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The Baldwin Group Announces Third Quarter 2024 Results

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The Baldwin Group (NASDAQ: BWIN) reported Q3 2024 results with total revenue growing 11% to $338.9 million and organic revenue growth of 14%. Despite posting a GAAP net loss of $14.5 million ($0.13 per share), the company showed strong adjusted metrics with adjusted diluted EPS growing 14% to $0.33. Adjusted EBITDA increased 14% to $72.8 million with a margin of 21.5%, expanding 60 basis points year-over-year. For the nine months of 2024, revenue reached $1.1 billion, up 13%, with organic growth of 16%. The company maintained strong liquidity with $181.8 million in cash and $600.0 million available under its credit facility.

Il Baldwin Group (NASDAQ: BWIN) ha riportato i risultati del terzo trimestre 2024, con un incremento del fatturato totale del 11% a 338,9 milioni di dollari e una crescita del fatturato organico del 14%. Nonostante un perdita netta GAAP di 14,5 milioni di dollari (0,13 dollari per azione), l'azienda ha mostrato metriche corrette molto solide, con un utile per azione diluito corretto che è cresciuto del 14% a $0,33. L’EBITDA corretto è aumentato del 14% a $72,8 milioni, con un margine del 21,5%, che si espande di 60 punti base anno su anno. Nei nove mesi del 2024, il fatturato ha raggiunto 1,1 miliardi di dollari, in aumento del 13%, con una crescita organica del 16%. L'azienda ha mantenuto una forte liquidità con 181,8 milioni di dollari in contanti e 600,0 milioni di dollari disponibili attraverso la sua linea di credito.

El Grupo Baldwin (NASDAQ: BWIN) informó los resultados del tercer trimestre de 2024, con un aumento del 11% en los ingresos totales a 338,9 millones de dólares y un crecimiento de ingresos orgánicos del 14%. A pesar de reportar una pérdida neta GAAP de 14,5 millones de dólares (0,13 dólares por acción), la compañía mostró métricas ajustadas sólidas, con un EPS diluido ajustado que creció un 14% a 0,33 dólares. El EBITDA ajustado aumentó un 14% a 72,8 millones de dólares, con un margen del 21,5%, ampliándose en 60 puntos básicos en comparación con el año anterior. Durante los nueve meses de 2024, los ingresos alcanzaron 1,1 mil millones de dólares, un aumento del 13%, con un crecimiento orgánico del 16%. La compañía mantuvo una fuerte liquidez con 181,8 millones de dólares en efectivo y 600,0 millones de dólares disponibles bajo su línea de crédito.

발드윈 그룹 (NASDAQ: BWIN)은 2024년 3분기 실적을 보고했으며, 총 수익이 11% 증가하여 3억 3,890만 달러에 이르렀고, 유기적 수익 성장률이 14%에 달했습니다. GAAP 기준으로 1,450만 달러(주당 0.13달러)의 순손실을 기록했음에도 불구하고, 회사는 조정된 메트릭에서 견고한 성과를 보여주었으며, 조정된 희석 주당순이익(EPS)은 14% 증가하여 0.33달러에 달했습니다. 조정된 EBITDA는 14% 증가하여 7,280만 달러를 기록했으며, 마진은 21.5%로 전년 대비 60베이시스 포인트 확대되었습니다. 2024년 9개월 동안 매출은 11억 달러에 달해 13% 증가했으며, 유기적 성장률은 16%에 이릅니다. 회사는 1억 8,180만 달러의 현금과 6억 달러의 신용 시설 예산으로 강력한 유동성을 유지했습니다.

Le Groupe Baldwin (NASDAQ: BWIN) a annoncé les résultats du troisième trimestre 2024, avec un chiffre d'affaires total en hausse de 11% à 338,9 millions de dollars et une croissance organique des revenus de 14%. Bien qu'une perte nette GAAP de 14,5 millions de dollars (0,13 dollar par action) ait été enregistrée, la société a montré des indicateurs ajustés solides, avec un BPA ajusté dilué en hausse de 14% à 0,33 dollar. EBITDA ajusté a augmenté de 14% pour atteindre 72,8 millions de dollars, avec une marge de 21,5%, s'élargissant de 60 points de base par rapport à l'année précédente. Au cours des neuf premiers mois de 2024, le chiffre d'affaires a atteint 1,1 milliard de dollars, en hausse de 13%, avec une croissance organique de 16%. La société a maintenu une solide liquidité avec 181,8 millions de dollars en espèces et 600,0 millions de dollars disponibles dans le cadre de sa ligne de crédit.

Die Baldwin Group (NASDAQ: BWIN) hat die Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit einem Gesamtumsatzwachstum von 11% auf 338,9 Millionen US-Dollar und einem organischen Umsatzwachstum von 14%. Trotz eines GAAP-Nettoverlusts von 14,5 Millionen US-Dollar (0,13 US-Dollar pro Aktie) zeigte das Unternehmen starke angepasste Kennzahlen, mit einem um 14% gesteigerten bereinigten verwässerten EPS von 0,33 US-Dollar. Bereinigtes EBITDA stieg um 14% auf 72,8 Millionen US-Dollar, mit einer Marge von 21,5%, die um 60 Basispunkte im Jahresvergleich zugenommen hat. In den neun Monaten des Jahres 2024 erreichte der Umsatz 1,1 Milliarden US-Dollar, was einem Anstieg von 13% entspricht, mit einem organischen Wachstum von 16%. Das Unternehmen behielt eine starke Liquidität mit 181,8 Millionen US-Dollar in bar und 600,0 Millionen US-Dollar, die über seine Kreditlinie verfügbar sind.

Positive
  • Revenue growth of 11% to $338.9 million
  • Strong organic revenue growth of 14%
  • Adjusted EBITDA growth of 14% to $72.8 million
  • Adjusted EBITDA margin expansion of 60 basis points to 21.5%
  • Adjusted free cash flow growth of 31% to $99.2 million
  • Available credit facility of $600 million
Negative
  • GAAP net loss of $14.5 million in Q3 2024
  • Diluted loss per share of $0.13

Insights

Strong quarterly performance with $338.9M in revenue, showing 11% YoY growth and impressive 14% organic growth. The adjusted EBITDA margin expansion of 21.5% demonstrates operational efficiency improvements. While GAAP shows a $14.5M net loss, adjusted metrics paint a more positive picture with $38.5M adjusted net income.

The company maintains a robust liquidity position with $181.8M cash and $600M available credit facility. Nine-month results are particularly strong, with $1.1B revenue (13% growth) and 16% organic growth. The 31% increase in adjusted free cash flow to $99.2M indicates healthy operational cash generation.

The margin expansion trend and strong organic growth suggest effective pricing power and market share gains in the insurance distribution sector.

The insurance distribution sector is showing resilience amid market challenges, with Baldwin's performance indicating strong market positioning. The 14% organic growth significantly outpaces industry averages, suggesting market share gains and successful execution of growth strategies.

The expansion in EBITDA margins points to successful operational optimization and pricing power. The company's ability to maintain double-digit growth while improving profitability metrics demonstrates effective scale benefits and strong competitive positioning in the insurance distribution market.

- Total Revenue Growth of 11% to $338.9 Million; Organic Revenue Growth(1) of 14% -

- Net Loss of $14.5 Million and Diluted Loss Per Share of $0.13; Adjusted Diluted EPS(2) Growth of 14% to $0.33 -

- Adjusted EBITDA(3) Growth of 14% and Pro Forma Adjusted EBITDA(4) Growth of 18% Year-Over-Year to $72.8 Million and Adjusted EBITDA Margin(3) of 21%; 60 Basis Point Expansion Compared to the Prior-Year Period -

TAMPA, Fla.--(BUSINESS WIRE)-- The Baldwin Group, the brand name for The Baldwin Insurance Group, Inc. (“Baldwin” or the “Company”) (NASDAQ: BWIN), an independent insurance distribution firm delivering tailored insurance solutions to a wide range of personal and commercial Clients, today announced its results for the third quarter ended September 30, 2024.

THIRD QUARTER 2024 HIGHLIGHTS

  • Total revenue increased 11% year-over-year to $338.9 million
  • Organic revenue growth of 14% year-over-year
  • GAAP net loss of $14.5 million and GAAP diluted loss per share of $0.13
  • Adjusted net income(2) of $38.5 million
  • Adjusted diluted EPS grew 14% year-over-year to $0.33
  • Adjusted EBITDA grew 14% year-over-year to $72.8 million
  • Adjusted EBITDA margin of 21.5%, a 60 basis point expansion compared to 20.9% in the prior-year period
  • Pro forma adjusted EBITDA grew 18% year-over-year to $72.8 million

“We delivered another strong quarter highlighting the resiliency of our business model in what has been an outstanding year for The Baldwin Group,” said Trevor Baldwin, Chief Executive Officer of The Baldwin Group. “We once again generated industry-leading double-digit organic growth and continued to expand our adjusted EBITDA margin and adjusted free cash flow, driven by a relentless focus on operational effectiveness and efficiency. Our team’s fantastic execution over the past couple years, along with our considerably stronger financial profile, has positioned us exceedingly well for sustained long-term growth and margin expansion.”

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2024, cash and cash equivalents were $181.8 million and the Company had $600.0 million of borrowing capacity under its revolving credit facility.

NINE MONTHS 2024 RESULTS

  • Revenue increased 13% year-over-year to $1.1 billion
  • Organic revenue growth of 16% year-over-year
  • GAAP net loss of $6.2 million and GAAP diluted loss per share of $0.07
  • Adjusted net income of $144.8 million
  • Adjusted diluted EPS grew 26% year-over-year to $1.23
  • Adjusted EBITDA grew 22% year-over-year to $249.3 million
  • Adjusted EBITDA margin of 23.5%, a 160 basis point expansion compared to 21.9% in the prior-year period
  • Pro forma adjusted EBITDA grew 24% year-over-year to $247.7 million
  • Net cash provided by operating activities of $85.7 million
  • Adjusted free cash flow(5) grew 31% year-over-year to $99.2 million

WEBCAST AND CONFERENCE CALL INFORMATION

Baldwin will host a webcast and conference call to discuss third quarter 2024 results today at 5:00 PM ET. A live webcast and a slide presentation of the conference call will be available on Baldwin’s investor relations website at ir.baldwin.com. The dial-in number for the conference call is (877) 451-6152 (toll-free) or (201) 389-0879 (international). Please dial the number 10 minutes prior to the scheduled start time.

A webcast replay of the call will be available at ir.baldwin.com for one year following the call.

ABOUT THE BALDWIN GROUP

The Baldwin Group, the brand name for The Baldwin Insurance Group, Inc. (NASDAQ: BWIN) and its affiliates, 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. The Baldwin Group proudly represents more than two million Clients across the United States and internationally. For more information, please visit www.baldwin.com.

FOOTNOTES

(1) Organic revenue for the three and nine months ended September 30, 2023 used to calculate organic revenue growth for the three and nine months ended September 30, 2024 was $294.5 million and $905.6 million, respectively, which is adjusted to exclude commissions and fees from divestitures that occurred during 2024. Organic revenue and organic revenue growth are non-GAAP measures. Reconciliation of organic revenue and organic revenue growth to commissions and fees, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

(2) Adjusted net income and adjusted diluted EPS are non-GAAP measures. Reconciliation of adjusted net income to net loss attributable to Baldwin and reconciliation of adjusted diluted EPS to diluted loss per share, the most directly comparable GAAP financial measures, is set forth in the reconciliation table accompanying this release.

(3) Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. Reconciliation of adjusted EBITDA and adjusted EBITDA margin to net loss, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

(4) Pro Forma Adjusted EBITDA is a non-GAAP measure. Reconciliation of Pro Forma Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

(5) Adjusted free cash flow is a non-GAAP measure. Reconciliation of adjusted free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Baldwin’s expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or Baldwin’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” or the negative of these terms or other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, those described under the caption “Risk Factors” in Baldwin’s Annual Report on Form 10-K for the year ended December 31, 2023 and in Baldwin’s other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov, including those risks and other factors relevant to the business, financial condition and results of operations of Baldwin. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to Baldwin or to persons acting on behalf of Baldwin are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and Baldwin does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law.

THE BALDWIN INSURANCE GROUP, INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

 

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

(in thousands, except share and per share data)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

Commissions and fees

 

$

335,210

 

 

$

304,232

 

 

$

1,050,409

 

 

$

929,306

 

Investment income

 

 

3,728

 

 

 

2,038

 

 

 

8,736

 

 

 

4,601

 

Total revenues

 

 

338,938

 

 

 

306,270

 

 

 

1,059,145

 

 

 

933,907

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Commissions, employee compensation and benefits

 

 

247,189

 

 

 

220,469

 

 

 

753,596

 

 

 

676,659

 

Other operating expenses

 

 

48,839

 

 

 

47,165

 

 

 

141,198

 

 

 

141,254

 

Amortization expense

 

 

26,899

 

 

 

23,183

 

 

 

76,334

 

 

 

69,505

 

Change in fair value of contingent consideration

 

 

(952

)

 

 

13,914

 

 

 

17,276

 

 

 

55,065

 

Depreciation expense

 

 

1,557

 

 

 

1,453

 

 

 

4,619

 

 

 

4,250

 

Total operating expenses

 

 

323,532

 

 

 

306,184

 

 

 

993,023

 

 

 

946,733

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

15,406

 

 

 

86

 

 

 

66,122

 

 

 

(12,826

)

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(31,329

)

 

 

(30,580

)

 

 

(94,203

)

 

 

(87,600

)

Gain on divestitures

 

 

1,809

 

 

 

 

 

 

38,953

 

 

 

 

Loss on extinguishment and modification of debt

 

 

(389

)

 

 

 

 

 

(15,068

)

 

 

 

Other income (expense), net

 

 

28

 

 

 

(1,351

)

 

 

105

 

 

 

(193

)

Total other expense, net

 

 

(29,881

)

 

 

(31,931

)

 

 

(70,213

)

 

 

(87,793

)

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(14,475

)

 

 

(31,845

)

 

 

(4,091

)

 

 

(100,619

)

Income tax expense

 

 

 

 

 

161

 

 

 

2,151

 

 

 

904

 

Net loss

 

 

(14,475

)

 

 

(32,006

)

 

 

(6,242

)

 

 

(101,523

)

Less: net loss attributable to noncontrolling interests

 

 

(6,098

)

 

 

(14,377

)

 

 

(1,886

)

 

 

(45,865

)

Net loss attributable to Baldwin

 

$

(8,377

)

 

$

(17,629

)

 

$

(4,356

)

 

$

(55,658

)

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$

(14,475

)

 

$

(32,006

)

 

$

(6,242

)

 

$

(101,523

)

Comprehensive loss attributable to noncontrolling interests

 

 

(6,098

)

 

 

(14,377

)

 

 

(1,886

)

 

 

(45,865

)

Comprehensive loss attributable to Baldwin

 

 

(8,377

)

 

 

(17,629

)

 

 

(4,356

)

 

 

(55,658

)

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

 

$

(0.13

)

 

$

(0.29

)

 

$

(0.07

)

 

$

(0.93

)

Basic and diluted weighted-average shares of Class A common stock outstanding

 

 

64,011,515

 

 

 

60,549,080

 

 

 

63,001,125

 

 

 

59,791,435

 

THE BALDWIN INSURANCE GROUP, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

 

(in thousands, except share and per share data)

 

September 30, 2024

 

December 31, 2023

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

181,759

 

 

$

116,209

 

Restricted cash

 

 

162,957

 

 

 

104,824

 

Premiums, commissions and fees receivable, net

 

 

656,111

 

 

 

627,791

 

Prepaid expenses and other current assets

 

 

13,454

 

 

 

12,730

 

Assets held for sale

 

 

 

 

 

64,351

 

Total current assets

 

 

1,014,281

 

 

 

925,905

 

Property and equipment, net

 

 

21,263

 

 

 

22,713

 

Right-of-use assets

 

 

74,960

 

 

 

85,473

 

Other assets

 

 

47,356

 

 

 

38,134

 

Intangible assets, net

 

 

968,811

 

 

 

1,017,343

 

Goodwill

 

 

1,412,369

 

 

 

1,412,369

 

Total assets

 

$

3,539,040

 

 

$

3,501,937

 

Liabilities, Mezzanine Equity and Stockholders Equity

 

 

 

 

Current liabilities:

 

 

 

 

Premiums payable to insurance companies

 

$

589,157

 

 

$

555,569

 

Producer commissions payable

 

 

71,179

 

 

 

64,304

 

Accrued expenses and other current liabilities

 

 

164,302

 

 

 

152,954

 

Related party notes payable

 

 

5,635

 

 

 

1,525

 

Current portion of contingent earnout liabilities

 

 

201,281

 

 

 

215,157

 

Liabilities held for sale

 

 

 

 

 

43,931

 

Total current liabilities

 

 

1,031,554

 

 

 

1,033,440

 

Revolving line of credit

 

 

 

 

 

341,000

 

Long-term debt, less current portion

 

 

1,399,010

 

 

 

968,183

 

Contingent earnout liabilities, less current portion

 

 

2,509

 

 

 

61,310

 

Operating lease liabilities, less current portion

 

 

69,235

 

 

 

78,999

 

Other liabilities

 

 

123

 

 

 

123

 

Total liabilities

 

 

2,502,431

 

 

 

2,483,055

 

Commitments and contingencies

 

 

 

 

Mezzanine equity:

 

 

 

 

Redeemable noncontrolling interest

 

 

375

 

 

 

394

 

Stockholders’ equity:

 

 

 

 

Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 67,536,347 and 64,133,950 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

 

 

675

 

 

 

641

 

Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 50,013,563 and 52,422,494 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

785,931

 

 

 

746,671

 

Accumulated deficit

 

 

(191,261

)

 

 

(186,905

)

Total stockholders’ equity attributable to Baldwin

 

 

595,350

 

 

 

560,412

 

Noncontrolling interest

 

 

440,884

 

 

 

458,076

 

Total stockholders’ equity

 

 

1,036,234

 

 

 

1,018,488

 

Total liabilities, mezzanine equity and stockholders’ equity

 

$

3,539,040

 

 

$

3,501,937

 

THE BALDWIN INSURANCE GROUP, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

For the Nine Months

Ended September 30,

(in thousands)

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(6,242

)

 

$

(101,523

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

80,953

 

 

 

73,755

 

Change in fair value of contingent consideration

 

 

17,276

 

 

 

55,065

 

Share-based compensation expense

 

 

46,764

 

 

 

46,637

 

Payment of contingent earnout consideration in excess of purchase price accrual

 

 

(21,145

)

 

 

(22,639

)

Gain on divestitures

 

 

(38,953

)

 

 

 

Amortization of deferred financing costs

 

 

4,419

 

 

 

3,577

 

Loss on extinguishment of debt

 

 

1,034

 

 

 

 

Loss on interest rate caps

 

 

244

 

 

 

489

 

Other loss

 

 

346

 

 

 

797

 

Changes in operating assets and liabilities:

 

 

 

 

Premiums, commissions and fees receivable, net

 

 

(27,777

)

 

 

(63,367

)

Prepaid expenses and other current assets

 

 

(7,980

)

 

 

(6,294

)

Right-of-use assets

 

 

12,562

 

 

 

7,671

 

Accounts payable, accrued expenses and other current liabilities

 

 

35,395

 

 

 

32,793

 

Operating lease liabilities

 

 

(11,188

)

 

 

(4,162

)

Net cash provided by operating activities

 

 

85,708

 

 

 

22,799

 

Cash flows from investing activities:

 

 

 

 

Proceeds from divestitures, net of cash transferred

 

 

56,977

 

 

 

 

Capital expenditures

 

 

(28,897

)

 

 

(14,157

)

Investments in and loans for business ventures

 

 

(3,703

)

 

 

(673

)

Proceeds from repayment of related party loans

 

 

1,500

 

 

 

 

Cash consideration paid for asset acquisitions

 

 

(268

)

 

 

(2,118

)

Net cash provided by (used in) investing activities

 

 

25,609

 

 

 

(16,948

)

Cash flows from financing activities:

 

 

 

 

Payment of contingent earnout consideration up to amount of purchase price accrual

 

 

(64,698

)

 

 

(26,808

)

Proceeds from revolving line of credit

 

 

95,000

 

 

 

88,000

 

Payments on revolving line of credit

 

 

(436,000

)

 

 

(269,000

)

Proceeds from refinancing of long-term debt

 

 

1,440,000

 

 

 

170,000

 

Payments relating to extinguishment and modification of long-term debt

 

 

(996,177

)

 

 

 

Payments on long-term debt

 

 

(4,661

)

 

 

(6,815

)

Payments of deferred financing costs

 

 

(17,988

)

 

 

(4,447

)

Proceeds from the settlement of interest rate caps

 

 

2,300

 

 

 

7,893

 

Tax distributions to Baldwin Holdings LLC members

 

 

(11,076

)

 

 

(408

)

Distributions to variable interest entities

 

 

(264

)

 

 

(385

)

Proceeds from repayment of stockholder notes receivable

 

 

 

 

 

42

 

Net cash provided by (used in) financing activities

 

 

6,436

 

 

 

(41,928

)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

117,753

 

 

 

(36,077

)

Cash and cash equivalents and restricted cash at beginning of period

 

 

226,963

 

 

 

230,471

 

Cash and cash equivalents and restricted cash at end of period

 

$

344,716

 

 

$

194,394

 

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA, adjusted EBITDA margin, organic revenue, organic revenue growth, adjusted net income, adjusted diluted earnings per share (“EPS”), pro forma revenue, pro forma adjusted EBITDA, pro forma adjusted EBITDA margin and adjusted net cash provided by operating activities (“adjusted free cash flow”) 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), revenues (for pro forma revenue), net income (loss) (for adjusted EBITDA, adjusted EBITDA margin, pro forma adjusted EBITDA and pro forma adjusted EBITDA margin), net income (loss) attributable to Baldwin (for adjusted net income), diluted earnings (loss) per share (for adjusted diluted EPS) or net cash provided by (used in) operating activities (for adjusted free cash flow), 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, net cash provided by (used in) operating activities 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, 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 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 twelve 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 twelve-month owned mark, but which have reached the twelve-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, 2023 are excluded from organic revenue for 2023. However, after June 1, 2024, results from June 1, 2023 to December 31, 2023 for such Partners are compared to results from June 1, 2024 to December 31, 2024 for purposes of calculating organic revenue growth in 2024. Organic revenue growth is a key metric used by management and our board of directors to assess our financial performance. We believe that organic revenue and organic revenue growth are appropriate measures of operating performance as they allow investors to measure, analyze and compare growth in a meaningful and consistent manner.

We define adjusted 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, 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.

The pro forma information presented herein removes the effects of 2024 divestitures for all periods in 2024 and 2023 as if the divestitures had occurred on January 1, 2024 and January 1, 2023, respectively. Pro forma revenue reflects GAAP revenues less revenue derived from business divestitures that occurred during 2024.

Pro forma net income (loss) reflects GAAP net income (loss) less net income derived from business divestitures that occurred during 2024, including the gain on divestitures. We define Pro forma adjusted EBITDA as pro forma 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, severance, and certain non-recurring costs, including those related to raising capital, after removing the effect of divestitures that occurred during 2024. We believe that pro forma adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to ongoing business performance, and that the presentation of this measure enhances an investor’s understanding of our financial performance.

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

We calculate adjusted free cash flow because we hold fiduciary cash designated for our Insurance Company Partners on behalf of our Clients and incur substantial earnout liabilities in conjunction with our Partnership strategy. Adjusted free cash flow is calculated as net cash provided by (used in) operating activities excluding the impact of: (i) the change in premiums, commissions and fees receivable, net; (ii) the change in accounts payable, accrued expenses and other current liabilities; and (iii) the payment of contingent earnout consideration in excess of purchase price accrual. We believe that adjusted free cash flow is an important financial measure for use in evaluating financial performance because it measures our ability to generate additional cash from our business operations.

Reconciliation of guidance regarding adjusted EBITDA, organic revenue growth, adjusted diluted EPS and adjusted free cash flow to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to commissions and fees, net income (loss), diluted earnings (loss) per share or other consolidated income statement data prepared in accordance with GAAP. The Company is currently unable to predict with a reasonable degree of certainty the type and extent of items that would be expected to impact these GAAP financial measures for these periods. The unavailable information could have a significant impact on the non-GAAP measures.

Adjusted EBITDA and Adjusted EBITDA Margin

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

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

(in thousands, except percentages)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

$

338,938

 

 

$

306,270

 

 

$

1,059,145

 

 

$

933,907

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(14,475

)

 

$

(32,006

)

 

$

(6,242

)

 

$

(101,523

)

Adjustments to net loss:

 

 

 

 

 

 

 

 

Interest expense, net

 

 

31,329

 

 

 

30,580

 

 

 

94,203

 

 

 

87,600

 

Amortization expense

 

 

26,899

 

 

 

23,183

 

 

 

76,334

 

 

 

69,505

 

Share-based compensation

 

 

17,949

 

 

 

14,598

 

 

 

46,764

 

 

 

46,637

 

Gain on divestitures

 

 

(1,809

)

 

 

 

 

 

(38,953

)

 

 

 

Change in fair value of contingent consideration

 

 

(952

)

 

 

13,914

 

 

 

17,276

 

 

 

55,065

 

Loss on extinguishment and modification of debt

 

 

389

 

 

 

 

 

 

15,068

 

 

 

 

Colleague earnout incentives

 

 

4,327

 

 

 

 

 

 

10,706

 

 

 

 

Transaction-related Partnership and integration expenses

 

 

2,047

 

 

 

3,774

 

 

 

9,042

 

 

 

18,007

 

Depreciation expense

 

 

1,557

 

 

 

1,453

 

 

 

4,619

 

 

 

4,250

 

Severance

 

 

678

 

 

 

875

 

 

 

3,554

 

 

 

3,373

 

Income and other taxes

 

 

82

 

 

 

161

 

 

 

3,300

 

 

 

904

 

Loss on interest rate caps

 

 

84

 

 

 

818

 

 

 

244

 

 

 

489

 

Other(1)

 

 

4,646

 

 

 

6,659

 

 

 

13,410

 

 

 

20,289

 

Adjusted EBITDA

 

$

72,751

 

 

$

64,009

 

 

$

249,325

 

 

$

204,596

 

Adjusted EBITDA margin

 

 

21

%

 

 

21

%

 

 

24

%

 

 

22

%

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

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 September 30,

For the Nine Months

Ended September 30,

(in thousands, except percentages)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Commissions and fees

 

$

335,210

 

 

$

304,232

 

 

$

1,050,409

 

 

$

929,306

 

Partnership commissions and fees(1)

 

 

 

 

 

(985

)

 

 

 

 

 

(44,696

)

Organic revenue

 

$

335,210

 

 

$

303,247

 

 

$

1,050,409

 

 

$

884,610

 

Organic revenue growth(2)

 

$

40,672

 

 

$

47,523

 

 

$

144,844

 

 

$

150,471

 

Organic revenue growth %(2)

 

 

14

%

 

 

19

%

 

 

16

%

 

 

20

%

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

(2) Organic revenue for the three and nine months ended September 30, 2023 used to calculate organic revenue growth for the three and nine months ended September 30, 2024 was $294.5 million and $905.6 million, respectively, which is adjusted to exclude commissions and fees from divestitures that occurred during 2024.

Adjusted Net Income and Adjusted Diluted EPS

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

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

(in thousands, except per share data)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss attributable to Baldwin

 

$

(8,377

)

 

$

(17,629

)

 

$

(4,356

)

 

$

(55,658

)

Net loss attributable to noncontrolling interests

 

 

(6,098

)

 

 

(14,377

)

 

 

(1,886

)

 

 

(45,865

)

Amortization expense

 

 

26,899

 

 

 

23,183

 

 

 

76,334

 

 

 

69,505

 

Share-based compensation

 

 

17,949

 

 

 

14,598

 

 

 

46,764

 

 

 

46,637

 

Gain on divestitures

 

 

(1,809

)

 

 

 

 

 

(38,953

)

 

 

 

Change in fair value of contingent consideration

 

 

(952

)

 

 

13,914

 

 

 

17,276

 

 

 

55,065

 

Loss on extinguishment and modification of debt

 

 

389

 

 

 

 

 

 

15,068

 

 

 

 

Colleague earnout incentives

 

 

4,327

 

 

 

 

 

 

10,706

 

 

 

 

Transaction-related Partnership and integration expenses

 

 

2,047

 

 

 

3,774

 

 

 

9,042

 

 

 

18,007

 

Depreciation

 

 

1,557

 

 

 

1,453

 

 

 

4,619

 

 

 

4,250

 

Amortization of deferred financing costs

 

 

1,422

 

 

 

1,244

 

 

 

4,419

 

 

 

3,577

 

Severance

 

 

678

 

 

 

875

 

 

 

3,554

 

 

 

3,373

 

Loss on interest rate caps, net of cash settlements

 

 

84

 

 

 

3,771

 

 

 

2,544

 

 

 

8,382

 

Income tax expense

 

 

 

 

 

 

 

 

2,151

 

 

 

 

Other(1)

 

 

4,646

 

 

 

6,659

 

 

 

13,410

 

 

 

20,289

 

Adjusted pre-tax income

 

 

42,762

 

 

 

37,465

 

 

 

160,692

 

 

 

127,562

 

Adjusted income taxes(2)

 

 

4,234

 

 

 

3,709

 

 

 

15,909

 

 

 

12,629

 

Adjusted net income

 

$

38,528

 

 

$

33,756

 

 

$

144,783

 

 

$

114,933

 

 

 

 

 

 

 

 

 

 

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

 

 

64,012

 

 

 

60,549

 

 

 

63,001

 

 

 

59,791

 

Dilutive weighted-average shares of Class A common stock

 

 

4,014

 

 

 

3,941

 

 

 

3,570

 

 

 

3,931

 

Exchange of Class B common stock(3)

 

 

50,490

 

 

 

52,862

 

 

 

51,234

 

 

 

53,367

 

Adjusted diluted weighted-average shares outstanding

 

 

118,516

 

 

 

117,352

 

 

 

117,805

 

 

 

117,089

 

 

 

 

 

 

 

 

 

 

Adjusted diluted EPS

 

$

0.33

 

 

$

0.29

 

 

$

1.23

 

 

$

0.98

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

 

$

(0.13

)

 

$

(0.29

)

 

$

(0.07

)

 

$

(0.93

)

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

 

 

0.01

 

 

 

0.02

 

 

 

0.02

 

 

 

0.06

 

Other adjustments to loss per share

 

 

0.49

 

 

 

0.59

 

 

 

1.42

 

 

 

1.96

 

Adjusted income taxes per share

 

 

(0.04

)

 

 

(0.03

)

 

 

(0.14

)

 

 

(0.11

)

Adjusted diluted EPS

 

$

0.33

 

 

$

0.29

 

 

$

1.23

 

 

$

0.98

 

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

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

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

Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA Margin

The following table reconciles pro forma revenue to revenues and reconciles pro forma adjusted EBITDA and pro forma adjusted EBITDA margin to net loss, which we consider to be the most directly comparable GAAP financial measures:

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

(in thousands, except percentages)

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues

 

$

338,938

 

 

$

306,270

 

 

$

1,059,145

 

 

$

933,907

 

Less revenue from 2024 divestitures(1)

 

 

 

 

 

(9,823

)

 

 

(6,260

)

 

 

(27,130

)

Pro forma revenue

 

$

338,938

 

 

$

296,447

 

 

$

1,052,885

 

 

$

906,777

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(14,475

)

 

$

(32,006

)

 

$

(6,242

)

 

$

(101,523

)

Less net income from 2024 divestitures(2)

 

 

(1,809

)

 

 

(1,798

)

 

 

(39,264

)

 

 

(3,194

)

Pro forma net loss

 

 

(16,284

)

 

 

(33,804

)

 

 

(45,506

)

 

 

(104,717

)

Adjustments to pro forma net loss:

 

 

 

 

 

 

 

 

Interest expense, net

 

 

31,329

 

 

 

30,580

 

 

 

94,203

 

 

 

87,600

 

Amortization expense

 

 

26,899

 

 

 

22,705

 

 

 

76,334

 

 

 

68,077

 

Share-based compensation

 

 

17,949

 

 

 

14,598

 

 

 

46,764

 

 

 

46,637

 

Change in fair value of contingent consideration

 

 

(952

)

 

 

13,914

 

 

 

17,276

 

 

 

55,043

 

Loss on extinguishment and modification of debt

 

 

389

 

 

 

 

 

 

15,068

 

 

 

 

Colleague earnout incentives

 

 

4,327

 

 

 

 

 

 

10,706

 

 

 

 

Transaction-related Partnership and integration expenses

 

 

2,047

 

 

 

3,774

 

 

 

7,992

 

 

 

18,007

 

Depreciation expense

 

 

1,557

 

 

 

1,441

 

 

 

4,619

 

 

 

4,214

 

Severance

 

 

678

 

 

 

814

 

 

 

3,527

 

 

 

3,130

 

Income and other taxes

 

 

82

 

 

 

161

 

 

 

3,300

 

 

 

904

 

Loss on interest rate caps

 

 

84

 

 

 

818

 

 

 

244

 

 

 

489

 

Other(3)

 

 

4,646

 

 

 

6,657

 

 

 

13,201

 

 

 

20,283

 

Pro forma adjusted EBITDA

 

$

72,751

 

 

$

61,658

 

 

$

247,728

 

 

$

199,667

 

Pro forma adjusted EBITDA margin

 

 

21

%

 

 

21

%

 

 

24

%

 

 

22

%

(1) The adjustments exclude revenue from 2024 divestitures for all periods in 2024 and 2023 as if the divestitures had occurred on January 1, 2024 and January 1, 2023, respectively.

(2) The adjustments exclude net income from 2024 divestitures, including the gain on divestitures, for all periods in 2024 and 2023 as if the divestitures had occurred on January 1, 2024 and January 1, 2023, respectively.

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

Adjusted Net Cash Provided by Operating Activities (“Adjusted Free Cash Flow”)

The following table reconciles adjusted free cash flow to net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:

 

 

For the Nine Months

Ended September 30,

(in thousands)

 

 

2024

 

 

 

2023

 

Net cash provided by operating activities

 

$

85,708

 

 

$

22,799

 

Adjustments to net cash provided by operating activities:

 

 

 

 

Change in premiums, commissions and fees receivable, net

 

 

27,777

 

 

 

63,367

 

Change in accounts payable, accrued expenses and other current liabilities

 

 

(35,395

)

 

 

(32,793

)

Payment of contingent earnout consideration in excess of purchase price accrual

 

 

21,145

 

 

 

22,639

 

Adjusted free cash flow(1)

 

$

99,235

 

 

$

76,012

 

(1) Without the impact of one-time, third-party refinancing costs of $14.0 million incurred during 2024, adjusted free cash flow would have expanded 49% year-over-year to $113.3 million for the nine months ended September 30, 2024.

COMMONLY USED DEFINED TERMS

The following terms have the following meanings throughout this press release unless the context indicates or requires otherwise:

Amended LLC Agreement

 

Third Amended and Restated Limited Liability Company Agreement of The Baldwin Insurance Group Holdings, LLC (formerly Baldwin Risk Partners, LLC), as amended

Clients

 

Our insureds

Colleagues

 

Our employees

GAAP

 

Accounting principles generally accepted in the United States of America

Insurance Company Partners

 

Insurance companies with which we have a contractual relationship

Partners

 

Companies that we have acquired, or in the case of asset acquisitions, the producers

Partnerships

 

Strategic acquisitions made by the Company

SEC

 

U.S. Securities and Exchange Commission

 

MEDIA RELATIONS



Anna Rozenich, Senior Director, Enterprise Communications

The Baldwin Group

630.561.5907 | anna.rozenich@baldwin.com



INVESTOR RELATIONS



Bonnie Bishop, Executive Director, Investor Relations

The Baldwin Group

813.259.8032 | IR@baldwin.com

Source: The Baldwin Group

FAQ

What was Baldwin Group's (BWIN) revenue growth in Q3 2024?

Baldwin Group reported total revenue growth of 11% to $338.9 million in Q3 2024, with organic revenue growth of 14% year-over-year.

What was Baldwin Group's (BWIN) Adjusted EBITDA for Q3 2024?

Baldwin Group's Adjusted EBITDA grew 14% year-over-year to $72.8 million in Q3 2024, with a margin of 21.5%.

What was Baldwin Group's (BWIN) net income/loss in Q3 2024?

Baldwin Group reported a GAAP net loss of $14.5 million and a diluted loss per share of $0.13 in Q3 2024.

How much cash and credit availability did Baldwin Group (BWIN) have as of September 30, 2024?

As of September 30, 2024, Baldwin Group had $181.8 million in cash and cash equivalents, plus $600.0 million of borrowing capacity under its revolving credit facility.

The Baldwin Insurance Group, Inc.

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