financing activities: | ||||||||||||||
| Equity issued in business combinations | $ | $ | ||||||||||||
| Contingent earnout liabilities recognized in business combinations | ||||||||||||||
| Deferred payment obligations recognized in business combinations | ||||||||||||||
| Establish Tax Receivable Agreement liabilities | ||||||||||||||
| Establish deferred taxes arising from investment in Baldwin Holdings | ||||||||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | ||||||||||||||
| Right-of-use assets increased through lease modifications and reassessments | ||||||||||||||
| Capital expenditures incurred but not yet paid | ||||||||||||||
| Increase in goodwill resulting from measurement period adjustments for prior year business combinations | ||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
11
THE BALDWIN INSURANCE GROUP, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Business and Basis of Presentation
The Baldwin Insurance Group, Inc. was incorporated in the state of Delaware on July 1, 2019 as BRP Group, Inc. and, on May 2, 2024, was renamed The Baldwin Insurance Group, Inc.
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 its business has been and is conducted. In these condensed consolidated financial statements, unless the context otherwise requires, the words “Baldwin,” and the “Company” refer to The Baldwin Insurance Group, Inc., together with its consolidated subsidiaries, including Baldwin Holdings and its consolidated subsidiaries and affiliates.
Baldwin is a diversified insurance agency and services organization that markets and sells insurance products and services to its clients throughout the U.S. A significant portion of the Company’s business is concentrated in the Southeastern U.S., with several other regional concentrations. Baldwin and its subsidiaries operate through three reportable segments (“operating groups”), including Insurance Advisory Solutions, Underwriting, Capacity & Technology Solutions and Mainstreet Insurance Solutions, which are discussed in more detail in Note 18.
Principles of Consolidation
The consolidated financial statements include the accounts of Baldwin and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
As the sole manager of Baldwin Holdings, Baldwin operates and controls all the business and affairs of Baldwin Holdings, and has the sole voting interest in, and controls the management of, Baldwin Holdings. Accordingly, Baldwin consolidates Baldwin Holdings in its consolidated financial statements, resulting in a noncontrolling interest related to the membership interests of Baldwin Holdings (the “LLC Units”) held by Baldwin Holdings’ members in the Company’s consolidated financial statements.
The Company has prepared these condensed consolidated financial statements in accordance with Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“Topic 810”). Topic 810 requires that if an enterprise is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity should be included in the consolidated financial statements of the enterprise. The Company has recognized certain entities as variable interest entities, of which the Company is the primary beneficiary, and has included the accounts of these entities in the consolidated financial statements. Refer to Note 4 for additional information regarding the Company’s variable interest entities.
Topic 810 also requires that the equity of a noncontrolling interest shall be reported on the condensed consolidated balance sheets within total equity of the Company. Certain redeemable noncontrolling interests are reported on the condensed consolidated balance sheets as mezzanine equity. Topic 810 also requires revenues, expenses, gains, losses, net income or loss, and other comprehensive income or loss to be reported in the consolidated financial statements at consolidated amounts, which include amounts attributable to the owners of the parent and the noncontrolling interests.
Unaudited Interim Financial Reporting
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and related notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting of recurring accruals, considered necessary for fair presentation of the financial statements have been included. The accompanying consolidated balance sheet for the year ended December 31, 2025 was derived from audited financial statements, but does not include all disclosures required by GAAP. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2026.
12
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates underlying the accompanying condensed consolidated financial statements include the application of guidance for revenue recognition, impairment of intangible assets and goodwill, the valuation of acquired relationships, the valuation of contingent consideration and the Tax Receivable Agreement liabilities.
Recently Issued Accounting Standards
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)—Disaggregation of Income Statement Expenses (“ASU 2024-03”) to improve the disclosures about a public business entity’s expenses and supply more detailed information about the types of expenses in commonly presented expense captions. These expense captions include purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions such as cost of sales, selling, general and administrative expense, and research and development. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company expects the adoption of this standard to expand its expense disclosures, but otherwise have no impact on the consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”). This ASU amends the guidance for identifying the accounting acquirer in a business combination effected primarily by exchanging equity interests when the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. Under the new guidance, entities must consider the factors in ASC 805-10-55-12 through 55-15—such as relative voting rights, composition of the governing body and management, and size of the combining entities—regardless of whether the legal acquiree is a VIE. This change is intended to improve consistency and comparability in financial reporting for economically similar transactions. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. The Company will apply the amendments prospectively to business combinations occurring after the initial application. The Company expects the adoption of this standard to change how it evaluates the accounting acquirer in future business combinations involving a VIE, but otherwise have no impact on the consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 updates the accounting framework for internal-use software development costs to better reflect modern development practices, including agile methodologies. Key changes include replacing the traditional project stage model with a capitalization threshold based on management’s authorization and commitment to fund the project, along with a requirement that completion of the project be probable. ASU 2025-06 also supersedes guidance on website development costs. This guidance is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years. The Company is currently evaluating the impact this standard will have on the consolidated financial statements.
Changes in Presentation
Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications had no impact on the Company’s previously reported consolidated financial position, results of operations or cash flows.
2. Significant Accounting Policies
Repurchases of Class A Common Stock
The Company accounts for repurchases of its Class A common stock using the constructive retirement method. Shares repurchased are retired immediately upon repurchase and are returned to the status of authorized but unissued shares. Any excess of the repurchase cost over par value is recorded as a reduction to accumulated deficit. No treasury stock is carried on the condensed consolidated balance sheets. In connection with each repurchase of a share of Class A common stock, a corresponding LLC Unit of Baldwin Holdings held by the Company and a corresponding share of Class B common stock are cancelled.
13
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.
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.
The Company accounts for amounts payable under the Tax Receivable Agreement in accordance with ASC Topic 450, Contingencies (“Topic 450”). 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 and the amount and timing of our income. Any such changes in these factors or changes in the Company’s determination of the need for a valuation allowance related to the tax benefits acquired under the Tax Receivable Agreement, including changes in the expected realization of tax benefits, which may be informed by, but not solely determined by, valuation allowance assessments, could adjust the Tax Receivable Agreement liabilities recognized on the consolidated balance sheets.
The Company accounts 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:
•records an increase in deferred tax assets through additional paid-in capital 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 it is estimated that the Company 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, the Company reduces the deferred tax asset with a valuation allowance, also recorded to additional paid-in capital; and
•records 85% of the estimated realizable tax benefit as defined in the Tax Receivable Agreement as an increase to the liability due under the Tax Receivable Agreement, with the offset to additional paid-in capital.
Subsequent changes to the initial establishment of the increases in deferred tax assets and Tax Receivable Agreement liability between reporting periods will be recognized in the consolidated statements of stockholders’ equity and mezzanine equity as the exchanges represent transactions among stockholders. Subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between the Company’s annual tax filing date and the Tax Receivable Agreement payment date, are recognized in the consolidated statements of comprehensive income (loss). In the unlikely event of an early termination of the Tax Receivable Agreement, the Company is required to pay to each holder of the Tax Receivable Agreement an early termination payment equal to the discounted present value of all unpaid Tax Receivable Agreement payments.
3. Business Combinations
The Company completed three business combinations for an aggregate purchase price of $1.6 billion during the three months ended March 31, 2026. In accordance with ASC Topic 805, Business Combinations (“Topic 805”), total consideration was first allocated to the fair value of assets acquired, including liabilities assumed, with the excess being recorded as goodwill. For financial statement purposes, goodwill is not amortized but rather is evaluated for impairment at least annually or more frequently if an event or change in circumstances occurs that indicates goodwill may be impaired. For tax purposes, goodwill is generally deductible and will be amortized over a period of 15 years.
14
The Company completed the following business combinations during the three months ended March 31, 2026:
•The Company acquired the outstanding equity interests of the business of Cobbs Allen Capital Holdings, LLC (“CAC Group”), an Insurance Advisory Solutions partner effective January 1, 2026 , to significantly expand Baldwin’s specialty capabilities and strengthen its specialty product lines and data and analytics platform.
•The Company acquired the outstanding equity interests of Creisoft, Inc. (“Obie”), an Underwriting, Capacity & Technology Solutions partner effective January 2, 2026 , to expand access to embedded insurance distribution capabilities for MSI within the UCTS operating group and strengthen its offerings in the rapidly growing real estate investor market.
•The Company acquired substantially all the assets of Foley Insurance Agency, Inc., doing business as Capstone Group (“Capstone”), an Insurance Advisory Solutions partner effective January 2, 2026 , to expand Baldwin’s regional presence and enhance its ability to deliver comprehensive risk management solutions to a wider client base.
The recorded purchase price for business combinations include an estimation of the fair value of contingent earnout obligations associated with contractual earnout provisions providing for post-closing contingent consideration payments, which are based on revenue, revenue growth and 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 (“adjusted EBITDA”) growth. The contingent earnout consideration amounts identified in the table below are measured at fair value within Level 3 of the fair value hierarchy as discussed further in Note 16. Any subsequent changes in the fair value of contingent earnout liabilities will be recorded in the condensed consolidated statements of comprehensive income (loss) when incurred.
The recorded purchase price allocations for the CAC Group, Obie, and Capstone partnerships also include an estimation of the fair value of equity interests, which is calculated based on the value of the Company’s Class A common stock on the closing date taking into account a discount for lack of marketability.
The operating results of these business combinations have been included in the condensed consolidated statements of comprehensive income (loss) from their respective acquisition dates. The Company recognized total revenues and net loss from its business combinations of $106.1 million and $6.0 million, respectively, for the three months ended March 31, 2026.
Due to the complexity of valuing the consideration paid and the purchase price allocation and the timing of these activities, certain amounts included in the consolidated financial statements may be provisional and subject to additional adjustments within the measurement period as permitted by Topic 805. Specifically, the Company's valuations of the fair value of contingent earnout consideration and intangible assets are estimates based on assumptions of factors such as discount rates and growth rates and tax related balances for CAC Group and Obie are estimates based on the preliminary determination of the tax basis of assets acquired and liabilities assumed. Accordingly, these assets and liabilities are subject to measurement period adjustments as determined after the passage of time. Any measurement period adjustments related to prior period business combinations are reflected as current period adjustments in accordance with Topic 805.
15
The table below provides a summary of the total consideration and the estimated purchase price allocations made for each of the business acquisitions that became effective during the three months ended March 31, 2026.
| (in thousands) | CAC Group | Obie | Capstone | Totals | |||||||||||||||||||
| Cash consideration paid | $ | $ | $ | $ | |||||||||||||||||||
| Fair value of contingent earnout consideration | |||||||||||||||||||||||
| Fair value of equity interest | |||||||||||||||||||||||
Deferred payments(1) | |||||||||||||||||||||||
| Total consideration | $ | $ | $ | $ | |||||||||||||||||||
| Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||||||||||||||||||||
| Cash | $ | $ | $ | ||||||||||||||||||||
| Fiduciary cash | |||||||||||||||||||||||
| Assumed premiums, commissions and fees receivable | |||||||||||||||||||||||
| Fiduciary receivables | |||||||||||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||||||||
| Property and equipment | |||||||||||||||||||||||
| Right-of-use assets | |||||||||||||||||||||||
| Other assets | |||||||||||||||||||||||
| Intangible assets | |||||||||||||||||||||||
| Fiduciary liabilities | ( | ( | ( | ||||||||||||||||||||
| Commissions payable | ( | ( | ( | ||||||||||||||||||||
| Accrued expenses and other current liabilities | ( | ( | ( | ( | |||||||||||||||||||
| Operating lease liabilities, less current portion | ( | ( | ( | ||||||||||||||||||||
| Deferred tax liabilities | ( | ( | ( | ||||||||||||||||||||
| Total identifiable net assets acquired | |||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||
| Net assets acquired | $ | $ | $ | $ | |||||||||||||||||||
| Maximum potential contingent earnout consideration | $ | $ | $ | $ | |||||||||||||||||||
__________
(1) The non-current portion of deferred payment obligations totaling $128.4 million is reflected in other liabilities on the condensed consolidated balance sheet as of March 31, 2026 while the current portion is reflected in accrued expenses and other current liabilities as disclosed in Note 9.
The factors contributing to the recognition of goodwill include the expansion of our specialty risk and advisory capabilities, enhanced embedded insurance distribution and vertical integration within the reinsurance and insurance brokerage industry, and the strengthening of our regional presence and comprehensive risk management offerings.
The intangible assets acquired in connection with the partnerships have the following values and estimated weighted-average lives:
| (in thousands, except weighted-average lives) | Amount | Weighted- Average Life | |||||||||
| Acquired relationships | $ | ||||||||||
| Trade names | |||||||||||
| Software | |||||||||||
16
Future annual estimated amortization expense for the next five years is as follows for intangible assets acquired in connection with the partnerships:
| (in thousands) | Amount | |||||||
| For the remainder of 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 | ||||||||
The following pro forma consolidated results of operations are provided for illustrative purposes only and have been presented as if the CAC Group, Obie, and Capstone partnerships occurred on January 1, 2025. This pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future.
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Pro forma results: | ||||||||||||||
| Revenues | $ | $ | ||||||||||||
Net income (loss) | ( | |||||||||||||
4. Variable Interest Entities
Topic 810 requires a reporting entity to consolidate a VIE when the reporting entity has a variable interest or combination of variable interests that provide the entity with a controlling financial interest in the VIE. The Company continually assesses whether it has a controlling financial interest in each of its VIEs to determine if it is the primary beneficiary of the VIE and should, therefore, consolidate each of the VIEs. A reporting entity is considered to have a controlling financial interest in a VIE if it has (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb the losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.
The Company has determined that it is the primary beneficiary of its VIEs, which include Lennar Insurance Agency, Laureate Insurance Partners, LLC, BKS Smith, LLC, BKS MS, LLC and BKS Partners Galati Marine Solutions, LLC. The Company has consolidated its VIEs into the accompanying condensed consolidated financial statements.
Total revenues and expenses of the Company’s consolidated VIEs included in the condensed consolidated statements of comprehensive income (loss) were as follows:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Consolidated VIEs: | ||||||||||||||
| Revenues | $ | $ | ||||||||||||
| Expenses | ||||||||||||||
The assets of the consolidated VIEs can only be used to settle the obligations of the consolidated VIEs and the creditors of the liabilities of the consolidated VIEs do not have recourse to the Company.
17
5. Revenue
The following table provides disaggregated revenues by major source:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
Commission revenue(1) | $ | $ | ||||||||||||
Profit-sharing revenue(2) | ||||||||||||||
Consulting and service fee revenue(3) | ||||||||||||||
Policy fee and installment fee revenue(4) | ||||||||||||||
Assumed premium earned(5) | ||||||||||||||
Other income(6) | ||||||||||||||
Investment income(7) | ||||||||||||||
| Total revenues | $ | $ | ||||||||||||
__________
(1) Commission revenue is earned by providing insurance placement services to clients under direct bill and agency bill arrangements with insurance company partners and reinsurance company partners for private risk management, commercial risk management, wealth management, employee benefits and Medicare insurance types.
(2) Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain insurance company partners.
(3) Service fee revenue is earned for providing insurance placement services to clients for a negotiated fee and consulting revenue is earned by providing specialty insurance consulting and other advisory services.
(4) Policy fee revenue represents revenue earned for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance company partners, including delivery of policy documents, processing payments and other administrative functions. Installment fee revenue represents revenue earned by the Company for providing payment processing services on behalf of insurance company partners related to policy premiums paid on an installment basis.
(5) Assumed premium earned relates to the premiums earned in the Captive. Refer to Note 19 for additional information.
(6) Other income includes other ancillary income, premium financing income, and marketing income that is based on agreed-upon cost reimbursement for fulfilling specific targeted Medicare marketing campaigns.
(7) Investment income represents interest earnings on available cash invested in Treasury money market funds.
The application of Topic 606 requires the use of management judgment. The following are the areas of most significant judgment as it relates to Topic 606:
•The Company considers the policyholders as representative of its customers in the majority of contractual relationships, with the exception of Medicare contracts in its Mainstreet Insurance Solutions operating group, where the insurance company partner is considered its customer.
•Medicare contracts in the Mainstreet Insurance Solutions operating group are multi-year arrangements in which the Company is entitled to renewal commissions. However, the Company has 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 the Company’s control, including policyholder discretion over plans and insurance company partner relationship, political influence, and a contractual provision, which limits the Company’s 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.
•The Company recognizes separately contracted commission revenue at the effective date of insurance placement and considers any ongoing interaction with the customer to be insignificant in the context of the obligations of the contract.
•Variable consideration includes estimates of direct bill commissions, reserves for policy cancellations and accruals for profit-sharing income.
•Costs to obtain a contract are deferred and recognized over five years , which represents management’s estimate of the average benefit period for new business.
•With respect to costs to fulfill a contract, because costs relating to unsatisfied performance obligations are not able to be distinguished from those relating to satisfied performance obligations, such costs are expensed as incurred.
18
6. Contract Assets and Liabilities
Contract assets arise when the Company recognizes revenue for amounts which have not yet been billed. Contract liabilities relate to payments received in advance of performance under the contract before the transfer of a good or service to the customer. Contract assets are included in assumed premiums, commissions and fees receivable, net and contract liabilities are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. The balances of contract assets and liabilities arising from contracts with customers were as follows:
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Contract assets | $ | $ | ||||||||||||
| Contract liabilities | ||||||||||||||
During the three months ended March 31, 2026, the Company recognized revenue of $23.8 million related to the contract liabilities balance at December 31, 2025.
7. Deferred Commission Expense
The Company pays an incremental amount of compensation in the form of producer commissions on new business. In accordance with ASC Topic 340, Other Assets and Deferred Costs, these incremental costs are deferred and amortized over five years , which represents management’s estimate of the average benefit period for new business. Deferred commission expense represents producer commissions that are capitalized and not yet expensed and are included in other assets on the condensed consolidated balance sheets. The table below provides a rollforward of deferred commission expense:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Costs capitalized | ||||||||||||||
| Amortization | ( | ( | ||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
8. Goodwill
The changes in carrying value of goodwill by operating group for the periods are as follows:
| (in thousands) | Insurance Advisory Solutions | Underwriting, Capacity & Technology Solutions | Mainstreet Insurance Solutions | Total | ||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||
| Goodwill of acquired businesses | ||||||||||||||||||||||||||
Measurement period adjustments(1) | ||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||
__________
(1) Adjustments were made within the permitted measurement period to reflect a decrease in assumed premiums, commissions and fees receivable, net related to partnerships entered into in the prior year. The measurement period adjustments have been reflected as current‑period adjustments in accordance with Topic 805 and had no effect on results of operations or cash flows.
19
9. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
| (in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Accrued expenses | $ | $ | ||||||||||||
| Accrued compensation and benefits | ||||||||||||||
| Contract liabilities | ||||||||||||||
| Deferred payments | ||||||||||||||
| Current portion of operating lease liabilities | ||||||||||||||
| Accrued interest | ||||||||||||||
| Assumed premium unearned | ||||||||||||||
| Current portion of long-term debt | ||||||||||||||
| Other | ||||||||||||||
| Accrued expenses and other current liabilities | $ | $ | ||||||||||||
10. Long-Term Debt
As of December 31, 2025, the Amendment No. 3 to the Amended and Restated Credit Agreement (the “JPM Credit Agreement”) provided for senior secured credit facilities in an aggregate principal amount of $1.61 billion, which consisted of (i) a term loan facility in the principal amount of $1.0 billion, bearing interest at a rate of term , plus an applicable margin of 250 bps, maturing May 24, 2031 (the “2025 Term Loans”) and (ii) a revolving credit facility with commitments in an aggregate principal amount of $600 million, bearing interest at term SOFR plus a 10 bps credit spread adjustment and an applicable margin ranging from 175 bps to 250 bps based on the Company’s total first lien net leverage ratio maturing May 24, 2029 (the “Revolving Facility” and, together with the 2025 Term Loans, the “JPM Credit Facility”). As of March 31, 2026 and December 31, 2025, Baldwin Holdings also had 7.125 % Senior Secured Notes with an aggregate principal amount of $600 million due May 15, 2031.
On January 2, 2026, the Company entered into Amendment No. 4 to the JPM Credit Agreement, which provided for $600 million of incremental term loans (the “Incremental Term Loans” and, collectively with the 2025 Term Loans, the “Term Loans”). The refinancing increased the aggregate principal amount of outstanding term loans under the JPM Credit Agreement to approximately $1.6 billion. The Company incurred approximately $12.0 million of debt issuance costs in connection with the refinancing. The Incremental Term Loans are subject to the same terms and conditions applicable to the existing 2025 Term Loans under the JPM Credit Agreement. The Incremental Term Loans require quarterly principal payments of $4.0 million, with the remaining balance payable in full on the maturity date thereof.
As of March 31, 2026 and December 31, 2025, the Company’s outstanding borrowings under the Term Loans of $1.6 billion and $1.0 billion, respectively, had respective applicable interest rates of 6.18 % and 6.25 %. As of March 31, 2026 and December 31, 2025, the Company’s outstanding borrowings under the Revolving Facility of $191.0 million and $107.0 million, respectively, had respective applicable interest rates of 6.27 % and 6.39 %. The Revolving Facility was subject to a commitment fee of 0.40 16.0 million, which are subject to letter of credit fees.
11. Derivative Instruments and Hedging
The Company is exposed to interest rate risk resulting from its long-term debt and revolving facility. The Company uses derivative instruments, including, from time to time, interest rate caps and swaps, to mitigate its exposure to variability in cash flows due to changes in interest rates on its floating-rate debt. However, the Company does not use derivative instruments for trading or speculative purposes.
On September 14, 2025, the Company entered into a floating-to-fixed interest rate swap agreement with a notional amount of $500.0 million, under which it exchanged the variable rate on the Term Loans, indexed to 1-month term SOFR, for a fixed rate of 3.244 %. Interest payments were made on a monthly basis commencing October 14, 2025 and continue through the termination date of September 14, 2028.
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The interest rate swap has been designated as a cash flow hedge under ASC 815, Derivatives and Hedging. The Company assesses hedge effectiveness using the hypothetical derivative method and expects the hedge to be highly effective over its term. Changes in the fair value of the interest rate swap are recorded in accumulated other comprehensive income, which is a component of equity on the condensed consolidated balance sheets. The net cash settlements of the interest rate swap are classified within cash flows from operating activities in the condensed consolidated statements of cash flows. The Company’s hedging program extends through September 2028.
At March 31, 2026 and December 31, 2025, the fair value of the interest rate swap was a $4.1 million asset and a $0.8 million asset, respectively, which is included in other assets on the condensed consolidated balance sheets. The Company recorded a $3.3 million gain in other comprehensive income related to the interest rate swap during the three months ended March 31, 2026.
12. Related Party Transactions
Related Party Balances
Baldwin Holdings holds an ownership interest in Emerald Bay Risk Solutions, LLC (“Emerald Bay”), an entity formed for the benefit of the MGA business, to which Baldwin Holdings, Lowry Baldwin (the Company's Chairman), and members of the Company's executive management team have made capital commitments. The carrying value of the Company’s investment in Emerald Bay was $2.3
Commission Revenue
The Company serves as a broker for Holding Company of the Villages, Inc. (“The Villages”), a significant shareholder, and certain affiliated entities. Commission revenue recorded from transactions with The Villages and affiliated entities was $0.8 million and $1.8 million for the three months ended March 31, 2026 and 2025, respectively.
Family Relationships
The Estate of John Baldwin, brother of Lowry Baldwin, the Company’s Chairman, received $1.1 million in proceeds from the Company for the sale of John Baldwin’s book of business during the three months ended March 31, 2026.
Rent Expense
The Company has various agreements to lease office space from wholly-owned subsidiaries of The Villages. Total rent expense incurred with respect to The Villages and its wholly-owned subsidiaries was approximately $0.2 2.1 million and $2.1 million, respectively, at March 31, 2026 and $1.7 million and $1.8 million, respectively, at December 31, 2025.
The Company has various agreements to lease office space from other related parties. Total rent expense incurred with respect to other related parties was $0.8 million and $0.9 million for the three months ended March 31, 2026 and 2025. Total right-of-use assets and operating lease liabilities included on the Company’s condensed consolidated balance sheets relating to these lease agreements were $9.7 million and $10.1 million, respectively, at March 31, 2026 and $7.6 million and $8.8 million, respectively, at December 31, 2025.
13. Share-Based Compensation
The Company has an Omnibus Incentive Plan (the “Omnibus Plan”) and a Partnership Inducement Award Plan (the “Inducement Plan” and, collectively with the Omnibus Plan, the “Plans”) to motivate and reward colleagues and certain other individuals to perform at the highest level and contribute significantly to the Company’s success, thereby furthering the best interests of Baldwin’s stockholders. The total number of shares of Class A common stock authorized for issuance under the Omnibus Plan and the Inducement Plan was 15,513,345 and 3,000,000 , respectively, at March 31, 2026.
During the three months ended March 31, 2026, the Company made awards of restricted stock awards (“RSAs”) and fully vested shares under the Plans to its non-employee directors, officers, colleagues and consultants. Fully-vested shares issued to directors, officers and colleagues during the three months ended March 31, 2026 were vested upon issuance, while RSAs issued to colleagues, consultants and officers generally either cliff vest after to four years or vest ratably over to five years .
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The following table summarizes the activity for awards granted by the Company under the Plans:
| Shares | Weighted-Average Grant-Date Fair Value Per Share | |||||||||||||
Non-vested awards outstanding at December 31, 2025 | $ | |||||||||||||
Granted | ||||||||||||||
Vested and settled | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Non-vested awards outstanding at March 31, 2026 | ||||||||||||||
The total fair value of shares that vested and settled under the Plans was $40.8 million and $36.7 million for the three months ended March 31, 2026 and 2025, respectively.
Share-based compensation is recognized ratably over the vesting period of the respective awards and includes expense related to issuances under the Plans and the portion of annual bonuses that are payable in fully-vested shares of Class A common stock. The Company recognizes share-based compensation expense for the Plans net of actual forfeitures. The Company recorded share-based compensation expense of $12.8
14. Income Taxes
Baldwin is the sole managing member of Baldwin Holdings, which is treated as a partnership for U.S. federal, state and local income tax purposes. As a partnership, Baldwin Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Baldwin Holdings is passed through to and included in the taxable income or loss of its partners, including Baldwin, on a pro rata basis. Baldwin is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to Baldwin’s allocable share of income of Baldwin Holdings.
Effective Tax Rate
The Company’s annual effective tax rate was 0.2 % and 4.1 % for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2026 was lower than the U.S. federal statutory rate primarily as result of the valuation allowance release and the impact of partnership income allocations. The effective tax rate for three months ended March 31, 2025 was lower than the U.S. federal statutory rate primarily as a result of the change in the valuation allowance and the impact of partnership income allocations.
The Company does not believe it has any significant uncertain tax positions and therefore has no unrecognized tax benefits as of March 31, 2026, that, if recognized, would affect the annual effective tax rate.
Deferred Taxes
The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which the related temporary differences become deductible, as well as the Company’s ability to implement feasible tax‑planning strategies. The Company has historically maintained a full valuation allowance on its deferred tax assets due to uncertainty regarding the generation of sufficient future taxable income necessary to realize those assets.
Each reporting period, the Company evaluates both positive and negative evidence that could affect its assessment of the realizability of its deferred tax assets. Our reassessment in the first quarter of 2026 included the consideration of additional evidence arising from the Company’s acquisition of the outstanding equity interests of CAC Group on January 1, 2026 and Obie on January 2, 2026, which resulted in the recognition of $142.2 million of deferred tax liabilities. The recognition of deferred tax liabilities associated with acquired intangible assets provided a source of future taxable income, which supported the realizability of certain deferred tax assets and resulted in a shift from a net deferred tax asset position to a net deferred tax liability position. Based on the evaluation of all available positive and negative evidence, the Company concluded that sufficient positive evidence existed to support the realizability of the majority of its deferred tax assets.
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As of December 31, 2025, the Company maintained a full valuation allowance on its deferred tax assets of $210.7 million. As previously discussed, and due in part to the acquisitions of CAC Group and Obie, we have determined that it is more likely than not that a portion of our deferred tax assets will be realized. During the first quarter of 2026, we released $167.1 million of the valuation allowance previously recorded and recorded an increase in net deferred tax liabilities of $30.0 million, with $144.5 million recognized as income tax benefit in the condensed consolidated statements of comprehensive income (loss) and $7.3 million recognized as a reduction to additional paid-in capital on the condensed consolidated statements of stockholders’ equity and mezzanine equity. As of March 31, 2026, the Company was in a net deferred tax liability position of $4.7 million.
Our income tax benefit was $144.5 million for the three months ended March 31, 2026, which reflects the release of the majority of the valuation allowance, partially offset by the change in deferred tax liabilities, which were recognized in connection with the CAC Group and Obie partnerships. For the three months ended March 31, 2025, the Company did not record an income tax benefit or expense due to the full valuation allowance maintained against its deferred tax assets.
Tax Receivable Agreement
Baldwin Holdings makes 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 and corresponding Class B common stock for shares of Class A common stock occurs. Exchanges result in tax basis adjustments to the assets of Baldwin Holdings, which produce favorable tax attributes and reduce the amount of tax that Baldwin is required to pay.
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.
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.
The Company accounts for amounts payable under the Tax Receivable Agreement in accordance with Topic 450. 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 and the amount and timing of our income. Any such changes in these factors or changes in the Company’s determination of the need for a valuation allowance related to the tax benefits acquired under the Tax Receivable Agreement, including changes in the expected realization of tax benefits, which may be informed by, but not solely determined by, valuation allowance assessments, could adjust the Tax Receivable Agreement liabilities recognized on the consolidated balance sheets.
The Company accounts 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:
•records an increase in deferred tax assets through additional paid-in capital 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 it is estimated that the Company 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, the Company reduces the deferred tax asset with a valuation allowance, also recorded to additional paid-in capital; and
•records 85% of the estimated realizable tax benefit as defined in the Tax Receivable Agreement as an increase to the liability due under the Tax Receivable Agreement, with the offset to additional paid-in capital.
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Subsequent changes to the initial establishment of the increases in deferred tax assets and Tax Receivable Agreement liability between reporting periods will be recognized in the consolidated statements of stockholders’ equity and mezzanine equity as the exchanges represent transactions among stockholders. Subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between the Company’s annual tax filing date and the Tax Receivable Agreement payment date, are recognized in the consolidated statements of comprehensive income (loss). In the unlikely event of an early termination of the Tax Receivable Agreement, the Company is required to pay to each holder of the Tax Receivable Agreement an early termination payment equal to the discounted present value of all unpaid Tax Receivable Agreement payments.
Following the Company’s assessment of the realizability of its deferred tax assets during the three months ended March 31, 2026 discussed above, and after concluding that the related tax benefits were more likely than not to be realized, the Company determined that the Tax Receivable Agreement liabilities associated with these basis increases generated to date was probable of being payable. Accordingly, the Company recorded Tax Receivable Agreement liabilities equal to 85 % of the tax benefits expected to be realized from the redemptions. The Company anticipates having sufficient taxable income to be able to realize the benefits and has recorded Tax Receivable Agreement liabilities based on the undiscounted estimated future payments under the Tax Receivable Agreement. The amounts payable under the Tax Receivable Agreement will vary depending upon a number of factors, including the amount, character, and timing.
During the three months ended March 31, 2026, 1,490,372 LLC Units were redeemed by the Pre‑IPO LLC Members in exchange for an equal number of newly issued shares of Class A common stock. These exchanges resulted in an increase in the tax basis of Baldwin’s investment in Baldwin Holdings, generating additional deferred tax assets subject to the provisions of the Tax Receivable Agreement.
As of March 31, 2026 and December 31, 2025, the Company had Tax Receivable Agreement liabilities of $144.6 million and $4.5 million, respectively, representing amounts payable to current or former Baldwin Holdings LLC Members under the Tax Receivable Agreement. These amounts are included in Tax Receivable Agreement liabilities on the consolidated balance sheets.
During the three months ended March 31, 2026, increases to the Tax Receivable Agreement liabilities of $130.0 million due to the initial recognition were recognized in other operating expenses on the condensed consolidated statements of comprehensive income (loss). During the three months ended March 31, 2026, increases to the Tax Receivable Agreement liabilities of $14.6 million due to exchanges of LLC Common Units for Class A common stock were recognized as a reduction to additional paid-in capital on the condensed consolidated statements of stockholders’ equity and mezzanine equity.
15. Earnings (Loss) Per Share
Basic earnings (loss) per share is computed by dividing net income (loss) attributable to Baldwin by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings (loss) per share is computed giving effect to all potentially dilutive shares of common stock.
The following table sets forth the computation of basic and diluted earnings per share:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | ||||||||||||
Basic earnings per share: | ||||||||||||||
| Net income attributable to Baldwin | $ | $ | ||||||||||||
Shares used for basic earnings per share: | ||||||||||||||
| Weighted-average shares of Class A common stock outstanding - basic | ||||||||||||||
Basic earnings per share | $ | $ | ||||||||||||
Diluted earnings per share: | ||||||||||||||
| Net income attributable to Baldwin | $ | $ | ||||||||||||
Shares used for diluted earnings per share: | ||||||||||||||
| Weighted-average shares of Class A common stock outstanding - basic | ||||||||||||||
| Dilutive effect of unvested stock awards | ||||||||||||||
| Weighted-average shares of Class A common stock outstanding - diluted | ||||||||||||||
Diluted earnings per share | $ | $ | ||||||||||||
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Potentially dilutive securities consist of unvested stock awards, including RSAs and PSUs, in addition to shares of Class B common stock, which can be exchanged (together with a corresponding number of LLC Units) for shares of Class A common stock on a one-for-one basis. The following potentially dilutive securities were excluded from the Company's diluted weighted-average number of shares outstanding calculation for the periods presented as their inclusion would have been anti-dilutive.
| For the Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Shares of Class B common stock | ||||||||||||||
The shares of Class B common stock do not share in the earnings or losses attributable to Baldwin, and therefore, are not participating securities. Accordingly, a separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been included.
16. Fair Value Measurements
ASC Topic 820, Fair Value Measurement (“Topic 820”) established a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy under Topic 820 are described below:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level 2: Inputs to the valuation methodology are quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The fair value measurement level for assets and liabilities within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis within each level of the fair value hierarchy:
| Fair Value Hierarchy | |||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||
| (in thousands) | March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Money market funds | $ | $ | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
| Derivative instruments | — | — | — | — | |||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| Contingent earnout liabilities | — | — | — | — | |||||||||||||||||||||||||||||||
Money Market Funds
The Company has investments in money market funds, which are included in cash and cash equivalents and fiduciary cash on the condensed consolidated balance sheets. Fair value inputs for these investments are considered Level 1 measurements within the fair value hierarchy since money market fund fair values are known and observable through daily published floating values.
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Derivative Instruments
The Company’s derivative instruments include an interest rate swap, which is classified within Level 2 of the fair value hierarchy. The fair value of the interest rate swap was determined using an income approach based on the terms of the contract and inputs corroborated by observable market data, including interest rate curves.
Contingent Earnout Liabilities
Methodologies used for liabilities measured at fair value on a recurring basis within Level 3 of the fair value hierarchy are based on limited unobservable inputs. These methods may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of differing methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The fair value of contingent earnout liabilities is based on sales projections for the acquired entities, which are reassessed each reporting period. Based on the Company’s ongoing assessment of the fair value of its contingent earnout liabilities, the Company recorded a net increase (decrease) in the estimated fair value of such liabilities of $2.0 million and $8.1 million for the three months ended March 31, 2026 and 2025, respectively. The Company has assessed the maximum estimated exposure to the contingent earnout liabilities to be $589.4 million at March 31, 2026.
The Company measures contingent earnout liabilities at fair value each reporting period using significant unobservable inputs classified within Level 3 of the fair value hierarchy. The Company uses a probability weighted value analysis as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are sales projections over the earnout period, and the probability outcome percentages assigned to each scenario. Significant increases or decreases to either of these inputs would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earnout liabilities. Ultimately, the liability will be equivalent to the amount settled, and the difference between the fair value estimate and amount settled will be recorded in earnings for business combinations, or as a change in the cost of the assets acquired for asset acquisitions.
The fair value of the contingent earnout liabilities is 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, which at times includes Monte Carlo simulations or a discounted cash flow analysis. In determining fair value, the Company estimates the partner’s future performance using financial projections developed by management for the partner and market participant assumptions that were derived for revenue growth, EBITDA growth and retention rates. Revenue or EBITDA growth rates generally ranged from 8 % to 23 % at March 31, 2026 and were generally 20 % at December 31, 2025. The Company estimates future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. These payments are generally discounted to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the partner to achieve the targets. These discount rates generally ranged from 8 % to 23 % at March 31, 2026. No significant discount rates were applied to the remaining material contingent earnout liabilities at December 31, 2025 due, in part, to the short-term nature of a substantial portion of the liabilities wherein their fair values approximated their carrying values. Changes in financial projections, market participant assumptions for revenue growth, or the risk-adjusted discount rate, would result in a change in the fair value of contingent consideration.
The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
Change in fair value of contingent consideration(1) | ||||||||||||||
| Fair value of contingent consideration issuances | ||||||||||||||
Settlement of contingent consideration(2) | ( | ( | ||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
__________
(1) The Company reclassified $(3.3 ) million of its contingent earnout liabilities through the issuance (reduction) of colleague earnout incentives during the three months ended March 31, 2025, which resulted in a reclassification between the change in fair value of contingent consideration and colleague compensation and benefits expense in the condensed consolidated statements of comprehensive income (loss).
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(2) The condensed consolidated statement of cash flows for the three months ended March 31, 2025 includes $5.6 million of payments of contingent earnout consideration related to non-cash settlements in prior periods.
Fair Value of Other Financial Instruments
The fair value of long-term debt and the revolving line of credit are based on estimates using discounted cash flow analyses and current borrowing rates for similar types of borrowing arrangements. The carrying amounts and estimated fair value of long-term debt and the revolving line of credit were as follows:
| Fair Value Hierarchy | March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||
| (in thousands) | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||
Long-term debt(1) | Level 2 | $ | $ | $ | $ | ||||||||||||||||||||||||
| Revolving line of credit | Level 2 | ||||||||||||||||||||||||||||
__________
17. Commitments and Contingencies
Commitments
As of March 31, 2026, Baldwin Holdings has a remaining commitment to the University of South Florida (“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 the amounts to be donated by the Company.
Legal Proceedings
The Company is involved in various claims and legal actions arising in the ordinary course of business. A liability is recorded when a loss is considered probable and is reasonably estimable in accordance with GAAP. When a material loss contingency is reasonably possible but not probable, the Company will disclose the nature of the claim and, if possible, an estimate of the loss or range of loss. In the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.
On February 8, 2023, Ruby Wagner, a putative Class A stockholder of the Company, filed a class action lawsuit (the “Lawsuit”), on behalf of herself and other similarly situated stockholders in the Delaware Court of Chancery against the Company seeking declaratory judgment that certain provisions of the 2019 Stockholders Agreement between the Company and the Pre-IPO LLC Members are invalid and unenforceable as a matter of Delaware law. On May 28, 2024, the Court of Chancery issued an opinion (the “Chancery Court Opinion”) that certain provisions of the 2019 Stockholders Agreement granting approval rights related to amending the Company’s certificate of incorporation and making significant decisions relating to the Company’s senior management, are facially invalid, void, and unenforceable under Delaware law. An implementing order, presently in effect, was entered on June 20, 2024. The Chancery Court Opinion also held that a severability provision in the 2019 Stockholders Agreement allows the Pre-IPO LLC Members to demand a “suitable and equitable substitute” for the approval rights that were deemed invalid, such as the issuance of a so-called golden share of preferred stock in the Company. Following the Chancery Court Opinion, a counterparty to the 2019 Stockholders Agreement requested the issuance of such golden share. An independent committee of the Company’s board of directors, advised by independent counsel, determined that entering into a contractual agreement containing substantially the same rights as those contained in the 2019 Stockholders Agreement, as authorized by a newly-enacted provision of Delaware law, rather than issuance of a golden share, would be in the best interests of the Company and its stockholders and, following negotiation, the Company entered into the 2024 Stockholders Agreement on October 30, 2024. On January 22, 2025, the Court of Chancery granted plaintiff an award of attorneys' fees and expenses in the amount of $2.4 million (the “Fee Award”). On February 21, 2025, the Company filed an appeal from the Chancery Court Opinion and the Fee Award with the Delaware Supreme Court. Due to the Company’s appeal, management has estimated the potential range of loss from the ultimate disposition of this matter to be between $0 , if the appeal is successful, and $2.4 million, if the Fee Award is upheld, a significant portion of which may be covered by insurance.
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18. Segment Information
Baldwin’s business is divided into three operating groups: Insurance Advisory Solutions, Underwriting, Capacity & Technology Solutions and Mainstreet Insurance Solutions.
•The Insurance Advisory Solutions (“IAS”) operating group 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 its national footprint which has assimilated some of the highest quality independent insurance brokers in the country with vast and varied strategic capabilities and expertise.
•The Underwriting, Capacity & Technology Solutions (“UCTS”) operating group consists of three distinct divisions—its MGA platform, MSI; its Capacity Solutions group (which consists of its reinsurance brokerage business, Juniper Re; its reinsurance MGA business, MultiStrat; and its captive management business); and the Captive. Through MSI, the Company manufactures proprietary, technology-enabled insurance products that are then distributed (in many instances via technology and/or API integrations) internally via risk advisors across its other operating groups and externally via select distribution partners, with a focus on sheltered channels where its products deliver speed, ease of use and certainty of execution, an example of which is the national embedded renters insurance product sold at point of lease via integrations with property management software providers.
•The Mainstreet Insurance Solutions (“MIS”) operating group 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. The MIS operating group 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 all its operating groups, the Company generates commissions from insurance placement under both agency bill and direct bill arrangements, and profit-sharing income based on either the underlying book of business or performance, such as loss ratios. All operating groups also generate other ancillary income.
In the IAS and UCTS operating groups, the Company generates fees from service fee and consulting arrangements. Service fee arrangements are in place with certain clients for providing insurance placement services.
In the UCTS operating group, the Company generates fees from policy fee and installment fee arrangements. Policy fee revenue is earned for acting in the capacity of an MGA and providing payment processing services and other administrative functions on behalf of insurance company partners. Additionally, the UCTS operating group generates assumed premium earned through the Captive business.
In the MIS operating group, the Company generates commissions and fees from marketing income, which is earned through co-branded Medicare marketing campaigns with the Company’s insurance company partners.
In addition, the Company generates investment income in all its operating groups and the Corporate and Other non-reportable segment.
The Company’s chief operating decision maker, the chief executive officer, evaluates the performance of its reportable segments based on net income (loss) and adjusted EBITDA. The chief operating decision maker considers actual, actual-to-prior year variances, and budget-to-actual variances on a monthly basis for both profit measures to manage resources and make decisions about the business. However, only segment net income (loss), as the measure of segment profit or loss that is most consistent with GAAP measurement principles, is disclosed below.
Summarized financial information regarding the Company’s operating groups is shown in the following tables. Corporate and Other includes any expenses not allocated to the operating groups and corporate-related items, including interest expense. Intersegment revenue and expenses are eliminated through Corporate and Other. Service center expenses and other overhead are allocated to the Company’s operating groups based on either revenue or headcount as applicable to each expense.
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| For the Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||
| (in thousands) | Insurance Advisory Solutions | Underwriting, Capacity & Technology Solutions | Mainstreet Insurance Solutions | Corporate and Other | Total | ||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||
Commission revenue(1) | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Profit-sharing revenue | |||||||||||||||||||||||||||||
| Consulting and service fee revenue | |||||||||||||||||||||||||||||
| Policy fee and installment fee revenue | |||||||||||||||||||||||||||||
| Assumed premium earned | |||||||||||||||||||||||||||||
| Other income | ( | ||||||||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||||||||
| Total revenues | ( | ||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||
| Inside advisor commissions | |||||||||||||||||||||||||||||
| Fixed compensation | |||||||||||||||||||||||||||||
| Benefits and other | |||||||||||||||||||||||||||||
| Share-based compensation | |||||||||||||||||||||||||||||
| Severance | |||||||||||||||||||||||||||||
| Colleague compensation and benefits | |||||||||||||||||||||||||||||
Outside commissions(1) | ( | ||||||||||||||||||||||||||||
| Selling expense | |||||||||||||||||||||||||||||
| Operating expense | |||||||||||||||||||||||||||||
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All other expenses (income), net(2) | ( | ( | |||||||||||||||||||||||||||
| Total expense | |||||||||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||
| Other segment disclosures: | |||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Depreciation and amortization expense | |||||||||||||||||||||||||||||
| Interest expense, net | ( | ||||||||||||||||||||||||||||
| Loss on extinguishment and modification of debt | |||||||||||||||||||||||||||||
| Capital expenditures | |||||||||||||||||||||||||||||
| At March 31, 2026 | |||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
__________
(1) During the three months ended March 31, 2026, the IAS operating group recorded commission revenue shared with other operating groups of $0.2 million and the UCTS operating group recorded commission revenue shared with other operating groups of $15.8 million. Commission revenue shared with other operating groups, and the related outside commissions, are eliminated through Corporate and Other.
(2) All other expenses (income), net includes change in fair value of contingent consideration, other income (expense), net, share of net earnings of equity method investee and income tax benefit.
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| For the Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| (in thousands) | Insurance Advisory Solutions | Underwriting, Capacity & Technology Solutions | Mainstreet Insurance Solutions | Corporate and Other | Total | ||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||
Commission revenue(1) | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Profit-sharing revenue | |||||||||||||||||||||||||||||
| Consulting and service fee revenue | |||||||||||||||||||||||||||||
| Policy fee and installment fee revenue | |||||||||||||||||||||||||||||
| Assumed premium earned | |||||||||||||||||||||||||||||
| Other income | |||||||||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||||||||
| Total revenues | ( | ||||||||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||||||||
| Inside advisor commissions | |||||||||||||||||||||||||||||
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| Benefits and other | |||||||||||||||||||||||||||||
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| Severance | |||||||||||||||||||||||||||||
| Colleague earnout incentives | ( | ( | ( | ||||||||||||||||||||||||||
| Colleague compensation and benefits | |||||||||||||||||||||||||||||
Outside commissions(1) | ( | ||||||||||||||||||||||||||||
| Selling expense | |||||||||||||||||||||||||||||
| Operating expense | |||||||||||||||||||||||||||||
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All other expenses, net(2) | |||||||||||||||||||||||||||||
| Total expense | |||||||||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Other segment disclosures: | |||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Depreciation and amortization expense | |||||||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Gain on divestitures | ( | ( | |||||||||||||||||||||||||||
| Loss on extinguishment and modification of debt | |||||||||||||||||||||||||||||
| Capital expenditures | |||||||||||||||||||||||||||||
| At December 31, 2025 | |||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
__________
(1) During the three months ended March 31, 2025, the UCTS operating group recorded commission revenue shared with other operating groups of $18.1 million. Commission revenue shared with other operating groups, and the related outside commissions, are eliminated through Corporate and Other.
(2) All other expenses, net include change in fair value of contingent consideration, gain on divestitures and other income (expense), net.
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19. Captive Insurance Operations
The Company’s UCTS operating group 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”).
Effective January 1, 2025, the initial series, MSI Multifamily Series Protected Cell (the “MSI Cell” and, collectively with the Core, the “Captive”), was licensed and participates as a quota share reinsurer on two of MSI’s multifamily programs, renters and master tenant legal liability, for the purpose of further participating in underwriting results. The reinsurance quota share contracts feature an adjustment to assumed premium based on the loss ratio performance of the business assumed.
As of March 31, 2026 and December 31, 2025, assumed premium receivable was $38.4 million and $18.5 million, respectively, which is included as a component of assumed premiums, commissions and fees receivable, net on the condensed consolidated balance sheets. As of December 31, 2025, the assumed premium receivable was accounted for as a funds withheld receivable, net of actual claims paid. As of March 31, 2026 and December 31, 2025, assumed premiums unearned was $18.2 million and $1.9 million, respectively, which is included as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets.
For the three months ended March 31, 2026 and 2025, assumed premium earned was $14.2 million and $4.3 million, respectively, which is included in commissions and fees in the condensed consolidated statements of comprehensive income (loss). Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are made. No such adjustments were made during the three months ended March 31, 2026 or 2025.
The table below provides a rollforward of unpaid losses and loss adjustment reserve:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Incurred losses and LAE | ||||||||||||||
| Actual claims paid | ( | |||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
In December 2024, the initial funding to capitalize the Captive was $12.1 million, provided by Baldwin Holdings substantially in the form of a letter of credit. During August 2025, the Tennessee Department of Commerce and Insurance accepted an amendment to the letter of credit, which reduced funding for the Captive to $8.1 million. As of March 31, 2026 and December 31, 2025, the Captive maintains capital of $8.0 9.9 million and $10.0 million, respectively, as allowed by prescribed practices by the Tennessee Department of Commerce and Insurance.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our 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 discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 and the related notes and other financial information included elsewhere in this report.
In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.
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The following is a discussion of our consolidated results of operations for the three months ended March 31, 2026 and 2025. Consolidated results of operations for the three months ended March 31, 2026 include the results of our CAC Group, Capstone and Obie partnerships from their respective acquisition dates.
| For the Three Months Ended March 31, | Variance | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Amount | % | |||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Core commissions and fees | $ | 498,960 | $ | 381,315 | $ | 117,645 | 31 | % | |||||||||||||||
| Profit-sharing and other income | 29,901 | 29,216 | 685 | 2 | % | ||||||||||||||||||
| Commissions and fees | 528,861 | 410,531 | 118,330 | 29 | % | ||||||||||||||||||
| Investment income | 3,374 | 2,874 | 500 | 17 | % | ||||||||||||||||||
| Total revenues | 532,235 | 413,405 | 118,830 | 29 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Colleague compensation and benefits | 283,612 | 198,020 | 85,592 | 43 | % | ||||||||||||||||||
| Outside commissions | 66,679 | 65,823 | 856 | 1 | % | ||||||||||||||||||
| Other operating expenses | 224,163 | 58,019 | 166,144 | 286 | % | ||||||||||||||||||
| Amortization expense | 55,047 | 25,882 | 29,165 | 113 | % | ||||||||||||||||||
| Change in fair value of contingent consideration | 1,969 | 8,061 | (6,092) | (76) | % | ||||||||||||||||||
| Depreciation expense | 2,031 | 1,583 | 448 | 28 | % | ||||||||||||||||||
| Total operating expenses | 633,501 | 357,388 | 276,113 | 77 | % | ||||||||||||||||||
Operating income (loss) | (101,266) | 56,017 | (157,283) | (281) | % | ||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense, net | (38,900) | (29,976) | (8,924) | 30 | % | ||||||||||||||||||
| Gain on divestitures | — | 1,401 | (1,401) | (100) | % | ||||||||||||||||||
| Loss on extinguishment and modification of debt | (7,409) | (2,394) | (5,015) | n/m | |||||||||||||||||||
| Other income (expense), net | 647 | (150) | 797 | n/m | |||||||||||||||||||
| Total other expense, net | (45,662) | (31,119) | (14,543) | 47 | % | ||||||||||||||||||
Income (loss) before income taxes and share of net earnings of equity method investment | $ | (146,928) | $ | 24,898 | $ | (171,826) | n/m | ||||||||||||||||
__________
n/m not meaningful
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 $118.3 million, or 29%, year over year, driven by commissions and fees contributed by partnership activity of $111.5 million and organic growth in core commissions and fees of $11.3 million, offset in part by lower organic profit-sharing and other revenue of $4.4 million.
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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 $85.6 million, or 43%, year over year. Partnership activity contributed $70.1 million, or 35%, to the increase in colleague compensation and benefits in 2026. After excluding partnership activity, colleague compensation and benefits increased $15.5 million, primarily resulting from the overall growth of the business and elevated health plan costs.
Other Operating Expense
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 $166.1 million year over year. Partnership activity contributed $16.2 million to the increase in other operating expenses in the first quarter of 2026. After excluding partnership activity, other operating expenses increased $149.9 million driven by a $128.8 million increase in Tax Receivable Agreement expense, higher Captive‑related operating expenses of $8.8 million, $7.7 million of transaction-related insurance premiums incurred in connection with the CAC Group partnership, higher professional fees of $4.8 million due to increased legal spend, and higher technology and software-related costs of $2.8 million. The increase in Tax Receivable Agreement expense relates to the recognition of a liability associated with expected future payments under the agreement. Historically, such amounts were not recorded as we did not expect to realize sufficient cash tax benefits. During the period, changes in our tax profile, including the recognition of deferred tax liabilities and other sources of taxable income, resulted in management concluding that a significant portion of the tax benefits associated with prior exchanges is expected to be realized. Accordingly, we recorded a liability representing its estimated obligation to share such realized tax benefits with Baldwin Holdings’ LLC Members. This amount was recorded to other operating expense as it reflects the recognition of previously unrecorded obligations, while future amounts arising from new redemptions or exchanges will be recorded through stockholders’ equity and subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between our annual tax filing date and the Tax Receivable Agreement payment date, will be recognized in the consolidated statements of comprehensive income (loss).
Amortization Expense
Amortization expense increased $29.2 million year over year, driven primarily by the impact of intangible assets recognized in connection with recent partnerships, including those completed in 2025 that are not reflected in our results for the comparative period. The increase also reflects higher amortization of internally developed software placed into service over the past year.
Change in Fair Value of Contingent Consideration
The change in fair value of contingent consideration was a $2.0 million loss for the first quarter of 2026 compared to an $8.1 million loss for the same period of 2025. The fair value loss related to contingent consideration for the first quarter of 2026 was impacted by positive changes in revenue growth trends of certain partners.
Interest Expense, Net
Interest expense, net, increased $8.9 million year over year, resulting from higher average borrowings, offset in part by a lower average interest rate. 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.
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Loss on Extinguishment and Modification of Debt
Loss on extinguishment and modification of debt of $7.4 million for the first quarter of 2026 and $2.4 million for the same period of 2025 relate to debt refinancing transactions completed during those periods.
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 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.
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 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, 2025 are excluded from organic revenue for 2025. However, after June 1, 2026, results from June 1, 2025 to December 31, 2025 for such partners are compared to results from June 1, 2026 to December 31, 2026 for purposes of calculating organic revenue growth in 2026. 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.
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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.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table reconciles adjusted EBITDA and adjusted EBITDA margin to net income (loss), which we consider to be the most directly comparable GAAP financial measure:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | ||||||||||||
| Revenues | $ | 532,235 | $ | 413,405 | ||||||||||
Net income (loss) | $ | (1,896) | $ | 24,898 | ||||||||||
Adjustments to net income (loss): | ||||||||||||||
| Amortization expense | 55,047 | 25,882 | ||||||||||||
| Interest expense, net | 39,207 | 29,976 | ||||||||||||
| Transaction closing costs | 17,668 | — | ||||||||||||
Income and other taxes(1) | (14,148) | 1,471 | ||||||||||||
| Share-based compensation | 12,818 | 12,803 | ||||||||||||
| Transaction-related partnership and integration expenses | 8,173 | 1,533 | ||||||||||||
| Loss on extinguishment and modification of debt | 7,409 | 2,394 | ||||||||||||
Transformation costs(2) | 3,059 | 545 | ||||||||||||
| Depreciation expense | 2,031 | 1,583 | ||||||||||||
| Change in fair value of contingent consideration | 1,969 | 8,061 | ||||||||||||
| Severance | 1,815 | 1,207 | ||||||||||||
| Colleague earnout incentives | — | (3,269) | ||||||||||||
| Gain on divestitures | — | (1,401) | ||||||||||||
Other(3) | 4,096 | 8,112 | ||||||||||||
| Adjusted EBITDA | $ | 137,248 | $ | 113,795 | ||||||||||
Net income (loss) margin | — | % | 6 | % | ||||||||||
| Adjusted EBITDA margin | 26 | % | 28 | % | ||||||||||
__________
(1) Income and other taxes include income tax benefit, Tax Receivable Agreement expense and other operating tax expense, such as state taxes, under GAAP.
(2) 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.
(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.
38
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 Three Months Ended March 31, | ||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | ||||||||||||
Commissions and fees | $ | 528,861 | $ | 410,531 | ||||||||||
Partnership commissions and fees(1) | (111,485) | — | ||||||||||||
| Organic revenue | $ | 417,376 | $ | 410,531 | ||||||||||
Organic revenue growth(2) | $ | 6,933 | $ | 38,219 | ||||||||||
Organic revenue growth %(2) | 2 | % | 10 | % | ||||||||||
__________
(1) Includes the first 12 months of such commissions and fees generated from newly acquired partners.
(2) Organic revenue for the three months ended March 31, 2025 used to calculate organic revenue growth for the three months ended March 31, 2026 was $410.4 million, which is adjusted to exclude commissions and fees from divestitures that occurred during 2025.
39
Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles adjusted net income to net income attributable to Baldwin and reconciles adjusted diluted EPS to diluted earnings per share, which we consider to be the most directly comparable GAAP financial measures:
| For the Three Months Ended March 31, | ||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | ||||||||||||
| Net income attributable to Baldwin | $ | 2,341 | $ | 13,939 | ||||||||||
Net income (loss) attributable to noncontrolling interests | (4,237) | 10,959 | ||||||||||||
| Amortization expense | 55,047 | 25,882 | ||||||||||||
| Transaction closing costs | 17,668 | — | ||||||||||||
Income tax expense(1) | (14,194) | 1,200 | ||||||||||||
| Share-based compensation | 12,818 | 12,803 | ||||||||||||
| Transaction-related partnership and integration expenses | 8,173 | 1,533 | ||||||||||||
| Loss on extinguishment and modification of debt | 7,409 | 2,394 | ||||||||||||
Transformation costs(2) | 3,059 | 545 | ||||||||||||
| Depreciation | 2,031 | 1,583 | ||||||||||||
| Change in fair value of contingent consideration | 1,969 | 8,061 | ||||||||||||
| Severance | 1,815 | 1,207 | ||||||||||||
| Other amortization/accretion, net | 1,103 | 1,422 | ||||||||||||
| Colleague earnout incentives | — | (3,269) | ||||||||||||
| Gain on divestitures | — | (1,401) | ||||||||||||
Other(3) | 4,096 | 8,112 | ||||||||||||
| Adjusted pre-tax income | 99,098 | 84,970 | ||||||||||||
Adjusted income taxes(4) | 9,811 | 8,412 | ||||||||||||
| Adjusted net income | $ | 89,287 | $ | 76,558 | ||||||||||
| Weighted-average shares of Class A common stock outstanding - diluted | 96,828 | 69,328 | ||||||||||||
Exchange of Class B common stock(5) | 45,963 | 49,045 | ||||||||||||
| Adjusted diluted weighted-average shares outstanding | 142,791 | 118,373 | ||||||||||||
Diluted earnings per share | $ | 0.02 | $ | 0.20 | ||||||||||
Effect of exchange of Class B common stock and net income (loss) attributable to noncontrolling interests per share | (0.03) | 0.01 | ||||||||||||
| Other adjustments to earnings per share | 0.71 | 0.51 | ||||||||||||
| Adjusted income taxes per share | (0.07) | (0.07) | ||||||||||||
| Adjusted diluted EPS | $ | 0.63 | $ | 0.65 | ||||||||||
___________
(1) Income tax expense includes income tax benefit and Tax Receivable Agreement expense.
(2) 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.
(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 an 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.
40
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.
IAS results of operations for the three months ended March 31, 2026 include the results of our CAC Group and Capstone partnerships.
| For the Three Months Ended March 31, | Variance | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
| Core commissions and fees | $ | 308,102 | $ | 208,915 | $ | 99,187 | 47 | % | ||||||||||||||||||
| Profit-sharing and other income | 21,546 | 17,734 | 3,812 | 21 | % | |||||||||||||||||||||
| Commissions and fees | 329,648 | 226,649 | 102,999 | 45 | % | |||||||||||||||||||||
Investment income | 1,548 | 1,024 | 524 | 51 | % | |||||||||||||||||||||
Total revenues | 331,196 | 227,673 | 103,523 | 45 | % | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Colleague compensation and benefits | 211,924 | 136,952 | 74,972 | 55 | % | |||||||||||||||||||||
| Outside commissions | 4,676 | 3,638 | 1,038 | 29 | % | |||||||||||||||||||||
Other operating expenses | 39,922 | 20,844 | 19,078 | 92 | % | |||||||||||||||||||||
Amortization expense | 31,542 | 13,563 | 17,979 | 133 | % | |||||||||||||||||||||
Change in fair value of contingent consideration | 298 | 7,138 | (6,840) | (96) | % | |||||||||||||||||||||
Depreciation expense | 713 | 303 | 410 | 135 | % | |||||||||||||||||||||
Total operating expenses | 289,075 | 182,438 | 106,637 | 58 | % | |||||||||||||||||||||
Operating income | 42,121 | 45,235 | (3,114) | (7) | % | |||||||||||||||||||||
Total other income, net | 160 | 1,850 | (1,690) | (91) | % | |||||||||||||||||||||
| Income before income taxes and share of net earnings of equity method investment | $ | 42,281 | $ | 47,085 | $ | (4,804) | (10) | % | ||||||||||||||||||
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 $103.0 million, or 45%, year over year, primarily due to the partnership contribution of $94.7 million. Growth in our core commissions and fees was driven by 13% sales velocity (new business as a percentage of prior year commissions and fees) compared to 14% in the prior-year period. Organic growth was pressured by 70 bps headwind in underlying rate and exposure during the current period resulting from continued rate softness, notably in commercial property lines.
Colleague Compensation and Benefits
Colleague compensation and benefits expense for IAS increased $75.0 million year over year. Partnership activity contributed $62.2 million to the increase in colleague compensation and benefits in 2026. After excluding partnership activity, colleague compensation and benefits expense increased $12.7 million, primarily due to inside advisor commissions of $5.1 million, colleague compensation of $2.8 million and benefits and other of $1.3 million, driven by growth and elevated health plan costs.
41
Other Operating Expenses
Other operating expenses for IAS increased $19.1 million year over year. Partnership activity from CAC Group and Capstone contributed $13.7 million to the increase in other operating expenses in the first quarter of 2026. After excluding partnership activity, other operating expenses increased $5.4 million, primarily due to higher costs for professional fees of $3.3 million from increased legal spend, and technology and software-related costs of $2.3 million.
Amortization Expense
Amortization expense for IAS increased $18.0 million year over year, primarily due to the impact of intangible assets recognized in connection with the CAC Group partnership completed in the first quarter of 2026.
Change in Fair Value of Contingent Consideration
The change in fair value of contingent consideration for IAS was a $0.3 million loss for the first quarter of 2026 compared to a $7.1 million loss for the same period of 2025. The fair value loss for the first quarter of 2026 was impacted by positive changes in revenue growth trends of certain partners.
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 results of operations for the three months ended March 31, 2026 include the results of our Obie partnership.
| For the Three Months Ended March 31, | Variance | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
| Core commissions and fees | $ | 130,811 | $ | 118,815 | $ | 11,996 | 10 | % | ||||||||||||||||||
| Profit-sharing and other income | 2,798 | 5,321 | (2,523) | (47) | % | |||||||||||||||||||||
| Commissions and fees | 133,609 | 124,136 | 9,473 | 8 | % | |||||||||||||||||||||
Investment income | 1,334 | 1,038 | 296 | 29 | % | |||||||||||||||||||||
Total revenues | 134,943 | 125,174 | 9,769 | 8 | % | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Colleague compensation and benefits | 34,240 | 25,009 | 9,231 | 37 | % | |||||||||||||||||||||
| Outside commissions | 57,760 | 61,163 | (3,403) | (6) | % | |||||||||||||||||||||
Other operating expenses | 29,701 | 16,154 | 13,547 | 84 | % | |||||||||||||||||||||
Amortization expense | 10,067 | 4,487 | 5,580 | 124 | % | |||||||||||||||||||||
Change in fair value of contingent consideration | 1,434 | 709 | 725 | 102 | % | |||||||||||||||||||||
Depreciation expense | 169 | 154 | 15 | 10 | % | |||||||||||||||||||||
Total operating expenses | 133,371 | 107,676 | 25,695 | 24 | % | |||||||||||||||||||||
Operating income | 1,572 | 17,498 | (15,926) | (91) | % | |||||||||||||||||||||
Total other income (expense), net | 423 | (134) | 557 | n/m | ||||||||||||||||||||||
| Income before income taxes and share of net earnings of equity method investment | $ | 1,995 | $ | 17,364 | $ | (15,369) | (89) | % | ||||||||||||||||||
__________
n/m not meaningful
42
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 $9.5 million, or 8%, year over year, primarily due to total growth in core commissions and fees of $12.0 million, which includes the Partnership contribution of $8.8 million. Organic growth in core commissions and fees includes $9.9 million from the Captive and $1.4 million from our Capacity Solutions group, offset in part by a $5.7 million reduction in MSI primarily driven by weakness in our E&S home programs as a result of the current property rate environment. In addition, profit sharing and other decreased $2.5 million year over year, driven by a non-recurring profit sharing payment in our real estate investor program received in the prior-year period.
Colleague Compensation and Benefits
Colleague compensation and benefits expense for UCTS increased $9.2 million year over year. Partnership activity contributed $6.6 million to the increase in colleague compensation and benefits in the first quarter of 2026. After excluding partnership activity, colleague compensation and benefits increased $2.6 million as a result of the growth in UCTS and elevated health plan costs.
Outside Commissions
Outside commissions for UCTS decreased $3.4 million, or 6%, year over year. Outside commissions fluxed 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 $13.5 million year over year. Partnership activity contributed $2.5 million to the increase in other operating expenses in the first quarter of 2026. After excluding partnership activity, other operating expenses increased $11.1 million, driven primarily by higher Captive‑related operating expenses of $8.8 million, professional fees of $1.9 million from increased legal spend, and technology and software-related costs of $1.2 million, partially offset by a decrease in licenses and taxes of $1.2 million.
Amortization Expense
Amortization expense for UCTS increased $5.6 million year over year, primarily due to the amortization of intangible assets recognized in connection with the Obie partnership in the first quarter of 2026, as well as higher amortization of internally developed software placed in service over the past year.
Change in Fair Value of Contingent Consideration
The change in fair value of contingent consideration for UCTS was a $1.4 million loss for the first quarter of 2026 compared to a $0.7 million loss for the same period of 2025. The fair value loss for the first quarter of 2026 was impacted by positive changes in revenue growth trends of its partners.
43
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 Three Months Ended March 31, | Variance | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
| Core commissions and fees | $ | 75,864 | $ | 71,650 | $ | 4,214 | 6 | % | ||||||||||||||||||
| Profit-sharing and other income | 5,763 | 6,161 | (398) | (6) | % | |||||||||||||||||||||
| Commissions and fees | 81,627 | 77,811 | 3,816 | 5 | % | |||||||||||||||||||||
| Investment income | 31 | 58 | (27) | (47) | % | |||||||||||||||||||||
| Total revenues | 81,658 | 77,869 | 3,789 | 5 | % | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
| Colleague compensation and benefits | 28,620 | 26,024 | 2,596 | 10 | % | |||||||||||||||||||||
| Outside commissions | 20,266 | 19,087 | 1,179 | 6 | % | |||||||||||||||||||||
Other operating expenses | 8,899 | 9,550 | (651) | (7) | % | |||||||||||||||||||||
Amortization expense | 12,674 | 7,374 | 5,300 | 72 | % | |||||||||||||||||||||
Change in fair value of contingent consideration | 237 | 214 | 23 | 11 | % | |||||||||||||||||||||
Depreciation expense | 206 | 182 | 24 | 13 | % | |||||||||||||||||||||
Total operating expenses | 70,902 | 62,431 | 8,471 | 14 | % | |||||||||||||||||||||
Operating income | 10,756 | 15,438 | (4,682) | (30) | % | |||||||||||||||||||||
| Total other income (expense), net | 66 | (504) | 570 | (113) | % | |||||||||||||||||||||
| Income before income taxes and share of net earnings of equity method investment | $ | 10,822 | $ | 14,934 | $ | (4,112) | (28) | % | ||||||||||||||||||
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 $3.8 million, or 5%, year over year. MIS core commissions and fees increased $4.2 million in total resulting from the recently acquired Hippo’s Homebuilder Distribution Network (accounting for $7.6 million of the increase in core commissions and fees) and our Mainstreet business (accounting for $1.0 million of the increase in core commissions and fees), partially offset by lower core commissions and fees from our Medicare business of $3.4 million and Westwood business of $1.0 million.
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 rolling into the Reciprocal; a temporary headwind that is expected to persist through the first half of 2026 before reversing into a tailwind.
Colleague Compensation and Benefits
Colleague compensation and benefits expense for MIS increased $2.6 million year over year. Partnership activity contributed $1.2 million to the increase in colleague compensation and benefits in the first quarter of 2026. After excluding Partnership activity, colleague compensation and benefits increased $1.4 million due to overall growth in the business and elevated health plan costs.
44
Amortization Expense
MIS amortization expense increased $5.3 million year over year, primarily due to the amortization of intangible assets recognized in connection with a partnership completed in 2025 that is not reflected in our results for the comparative period. The increase also reflects higher amortization of internally developed software placed into service over the past year.
CORPORATE AND OTHER RESULTS
| For the Three Months Ended March 31, | Variance | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Commissions and fees | $ | (16,023) | $ | (18,065) | $ | 2,042 | (11) | % | ||||||||||||||||||
Investment income | 461 | 754 | (293) | (39) | % | |||||||||||||||||||||
Total revenues | (15,562) | (17,311) | 1,749 | (10) | % | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Colleague compensation and benefits | 8,828 | 10,035 | (1,207) | (12) | % | |||||||||||||||||||||
| Outside commissions | (16,023) | (18,065) | 2,042 | (11) | % | |||||||||||||||||||||
Other operating expenses | 145,641 | 11,471 | 134,170 | n/m | ||||||||||||||||||||||
Amortization expense | 764 | 458 | 306 | 67 | % | |||||||||||||||||||||
Depreciation expense | 943 | 944 | (1) | — | % | |||||||||||||||||||||
Total operating expenses | 140,153 | 4,843 | 135,310 | n/m | ||||||||||||||||||||||
Operating loss | (155,715) | (22,154) | (133,561) | n/m | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest expense, net | (38,944) | (29,857) | (9,087) | 30 | % | |||||||||||||||||||||
| Loss on extinguishment and modification of debt | (7,409) | (2,394) | (5,015) | 209 | % | |||||||||||||||||||||
Other income (expense), net | 42 | (80) | 122 | (153) | % | |||||||||||||||||||||
| Total other expense, net | (46,311) | (32,331) | (13,980) | 43 | % | |||||||||||||||||||||
| Loss before income taxes and share of net earnings of equity method investment | $ | (202,026) | $ | (54,485) | $ | (147,541) | n/m | |||||||||||||||||||
__________
n/m not meaningful
Commissions and Fees
Corporate and Other records the elimination of intercompany commission revenue from the operating groups. During the first quarter of 2026, IAS recorded commission revenue shared with other operating groups of $0.2 million, and UCTS recorded commission revenue shared with other operating groups of $15.8 million.
Colleague Compensation and Benefits
Colleague compensation and benefits expense in Corporate and Other decreased $1.2 million year over year, driven by lower colleague compensation for the current period.
Outside Commissions
Outside commissions for Corporate and Other results from the elimination of intercompany commission expense from the operating groups.
45
Other Operating Expenses
Other operating expenses in Corporate and Other increased $134.2 million year over year, driven primarily by higher Tax Receivable Agreement expense of $128.8 million and $7.7 million of transaction-related insurance premiums incurred in connection with the CAC Group partnership. The increase in Tax Receivable Agreement expense relates to the recognition of a liability associated with expected future payments under the agreement. Historically, such amounts were not recorded as we did not expect to realize sufficient cash tax benefits. During the period, changes in our tax profile, including the recognition of deferred tax liabilities and other sources of taxable income, resulted in management concluding that a significant portion of the tax benefits associated with prior exchanges is expected to be realized. Accordingly, we recorded a liability representing its estimated obligation to share such realized tax benefits with Baldwin Holdings’ LLC Members. This amount was recorded to other operating expense as it reflects the recognition of previously unrecorded obligations, while future amounts arising from new redemptions or exchanges will be recorded through stockholders’ equity and subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between our annual tax filing date and the Tax Receivable Agreement payment date, will be recognized in the consolidated statements of comprehensive income (loss).
Interest Expense, Net
Interest expense, net, in Corporate and Other increased $9.1 million year over year, resulting from higher average borrowings, offset in part by a lower average interest rate. 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 $7.4 million for the first quarter of 2026 and $2.4 million for the same period of 2025 relate to debt refinancing transactions completed during the periods.
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 the 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, noncontrolling 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 March 31, 2026, the JPM Credit Agreement provides for senior secured credit facilities in an aggregate principal amount of $2.2 billion, which consists of (i) the Term Loans in the principal amount of $1.6 billion, bearing interest at a rate of term SOFR, plus an applicable margin of 250 bps, maturing May 24, 2031 and (ii) the Revolving Facility with commitments in an aggregate principal amount of $600 million, bearing interest at SOFR plus 185 bps to SOFR plus 260 bps based on total net leverage ratio, maturing May 24, 2029. As of March 31, 2026, we had $191.0 million outstanding under our Revolving Facility and $16.0 million of undrawn letters of credit issued thereunder.
As of March 31, 2026, Baldwin Holdings also had outstanding $600 million aggregate principal amount of 7.125% Senior Secured Notes due May 15, 2031. Refer to Note 10 to our consolidated financial statements included in Part I, Item 1. Financial Statements of this report for more information relating to the terms of the Senior Secured Notes and the JPM Credit Facility.
We utilize a floating-to-fixed interest rate swap agreement to mitigate our exposure to variability in cash flows due to changes in interest rates on our floating-rate debt. The interest rate swap agreement has a notional amount of $500 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.
46
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 have been opportunistically repurchasing our common stock in open market or privately negotiated transactions. 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 March 31, 2026, our cash and cash equivalents were $146.4 million and we had $393 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.
Contractual Obligations and Commitments
The following table represents our contractual obligations and commitments, aggregated by type, at March 31, 2026:
| Payments Due by Period | |||||||||||||||||||||||||||||
| (in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||||||||||
Operating leases(1) | $ | 110,485 | $ | 26,755 | $ | 45,480 | $ | 25,930 | $ | 12,320 | |||||||||||||||||||
Debt obligations payable(2) | 3,177,347 | 168,992 | 335,001 | 499,864 | 2,173,490 | ||||||||||||||||||||||||
Undiscounted estimated contingent earnout obligation(3) | 401,712 | 127,771 | 249,471 | 23,019 | 1,451 | ||||||||||||||||||||||||
| USF Grant | 2,496 | 864 | 1,632 | — | — | ||||||||||||||||||||||||
| Total | $ | 3,692,040 | $ | 324,382 | $ | 631,584 | $ | 548,813 | $ | 2,187,261 | |||||||||||||||||||
(1) Represents noncancelable operating leases for our facilities. Operating lease expense was $6.1 million and $5.3 million for the three months ended March 31, 2026 and 2025, respectively.
(2) Represents scheduled debt obligations 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 March 31, 2026.
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.
Our debt obligations at March 31, 2026 include borrowings outstanding under the Senior Secured Notes of $600 million, the Term Loans of $1.6 billion, and the Revolving Facility of $191.0 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 March 31, 2026 of 7.125%, 6.18% and 6.27%, respectively, through their respective due dates of May 15, 2031, May 24, 2031 and May 24, 2029.
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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 $335.4 million at March 31, 2026 includes $280.1 million that must be settled in cash and the remaining $55.3 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 $401.7 million at March 31, 2026 includes $325.6 million that must be settled in cash and the remaining $76.1 million can be settled in cash or stock at our option. The maximum estimated exposure to the contingent earnout liabilities was $589.4 million at March 31, 2026.
As of March 31, 2026, 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, our Chairman, will fund half of this commitment.
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.
Due to the uncertainty of various factors, we cannot precisely quantify the likely tax benefits we will realize as a result of the LLC Unit exchanges and the resulting amounts we are likely to pay out to current and certain former Baldwin Holdings’ LLC Members pursuant to the Tax Receivable Agreement; however, we estimate that such tax benefits and the related Tax Receivable Agreement payments may be substantial. The estimate of the Tax Receivable Agreement liability recorded assumes no changes in the relevant tax law and that we earn sufficient taxable income to realize all cash tax savings that are subject to the Tax Receivable Agreement. We have recognized a Tax Receivable Agreement liability of $144.6 million on the consolidated balance sheet as of March 31, 2026 based on the undiscounted estimated future payments under the Tax Receivable Agreement. We expect to fund future Tax Receivable Agreement payments with tax distributions from Baldwin Holdings that come from cash on hand and cash generated from operations.
Future payments with respect to subsequent exchanges would be in addition to these amounts and are expected to be substantial. The Tax Receivable Agreement liability recorded is an estimate and the actual payments could differ materially. In the highly unlikely event of an early termination of the Tax Receivable Agreement, we are required to pay to each holder of the Tax Receivable Agreement an early termination payment equal to the discounted present value of all unpaid Tax Receivable Agreement payments. We have not made, and are not likely to make, an election for an early termination.
Sources and Uses of Cash
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated:
| For the Three Months Ended March 31, | |||||||||||||||||
| (in thousands) | 2026 | 2025 | Variance | ||||||||||||||
| Net cash used in operating activities | $ | (6,073) | $ | (63,983) | $ | 57,910 | |||||||||||
| Net cash used in investing activities | (491,204) | (8,612) | (482,592) | ||||||||||||||
| Net cash provided by financing activities | 606,501 | 58,887 | 547,614 | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents and fiduciary cash | 109,224 | (13,708) | 122,932 | ||||||||||||||
| Cash and cash equivalents and fiduciary cash at beginning of period | 346,897 | 312,769 | 34,128 | ||||||||||||||
| Cash and cash equivalents and fiduciary cash at end of period | $ | 456,121 | $ | 299,061 | $ | 157,060 | |||||||||||
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Operating Activities
The primary sources and uses of cash for operating activities are net income (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 decreased $57.9 million year over year, primarily as a result of a $72.3 million decrease 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 $482.6 million year over year, driven by an increase in cash consideration paid for partnership activity of $477.4 million.
Financing Activities
The primary sources and uses of cash for financing activities relate to the issuance and repurchase 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 $547.6 million year over year, driven by an increase in net proceeds from borrowings on our credit facilities of $575.8 million, primarily resulting from refinancing our Term Loans and additional borrowings made on the Revolving Facility to fund partnerships during the first quarter of 2026, and a decrease in earnout payments of $32.8 million, partially offset by decreases in cash of $47.0 million related to repurchases of our common stock and $12.1 million related to the change in fiduciary receivables and liabilities.
CRITICAL ACCOUNTING 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 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.
We have added Tax Receivable Agreement liabilities as a critical accounting estimate during the three months ended March 31, 2026. In addition, we have removed the valuation allowance for deferred tax assets from our critical accounting estimates. Refer to Note 14 of Part I, Item 1. Financial Statements of this report for a discussion of the events leading to the change in our critical accounting estimates. Other than the foregoing, there have been no other material changes in our critical accounting policies during the three months ended March 31, 2026 as compared to those disclosed in the Critical Accounting Policies and Estimates section under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2025.
Tax Receivable Agreement Liabilities
We are a party to the Tax Receivable Agreement with Baldwin Holdings’ LLC Members, which 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) an increase in the tax basis of Baldwin Holdings’ assets resulting from (a) previous acquisitions of Baldwin Holdings’ LLC Units by Baldwin, (b) the acquisition of Baldwin Holdings’ LLC Units by Baldwin using the net proceeds from any future offering, (c) redemptions or exchanges of Baldwin Holdings’ 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. 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.
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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 of Baldwin Holdings’ assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending on 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 taxable income, the tax rates then applicable and the portion of our payments under the Tax Receivable Agreement constituting imputed interest.
While the actual calculation of the Tax Receivable Agreement liability does not include significant judgments and uncertainties, the amount of the Tax Receivable Agreement payments and the timing of when they occur does require judgment regarding the timing and generation of future taxable income. Ultimately, the recognition of a Tax Receivable Agreement liability is dependent upon whether or not we generate sufficient taxable income to realize cash tax savings as defined by the Tax Receivable Agreement. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to realize cash tax savings, then we would not be required to make the related Tax Receivable Agreement payments. Therefore, we only recognize a liability for Tax Receivable Agreement payments if we determine it is probable that we will generate sufficient future taxable income over the term of the Tax Receivable Agreement to realize cash tax savings.
Projecting future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, we consider our historical results and incorporate assumptions from our management’s forecasts and budgets, as well as longer-term assumptions, including revenue growth and operating margins, among other factors.
During the three months ended March 31, 2026, in part due to estimated future taxable income from the deferred tax liabilities recorded as part of our acquisitions of the CAC Group and Obie, we determined that the Tax Receivable Agreement liabilities associated with tax basis increases generated to date was probable of being payable. Accordingly, we recorded Tax Receivable Agreement liabilities equal to 85% of the tax benefits expected to be realized from the redemptions. We anticipate having sufficient taxable income to be able to realize the benefits and have recorded Tax Receivable Agreement liabilities based on the undiscounted estimated future payments under the Tax Receivable Agreement of $144.6 million.
RECENT ACCOUNTING PRONOUNCEMENTS
Please refer to Note 1 to our condensed consolidated financial statements included in Part I, Item 1. Financial Statements of this report for a discussion of recent accounting pronouncements that may impact us.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the potential loss arising from adverse changes in market rates and prices, such as premium amounts, interest rates and equity prices. We are exposed to market risk through our investments and borrowings under the JPM Credit Facility. We use derivative instruments to mitigate our risk related to the effect of rising interest rates on our cash flows. However, we do not use derivative instruments for trading or speculative purposes.
Our invested assets are held primarily as cash and cash equivalents and restricted cash. To a lesser extent, we may also utilize certificates of deposit, U.S. treasury securities and professionally managed short duration fixed income funds. These investments are subject to market risk. The fair value of our invested assets at March 31, 2026 and December 31, 2025 approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material.
During January 2026, we entered into additional financing for the Incremental Term Loans, which provided $600 million of additional principal borrowings, thereby increasing the aggregate principal amount of our Term Loans under the JPM Credit Agreement to approximately $1.6 billion.
We have a floating-to-fixed interest rate swap agreement with a notional amount of $500 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%. 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. This strategy provides predictability in interest expense and aligns with our risk management policy.
At March 31, 2026, we had outstanding borrowings of $1.6 billion under the Term Loans and $191.0 million under our Revolving Facility. Taking the interest rate swap into consideration, an increase of 100 basis points on the SOFR rate at March 31, 2026 would have increased our annual interest expense under the JPM Credit Facility by $12.9 million.
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Other than the amendment to the JPM Credit Agreement to increase the aggregate principal amount of the Term Loans to $1.6 billion, there have been no material changes in market risk from the information presented in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of March 31, 2026 to provide reasonable assurance that information required to be disclosed by us in the reports that 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 senior management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Please refer to Note 17 to our condensed consolidated financial statements included in Part I, Item 1. Financial Statements of this report for a discussion of legal proceedings to which we are subject.
ITEM 1A. RISK FACTORS
Please refer to the risk factors outlined under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 26, 2026.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Sales of Unregistered Securities
The following list sets forth information regarding all unregistered securities sold or issued by us during the current year. No underwriters were involved in these sales. There was no general solicitation of investors or advertising, and we did not pay or give, directly or indirectly, any commission or other remuneration, in connection with the offering of these securities. In the transactions described below, the recipients of the securities represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions.
•On January 2, 2026, as partial consideration for the acquisition of the outstanding equity interests of the business of Cobbs Allen Capital Holdings, LLC, Baldwin issued 23,200,000 shares of Class A common stock.
•On January 2, 2026, as partial consideration for the acquisition of the outstanding equity interests of Creisoft, Inc., Baldwin issued 396,573 shares of Class A common stock.
•On January 2, 2026, as partial consideration for the acquisition of substantially all the assets of Foley Insurance Agency, Inc., doing business as Capstone Group, Baldwin issued 354,448 shares of Class A common stock.
The securities described above were issued to a limited number of investors, all of which had sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment, and for nominal consideration. The offer, sale and issuance of the securities described above were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act as transactions by an issuer not involving any public offering.
Issuer Repurchases of Equity Securities
The following table provides information about our repurchase of shares of our Class A common stock during the three months ended March 31, 2026:
Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Value that may yet be Purchased under the Plans or Programs (in thousands) | ||||||||||||||||||||
| January 1, 2026 to January 31, 2026 | 45,578 | $ | 24.03 | — | $ | 250,000 | |||||||||||||||||
| February 1, 2026 to February 28, 2026 | 77,280 | 16.87 | — | 250,000 | |||||||||||||||||||
| March 1, 2026 to March 31, 2026 | 2,627,595 | 21.38 | 2,193,429 | 203,034 | |||||||||||||||||||
| Total | 2,750,453 | $ | 21.30 | 2,193,429 | $ | 203,034 | |||||||||||||||||
__________
(1) We purchased 557,024 shares during the three months ended March 31, 2026, which were acquired from our employees to cover required tax withholding on the vesting of shares granted under our Omnibus Incentive Plan or Partnership Inducement Award Plan.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5. OTHER INFORMATION
Insider Trading Arrangements and Policies
During the quarter ended March 31, 2026, none of our directors or officers adopted, modified terminated
ITEM 6. EXHIBITS
The following exhibits are filed as a part of this Quarterly Report on Form 10-Q:
| Exhibit No. | Description of Exhibit | |||||||
| 3.1 | Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2019). | |||||||
| 3.2 | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 15, 2020). | |||||||
| 3.3 | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.3 of the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2024). | |||||||
| 3.4 | Second Amended and Restated By-Laws of the Company (incorporated herein by reference to Exhibit 3.4 of the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2024). | |||||||
| 3.5 | First Amendment to the Second Amended and Restated By-laws of The Baldwin Insurance Group, Inc. (incorporated herein by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2024). | |||||||
| 10.1 | Amendment No. 4 to Amended and Restated Credit Agreement, dated as of January 2, 2026, by and among The Baldwin Insurance Group Holdings, LLC, the Guarantors party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated herein by reference to Exhibit 10.2 of the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 2, 2026). | |||||||
| 10.2 | Voting Agreement, dated January 1, 2026, by and among The Baldwin Insurance Group, Inc. and the seller parties thereto (incorporated herein by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 2, 2026). | |||||||
| 31.1* | Certification of the Registrant’s Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 | |||||||
| 31.2* | Certification of the Registrant’s Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 | |||||||
| 32** | Certification of the Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 101.INS* | Inline XBRL Instance Document - the Instance document does not appear in the Interactive Data file because XBRL tags are embedded within the Inline XBRL document | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
__________
* Filed herewith
** Furnished herewith and as such are deemed not “filed” for purposes of Section 18 of the Exchange Act, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| The Baldwin Insurance Group, Inc. | ||||||||
| Date: May 4, 2026 | By: | /s/ Trevor L. Baldwin | ||||||
| Trevor L. Baldwin | ||||||||
Chief Executive Officer | ||||||||
| Date: May 4, 2026 | By: | /s/ Bradford L. Hale | ||||||
| Bradford L. Hale | ||||||||
Chief Financial Officer | ||||||||
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FAQ
How did Baldwin Insurance Group (BWIN) perform in the quarter ended March 31, 2026?
Baldwin Insurance Group delivered higher revenue but a small net loss. Revenue reached $532,235k versus $413,405k a year earlier, while it reported a net loss of $1,896k and net income attributable to Baldwin shareholders of $2,341k, reflecting heavy acquisition and financing costs.
What major acquisitions did Baldwin Insurance Group (BWIN) complete in early 2026?
The company closed three transactions: CAC Group, Obie (Creisoft, Inc.) and Capstone. Total consideration was $1,564,486k, including $572,763k cash, $315,998k contingent earnouts, $510,561k equity, and $165,164k deferred payments, significantly expanding capabilities and geographic reach.
How did Baldwin Insurance Group’s (BWIN) balance sheet change after the acquisitions?
Total assets increased to $5,942,628k from $3,862,220k, driven by goodwill of $2,652,131k and intangible assets of $1,484,739k. Long-term debt rose to $2,197,068k (net of issuance costs), and total stockholders’ equity attributable to Baldwin grew to $963,940k.
What is Baldwin Insurance Group’s (BWIN) current debt structure and interest cost?
Baldwin’s borrowings include $1,600,000k in term loans, $600,000k of 7.125% Senior Secured Notes due May 15, 2031, and $191,000k under a revolving facility. For the quarter, it incurred net interest expense of $38,900k, reflecting higher leverage after recent financings.
Why did Baldwin Insurance Group (BWIN) record a large income tax benefit in Q1 2026?
The company booked an income tax benefit of $144,521k mainly from releasing $167,100k of a prior valuation allowance on deferred tax assets. New deferred tax liabilities of about $142,200k from the CAC Group and Obie acquisitions provided sufficient future taxable income support.
How much cash did Baldwin Insurance Group (BWIN) generate or use in operations in Q1 2026?
Operating activities used $6,073k of cash during the quarter. Non-cash items such as $57,078k of depreciation and amortization and changes in working capital offset the small net loss, while movements in receivables and taxes contributed to overall operating cash outflow.
What role do contingent earnout liabilities play in Baldwin Insurance Group’s (BWIN) results?
Contingent earnout liabilities tied to acquired businesses totaled $335,384k at March 31, 2026, up from $23,293k. The fair value change added $1,969k of expense this quarter. Actual future payments will depend on acquired partners’ performance against revenue and adjusted EBITDA targets.