TWFG, Inc.

Previous wording

The following discussion contains commentary on the financial results derived from the unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2025 and September 30, 2024 of TWFG, Inc.

Current wording

The following discussion contains commentary on the financial results derived from the unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2026 and March 31, 2025 of TWFG, Inc.

Previous wording

Commission income. We derive commission income from the placement of insurance contracts between insurance carriers and Clients. Our commissions are established by the agency agreement between the Company and the insurance carrier and are calculated as a percentage of premiums for the underlying insurance contract. Commission rates vary across insurance carriers, states and lines of business and typically range from 7% to 30%. On a consolidated basis, our average commission rate for 2024 was approximately 12%.

Current wording

Commission income. We derive commission income from the placement of insurance contracts between insurance carriers and Clients. Our commissions are established by the agency agreement between the Company and the insurance carrier and are calculated as a percentage of premiums for the underlying insurance contract. Commission rates vary across insurance carriers, states and lines of business and typically range from 7% to 30%. On a consolidated basis, our average commission rate for 2025 was approximately 12.8%.

Previous wording

Total revenues for the three months ended September 30, 2025 increased by$11.3 million, or 21.3%, compared to the same period in the prior year. The increase was primarily due to a$10.0 million, or 20.8%, increase in commission income driven primarily by continued organic business growth and the impact of acquisitions in 2025. Also contributing to the increase in total revenues were the $0.7 million, or 51.5%, increase in contingent income and $0.6 million, or 19.9%, increase in fee income, compared to the same period in the prior year. See discussions below for additional information about the changes in our revenues.

Current wording

Total revenues for the three months ended March 31, 2026 increased by $19.0 million, or 35.3%, compared to the same period in the prior year. The increase was primarily due to a $18.3 million, or 37.4%, increase in commission income mainly driven by the acquisition of TWFG MGA FL, LLC, continued organic business growth and corporate store acquisitions completed after March 31, 2025. Also contributing to the increase in total revenues were the$0.3 million, or 16.4%, increase in contingent income,$0.3 million, or 11.2%, increase in fee income, and$0.1 million, or 39.3%, increase in other income compared to the same period in the prior year. See discussions below for additional information about the changes in our revenues.

Previous wording

Total comm ission income for the three months ended September 30, 2025 increased by $10.0 million, or 20.8%, compared to the same period in the prior year due to continued organic business growth and the impact of acquisitions made in 2025.

Current wording

Total comm ission income for the three months ended March 31, 2026 increased by$18.3 million, or 37.4%, compared to the same period in the prior year, mainly driven by the acquisition of TWFG MGA FL, LLC, continued organic business growth and corporate store acquisitions completed after March 31, 2025.

Previous wording

Commission income for total Insurance Services grew by$5.9 million, or 14.4%, for the three months ended September 30, 2025 compared to the same period in the prior year. Insurance Services Agency-in-a-Box commission income for the three months ended September 30, 2025 increased by $3.2 million, or 10.0%, compared to the same period in the prior year. This increase was driven by higher written premium volume through organic growth and mix in line of business over the period. Insurance Services Corporate Branches commission income for the three months ended September 30, 2025 increased by $2.7 million, or 29.2%, compared to the same period in the prior year. The increase was primarily driven by the acquisitions completed in 2025 and organic growth.

Current wording

Commission income for total Insurance Services grew by $5.3 million, or 12.9%, for the three months ended March 31, 2026 compared to the same period in the prior year. Insurance Services Agency-in-a-Box commission income for the three months ended March 31, 2026 increased by$2.9 million, or 8.8%, compared to the same period in the prior year. This increase was driven by higher written premium volume through organic growth and mix in line of business over the period. Insurance Services Corporate Branches commission income for the three months ended March 31, 2026 increased by$2.4 million, or 29.5%, compared to the same period in the prior year. The increase was primarily driven by the acquisitions completed after March 31, 2025 and organic growth.

Previous wording

TWFG MGA commission income for the three months ended September 30, 2025 increased by $4.2 million, or 56.1%, compared to the same period in the prior year. The increase in TWFG MGA was primarily driven by the acquisition of TWFG MGA FL, LLC completed in 2025.

Current wording

TWFG MGA commission income for the three months ended March 31, 2026 increased by$12.9 million, or 179.1%, compared to the same period in the prior year. The increase in TWFG MGA was primarily driven by the acquisition of TWFG MGA FL, LLC completed in 2025.

Previous wording

Contingent income for the three months ended September 30, 2025 was $2.1 million, reflecting a $0.7 million, or 51.5%, increase compared to the same period in the prior year. The increase in contingent income was primarily due to underlying growth in our business. Contingent income is unpredictable and dependent upon the target financial and performance metrics established by the insurance carriers.

Current wording

Contingent income for the three months ended March 31, 2026 was$1.9 million, reflecting a$0.3 million, or 16.4%, increase compared to the same period in the prior year. The increase in contingent income was primarily due to underlying growth in our business. Contingent income is unpredictable and dependent upon the target financial and performance metrics established by the insurance carriers.

Previous wording

Fee income for the three months ended September 30, 2025 increased by$0.6 million, or 19.9%, compared to the same period in the prior year. Changes to individual components of fee income are discussed in detail below:

Current wording

Fee income for the three months ended March 31, 2026 increased by $0.3 million, or 11.2%, compared to the same period in the prior year. Changes to individual components of fee income are discussed in detail below:

Previous wording

•Policy fees for the three months ended September 30, 2025 increased by $0.1 million, or 10.4%, compared to the same period in the prior year. The increase in policy fees was primarily due to higher policy count driven by new business growth.

Current wording

•Policy fees for the three months ended March 31, 2026 increased by $0.4 million, or 33.5%, compared to the same period in the prior year. The increase in policy fees was primarily due to higher policy count driven by new business growth.

Previous wording

•Branch fees for the three months ended September 30, 2025 increased by $0.1 million, or 10.0%, compared to the same period in the prior year. The increase in branch fees was primarily driven by increased agent growth.

Current wording

•Branch fees for the three months ended March 31, 2026 increased by$0.1 million, or 5.2%, compared to the same period in the prior year. The increase in branch fees was primarily driven by increased agent growth.

Previous wording

Other income for the three months ended September 30, 2025 was $0.3 million compared to $0.4 million in the same period in the prior year. The account balance was primarily comprised of interest earned on fiduciary funds and interest earned on the $10.0 million other investment held by a third party to facilitate premium financing arrangements.

Current wording

Other income for the three months ended March 31, 2026 was$0.5 million compared to$0.4 million in the same period in the prior year. The account balance was primarily comprised of interest earned on fiduciary funds and interest earned on the $10.0 million other investment held by a third party to facilitate premium financing arrangements.

Previous wording

Total commission expense for the three months ended September 30, 2025 increased by $3.9 million, or 12.6%, compared to the same period in the prior year. Theincrease was primarily due to theincreased business growth and overall shift in business mix. See commission income discussion above for additional information regarding the driver of changes.

Current wording

Total commission expense for the three months ended March 31, 2026 increased by$5.2 million, or 16.4%, compared to the same period in the prior year. Theincrease was primarily due to theincreased business growth and overall shift in business mix. See commission income discussion above for additional information regarding the driver of changes.

Previous wording

Commission expense for total Insurance Services grew by$2.7 million, or 10.3%, for the three months ended September 30, 2025 compared to the same period in the prior year. Insurance Services Agency-in-a-Box commission expense for the three months ended September 30, 2025 increased by $2.5 million, or 10.1%, compared to the same period in the prior year. The increase was primarily driven by the increase in our business. The expenses of our Branches are primarily commission expense, which is determined as a percentage of the written premium. The profitability of our Branches, as determined by the difference between commission income and commission expense, is consistent.

Current wording

Commission expense for total Insurance Services grew by $2.8 million, or 10.4%, for the three months ended March 31, 2026 compared to the same period in the prior year. Insurance Services Agency-in-a-Box commission expense for the three months ended March 31, 2026 increased by$2.7 million, or 10.3%, compared to the same period in the prior year. The increase was primarily driven by the increasein our business.

Previous wording

Insurance Services Corporate Branches commission expense for the three months ended September 30, 2025 increased by $0.2 million, or 13.6%, compared to the same period in the prior year. The increase in commission expense was driven by both organic business growth and acquisition of Corporate Branches in the current period. The expenses of our Corporate Branches are primarily salaries and benefits, and are primarily fixed expenses, which are not directly related to commission income or written premium.

Current wording

Insurance Services Corporate Branches commission expense for the three months ended March 31, 2026 increased by$0.1 million, or 10.7%, compared to the same period in the prior year. Theincrease in commission expense was driven by both organic business growth and acquisition of Corporate Branches in the current period. The expenses of our Corporate Branches are primarily salaries and benefits, and are primarily fixed expenses, which are not directly related to commission income or written premium.

Previous wording

TWFG MGA commission expense for the three months ended September 30, 2025 increased by $1.2 million, or 26.6%, compared to the same period in the prior year. The increase is primarily driven by the acquisition of TWFG MGA FL, LLC and overall growth.

Current wording

TWFG MGA commission expense for the three months ended March 31, 2026 increased by$2.3 million, or 49.4%, compared to the same period in the prior year. Theincrease is primarily driven by the acquisition of TWFG MGA FL, LLC and overall growth.

Previous wording

Salaries and employee benefits for the three months ended September 30, 2025 was $9.9 million compared to $8.3 million in the same period in the prior year, reflecting a 19.2% total increase consisting of $1.0 million in stock-based compensation and $8.9 million in salaries and employee benefit expenses driven by 2025 Corporate Branch acquisitions.

Current wording

Salaries and employee benefits for the three months ended March 31, 2026 was$9.9 million compared to$8.2 million in the same period in the prior year, reflecting a 20.8% total increase, primarily driven by$1.5 million in salaries and employee benefit expenses driven by acquisitions, increase in corporate employee growth of $0.5 million, offset by a decrease of $0.3 million in stock-based compensation.

Previous wording

Depreciation and amortization for thenine months ended September 30, 2025 was $12.6 million compared to $9.0 million in the same period in the prior year, reflecting anincrease of$3.6 million, or 40.4%. Theincrease was primarily due to the amortization of intangible assets from our recent asset acquisitions.

Current wording

Depreciation and amortization for the three months ended March 31, 2026 was$6.2 million compared to$3.4 million in the same period in the prior year, reflecting anincrease of $2.8 million, or 83.7%. Theincrease was primarily due to the amortization of intangible assets from our recent asset acquisitions.

Previous wording

Interest income for thethree months ended September 30, 2025 was $1.6 million, compared to $1.8 million in the same period in the prior year, reflecting a decrease of $0.2 million. The decrease was attributable to the decline in cash balances which averaged $161.2 million over the three months ended September 30, 2025 compared to $191.2 million on hand as of September 30, 2024.

Current wording

Interest income for the three months ended March 31, 2026 was $1.2 million, compared to $1.9 million in the same period in the prior year, reflecting a decrease of $0.7 million. The decrease was attributable to the decline in cash balances which averaged $155.8 million over the three months ended March 31, 2026 compared to $208.3 million on hand as of March 31, 2025.

Previous wording

Total Written Premium for the three months ended September 30, 2025 increased by $67.6 million, or 16.9%, compared to the same period in the prior year. This increase was a result of growth in renewal and new business of $51.0 million, or 16.4%, and $16.6 million, or 18.7%, respectively. Within our Insurance Services offering, there was a shift in renewal and new business growth as compared to the same period in the prior year. Renewal business had a spike in growth of $48.4 million, or 18.3%, compared to growth of $22.8 million, or 9.4%, in the same period in the prior year. However, new business grew at lesser degree of growth of $7.5 million, or 10.2%, as compared to growth of $17.7 million, or 31.3%, in the same period of the prior year. The higher new business growth in the third quarter of 2024 included an influx from the 2023 corporate store acquisitions, which were acquired starting in the second quarter of 2023. Within our MGA offering, we saw an uptick in new business growth of$9.1 million, or 61.2%, due primarily to the TWFG MGA FL, LLC acquisition in June 2025. Renewal business grew $2.6 million, or 5.7%, compared to the same period of the prior year.

Current wording

Total Written Premium for the three months ended March 31, 2026 increased by $87.3 million, or 23.5%, compared to the same period in the prior year. This increase was a result of growth in renewal and new business of $59.5 million, or 21.1%, and $27.8 million, or 31.0%, respectively. Within our Insurance Services offering, there was a shift in renewal and new business growth as compared to the same period in the prior year. Renewal business had a spike in growth of $40.2 million, or 16.4%, compared to growth of $30.4 million, or 14.2%, in the same period in the prior year. However, new business grew at a lesser degree of growth of $5.8 million, or 8.0%, as compared to growth of $10.4 million, or 16.7%, in the same period of the prior year. The higher renewal business growth in the first quarter of 2026 included an influx from the 2025 corporate store acquisitions, which were acquired starting in the second quarter of 2025. Within our MGA offering, we saw an uptick in both renewal business growth and new business growth of$19.3 million, or 53.0%, and $22.0 million, or 129.3%, respectively. The increase is due primarily to the acquisition of TWFG MGA FL, LLC which closed in the second quarter of 2025.

Previous wording

Organic Revenue. Since the first quarter of 2025, we have utilized the revised calculation methodology for Organic Revenue to include policy fee income as it is directly correlated to MGA commission income. Our legacy calculation methodology removed policy fee income from Organic Revenue. Organic Revenue is total revenue (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, non-policy fee income, other income and those revenues generated from acquired businesses with over $0.5 million in annualized revenue that have not reached the twelve-month owned mark.

Current wording

Organic Revenue. Organic Revenue is total revenue (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, non-policy fee income, other income and those revenues generated from acquired businesses with over $0.5 million in annualized revenue that have not reached the twelve-month owned mark.

Previous wording

Revenue growth rate, representing the year-over-year change in total revenues, was 21.3% for the three months ended September 30, 2025 compared to the same period in 2024 and 11.5% for the three months ended September 30, 2024 compared to the same period in 2023. Revenue growth for the periods reflected the growth in our Books of Business and the mix of the new and renewal businesses. Revenue growth for the three months ended September 30, 2025 compared to the same period in 2024 included the continued growth of commission and fee income during the period. See “Consolidated Results of Operations” for additional discussions regarding the changes in our revenues.

Current wording

Revenue growth rate, representing the year-over-year change in total revenues, was 35.3% for the three months ended March 31, 2026 compared to the same period in 2025 and 16.6% for the three months ended March 31, 2025 compared to the same period in 2024. Revenue growth for the periods reflected the growth in our Books of Business and the mix of the new and renewal businesses. Revenue growth for the three months ended March 31, 2026 compared to the same period in 2025 included the continued growth of commission and fee income during the period. See “Consolidated Results of Operations” for additional discussions regarding the changes in our revenues.

Previous wording

Organic Revenue Growth Rate was 10.2% for the three months ended September 30, 2025 compared to the same period in 2024 and 8.6% for the three months ended September 30, 2024 compared to the same period in 2023. Organic Revenue Growth for both periods reflects ongoing, but normalizing rate increases being implemented by carriers, the underlying growth of our business, and healthy economic growth and an increase in commission income in our MGA offering. See “Consolidated Results of Operations—Commission Income” for additional discussions regarding the changes in our commission income.

Current wording

Organic Revenue Growth Rate was 10.1% for the three months ended March 31, 2026 compared to the same period in 2025 and 14.3% for the three months ended March 31, 2025 compared to the same period in 2024. Organic Revenue Growth for both periods reflects ongoing, but normalizing rate increases being implemented by carriers, the underlying growth of our business, and healthy economic growth and an increase in commission income in our MGA offering. See “Consolidated Results of Operations—Commission Income” for additional discussions regarding the changes in our commission income.

Previous wording

Adjusted Net Income is a supplemental measure of our performance and is defined as net income (the most directly comparable GAAP measure) before amortization, non-recurring or non-operating income and expenses, including equity-based compensation, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interests do not exist. We believe Adjusted Net Income is a useful measure because it adjusts for the after-tax impact of significant one-time, non-recurring items and eliminates the impact of any transactions that do not directly affect what management considers to be our ongoing operating performance in the period. These adjustments generally eliminate the effects of certain items that may vary from company-to-company for reasons unrelated to overall operating performance.

Current wording

Adjusted Net Income. Adjusted Net Income is a supplemental measure of our performance and is defined as Net Income (the most directly comparable GAAP measure) before amortization, non-recurring or non-operating income and expenses, including equity-based compensation, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interests do not exist while excluding the impact of the sale of non-current assets. We believe Adjusted Net Income is a useful measure because it adjusts for the after-tax impact of significant one-time, non-recurring items and eliminates the impact of any transactions that do not directly affect what management considers to be our ongoing operating performance in the period. These adjustments generally eliminate the effects of certain items that may vary from company-to-company for reasons unrelated to overall operating performance.

Previous wording

Prior to the IPO and Reorganization Transactions, TWFG Holding’s equity structure included common units. The Company considered the calculation of earnings per unit for periods prior to the IPO and determined that such presentation would not provide meaningful information to the users of these Condensed Consolidated Financial Statements. Therefore, earnings per share information for the three and nine months ended September 30, 2024 has been calculated solely for the post-IPO period.

Current wording

Prior to the IPO and Reorganization Transactions, TWFG Holding’s equity structure included common units. The Company considered the calculation of earnings per unit for periods prior to the IPO and determined that such presentation would not provide meaningful information to the users of these Condensed Consolidated Financial Statements. Therefore, earnings per share information for the three months ended March 31, 2026 has been calculated solely for the post-IPO period.

Previous wording

(1)For comparability purposes, this calculation incorporates the net income that would be distributable if all shares of Class B Common Stock and Class C Common Stock, together with the related LLC Units, were exchanged for shares of Class A Common Stock. For the three and nine months ended September 30, 2025, this includes $7.9 million of net income on 56,272,116 weighted-average shares of common stock outstanding - diluted and $20.5 million of net income on 56,259,492 weighted-average shares of common stock outstanding - diluted, respectively. For the three and nine months ended September 30, 2024, 41,171,461 weighted average outstanding Class B Common Stock and Class C Common Stock were considered dilutive and included in the 56,061,843 and 56,061,843 weighted-average shares of common stock outstanding - diluted within diluted earnings per share calculation, respectively. See Note 12 Earnings Per Share to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information about the earnings per share.

Current wording

(1) For comparability purposes, this calculation incorporates the net income that would be distributable if all shares of Class B Common Stock and Class C Common Stock, together with the related LLC Units, were exchanged for shares of Class A Common Stock. For the three months ended March 31, 2026, this includes $7.8 million of net income on 56,068,749 weighted-average shares of common stock outstanding-diluted. For the three months ended March 31, 2025, this includes $5.5 million of net income on 56,227,014 weighted-average shares of common stock outstanding-diluted. For the three months ended March 31, 2026, 41,171,461 weighted average outstanding Class B Common Stock and Class C Common Stock were considered dilutive and included in the 56,068,749 weighted-average shares of common stock outstanding-diluted within diluted earnings per share calculation. See Note 13 Earnings Per Share to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information about the earnings per share.

Previous wording

(2) Adjustments to Adjusted Net Income are described in the footnotes of the reconciliation of Adjusted Net Income to net income in “Adjusted Net Income and Adjusted Net Income Margin”, which represent the difference between net income of $9.6 million and Adjusted Net Income of $13.0 million and net income of $25.5 million and Adjusted Net Income of $33.7 million for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2025, Adjusted Diluted Earnings Per Share include adjustments of $3.3 million to Adjusted Net Income on 56,272,116 weighted-average shares of common stock outstanding - diluted and $8.2 million to Adjusted Net Income on 56,259,492 weighted-average shares of common stock outstanding - diluted for the period presented, respectively.

Current wording

(2) Adjustments to Net Income are described in the footnotes of the reconciliation of Adjusted Net Income to net income in “Adjusted Net Income and Adjusted Net Income Margin”, which represent the difference between net income of $13.1 million and Adjusted Net Income of $16.2 million for the three months ended March 31, 2026. For the three months ended March 31, 2026, Adjusted Diluted Earnings Per Share include adjustments of $3.1 million to Adjusted Net Income on 56,068,749 weighted-average shares of common stock outstanding-diluted for the period presented, respectively.

Previous wording

Adjusted EBITDA. Adjusted EBITDA is a supplemental measure of our performance and is defined as EBITDA adjusted to reflect items such as equity-based compensation, interest income, other non-operating and certain nonrecurring items. EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it adjusts for significant one-time, non-recurring items and eliminates the ongoing accounting effects of certain capital spending and acquisitions, such as depreciation and amortization, that do not directly affect what management considers to be our ongoing operating performance in the period. These adjustments eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Our measure of Adjusted EBITDA is not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the methods of calculation.

Current wording

Adjusted EBITDA. Adjusted EBITDA is a supplemental measure of our performance and is defined as EBITDA adjusted to reflect items such as equity-based compensation, interest income, other non-operating and certain nonrecurring items, while excluding the impact of the sale of non-current assets. EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it adjusts for significant one-time, non-recurring items and eliminates the ongoing accounting effects of certain capital spending and acquisitions, such as depreciation and amortization, that do not directly affect what management considers to be our ongoing operating performance in the period. These adjustments eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Our measure of Adjusted

Previous wording

Adjusted EBITDA Margin. Adjusted EBITDA Margin is Adjusted EBITDA divided by total revenue. We believe that Adjusted EBITDA Margin is a useful measurement of operating profitability for the same reasons we find Adjusted EBITDA useful and also because it provides a period-to-period comparison of our operating performance.

Current wording

Adjusted EBITDA Margin. Adjusted EBITDA Margin is Adjusted EBITDA divided by total revenues. We believe that Adjusted EBITDA Margin is a useful measurement of operating profitability for the same reasons we find Adjusted EBITDA useful and also because it provides a period-to-period comparison of our operating performance.

Previous wording

Adjusted Free Cash Flow. Adjusted Free Cash Flow is a supplemental measure of our performance. We define Adjusted Free Cash Flow as cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property and equipment, and acquisition-related costs. We believe Adjusted Free Cash Flow is a useful measure of operating performance because it represents the cash flow from the business that is within our discretion to direct to activities including investments, debt repayment, and returning capital to stockholders.

Current wording

Adjusted Free Cash Flow. Adjusted Free Cash Flow is a supplemental measure of our performance. We define Adjusted Free Cash Flow as cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property, plant, and equipment and acquisition-related costs. We believe Adjusted Free Cash Flow is a useful measure of operating performance because it represents the cash flow from the business that is within our discretion to direct to activities including investments, debt repayment, and returning capital to stockholders.

Previous wording

A reconciliation of Adjusted Free Cash Flows to Cash flow from Operating Activities, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands):

Current wording

A reconciliation of Adjusted Free Cash Flow to Cash flow from Operating Activities, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands):

Previous wording

As of September 30, 2025, the Company had $151.0 million in cash and cash equivalents and $11.6 million in restricted cash, compared to $195.8 million and $9.6 million, respectively, as of December 31, 2024. The decrease in cash and cash equivalents for the nine months ended September 30, 2025 was primarily attributable to $54.2 million of cash paid for acquisitions, $15.9 million in member distributions, and $2.8 million in tax withholding on equity vesting, partially offset by positive cash flows from operations of $40.2 million.

Current wording

As of March 31, 2026, the Company had $124.8 million in cash and cash equivalents and $18.8 million in restricted cash, compared to $155.9 million and $12.0 million, respectively, as of December 31, 2025. The decrease in cash and cash equivalents for the three months ended March 31, 2026 was primarily attributable to $29.0 million of cash paid for acquisitions, $16.6 million paid for Class A share repurchases of Class A Common Stock, and $7.3 million in member distributions, partially offset by positive cash flows from operations of $22.7 million.

Previous wording

The Company maintains access to the $50.0 million Revolving Facility, of which zero was outstanding at September 30, 2025. We were in compliance with all financial covenants under our debt agreements as of the end of the period. Management believes existing liquidity sources, together with cash generated from operations, will be sufficient to meet working capital, capital expenditure, and acquisition-related needs for at least the next 12 months.

Current wording

The Company maintains access to the $50.0 million Revolving Facility (as defined below), of which zero was outstanding at March 31, 2026. We were in compliance with all financial covenants under our debt agreements as of the end of the period. Management believes existing liquidity sources, together with cash generated from operations, will be sufficient to meet working capital, capital expenditure, and acquisition-related needs for at least the next 12 months.

Previous wording

On June 5, 2017, TWFG Holding, as borrower, entered into a credit agreement (as subsequently amended, the “Term Loan Credit Agreement”) with PNC Bank, National Association, as lender. On July 30, 2019, TWFG Holding entered into a third amendment to the Term Loan Credit Agreement pursuant to which it borrowed $4.0 million pursuant to a Term Loan B and used these proceeds for permitted acquisitions. On December 4, 2020, TWFG Holding entered into a fifth amendment to the Term Loan Credit Agreement pursuant to which it borrowed an additional $13.0 million pursuant to a Term Loan C and used these proceeds for permitted acquisitions (such amount, together with the amount borrowed on July 30, 2019, the “Term Loans”). On May 23, 2023, TWFG Holding entered into a ninth amendment to the Term Loan Credit Agreement to, among other things, provide additional flexibility under the covenants contained therein. The Term Loan B was fully repaid by its maturity on July 30, 2024. The aggregate principal amounts of the Term Loan C as of September 30, 2025 is $4.5 million asfollows (in thousands):

Current wording

On June 5, 2017, TWFG Holding, as borrower, entered into a credit agreement (as subsequently amended, the “Term Loan Credit Agreement”) with PNC Bank, National Association, as lender. On July 30, 2019, TWFG Holding entered into a third amendment to the Term Loan Credit Agreement pursuant to which it borrowed $4.0 million pursuant to a Term Loan B and used these proceeds for permitted acquisitions. On December 4, 2020, TWFG Holding entered into a fifth amendment to the Term Loan Credit Agreement pursuant to which it borrowed an additional $13.0 million pursuant to a Term Loan C and used these proceeds for permitted acquisitions (such amount, together with the amount borrowed on July 30, 2019, the “Term Loans”). On May 23, 2023, TWFG Holding entered into a ninth amendment to the Term Loan Credit Agreement to, among other provisions, provide additional flexibility under the covenants contained therein. The Term Loan B was fully repaid by its maturity on July 30, 2024. As of March 31, 2026, $3.5 million remained outstanding under Term Loan C.

Previous wording

The Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank National Association provides a revolving credit facility to the Company, with commitments in an aggregate principal amount not to exceed $50.0 million (as amended on June 20, 2024, the “Revolving Facility,” and together with the Term Loan Credit Agreement, the “Credit Agreements”). Borrowings constituting revolving loans under the Revolving Credit Agreement incur interest at the Term SOFR Rate (as defined therein) for the applicable interest period plus a margin based on the consolidated leverage ratio of the Company between 2% and 2.75%, and a 0.10% adjustment. The borrowings under the Revolving Facility may be used by the Company for permitted acquisitions, working capital and general corporate purposes. The Company pays a commitment fee on unutilized amounts under the Revolving Facility of 0.20% up to 0.35% based on the consolidated leverage ratio. For the period ended September 30, 2025 and December 31, 2024, the Revolving Facility has an unutilized capacity of $50.0 million and $50.0 million, respectively.

Current wording

The Revolving Credit Agreement (the “Revolving Credit Agreement”) with PNC Bank National Association, dated as of May 23, 2023 and as amended on June 20, 2024, provides a revolving credit facility to the Company, with commitments in an aggregate principal amount not to exceed $50.0 million (as so amended, the “Revolving Facility,” and together with the Term Loan Credit Agreement, the “Credit Agreements”). Borrowings constituting revolving loans under the Revolving Credit Agreement incur interest at the Term SOFR Rate (as defined therein) for the applicable interest period plus a margin based on the consolidated leverage ratio of the Company between 2% and 2.75%, and a 0.10% adjustment. The borrowings under the Revolving Facility may be used by the Company for permitted acquisitions, working capital and general corporate purposes. The Company pays a commitment fee on unutilized amounts under the Revolving Facility of 0.20% up to 0.35% based on the consolidated leverage ratio. For the periods ended March 31, 2026 and March 31, 2025, the Revolving Facility had an unutilized capacity of $50.0 million and $50.0 million, respectively.

Previous wording

Each of the Revolving Facility and the term loans requires the Company to maintain a consolidated leverage ratio of no greater than 2.00 to 1.00 (or, after the occurrence of certain acquisitions, 2.50 to 1.00). As of September 30, 2025 and December 31, 2024, the Company was in compliance with these covenants. The carrying amount of the Company’s variable rate debt as of September 30, 2025 and December 31, 2024 approximates fair value due to the short-term reset of the interest rate based on SOFR and the absence of a credit spread.

Current wording

Each of the Revolving Facility and the term loans requires the Company to maintain a consolidated leverage ratio of no greater than 2.00 to 1.00 (or, after the occurrence of certain acquisitions, 2.50 to 1.00). The Credit Agreements also contain covenants that, among other provisions and subject to certain exceptions, restrict our ability to pay dividends or other distributions, incur additional debt, engage in asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in transactions with affiliates, change our business or make investments. As of March 31, 2026 and March 31, 2025, the Company was in compliance with these covenants. The carrying amount of the Company’s variable rate debt as of March 31, 2026 and March 31, 2025 approximates fair value due to the short-term reset of the interest rate based on SOFR and the absence of a credit spread.

Previous wording

Interest on Term Loan B and Term Loan C accrue at Daily Simple Secured Overnight Financing Rate (“SOFR”) plus the Benchmark Replacement Adjustment of 0.11448%, 0.26161%, or 0.42826% for the one-month, three-month, or six-month borrowing periods, respectively. At our option, the revolving credit facility under the Revolving Facility accrues interest on amounts drawn at the Term SOFR Rate or Daily SOFR plus the SOFR Adjustment of 0.10% and Applicable Margin of 2.00% to 2.75%, each as defined in the Revolving Facility. The Term Loans and the Revolving Facility are collateralized by substantially all the Company’s assets, which includes rights to future commissions.

Current wording

Interest on the Term Loan C accrues at Daily Simple Secured Overnight Financing Rate (“SOFR”) plus the Benchmark Replacement Adjustment of 0.11448%, 0.26161%, or 0.42826% for the one-month, three-month, or six-month borrowing periods, respectively. At our option, the revolving credit facility under the Revolving Facility accrues interest on amounts drawn at the Term SOFR Rate or Daily SOFR plus the SOFR Adjustment of 0.10% and Applicable Margin of 2.00% to 2.75%, each as defined in the Revolving Facility. The Term Loans and the Revolving Facility are collateralized by substantially all the Company’s assets, which includes rights to future commissions.

Previous wording

Operating activities from continuing operations provided $40.2 million and $28.9 million of cash for the nine months ended September 30, 2025 and 2024, respectively. The increase in net cash provided by operating activities was driven by a $5.0 million increase in net income, $0.3 million inflow from the change in working capital between periods, which was primarily attributable to the increased collections on contingent income, and $6.0 million in net change of non-cash adjustments in the period which include amortization, stock-based compensation, and non-cash lease expense. See “Consolidated Results of Operations” above for additional information regarding the results of our operations.

Current wording

Operating activities from continuing operations provided $22.7 million and $15.6 million of cash for the three months ended March 31, 2026 and 2025, respectively. The increase in net cash provided by operating activities was driven by a $6.2 million increase in net income, $1.0 million outflow from the change in working capital between periods, which was primarily attributable to the decrease in commissions receivable, and $1.8 million in net change of non-cash adjustments in the period which include amortization, stock-based compensation, and non-cash lease expense. See “Consolidated Results of Operations” above for additional information regarding the results of our operations.

Previous wording

Investing activities from continuing operations used $63.7 million and $21.6 million of cash for thenine months ended September 30, 2025 and 2024, respectively. Our net investing outflows increased primarily due to the higher level of intangible asset acquisitions in the current period of $54.2 million compared to $21.4 million in the prior period partially offset by$0.5 million inflow from proceeds on the sale of intangible assets and other net decrease in investing outflows of$0.2 million. In addition, the Company made a $10.0 million other investment held by a third party to facilitate premium financing arrangements during the period September 30, 2025. See Note 4 Intangible Assets and Acquisitions toour Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information regarding our asset acquisitions.

Current wording

Investing activities from continuing operations used $28.3 million and $11.2 million of cash for the three months ended March 31, 2026 and 2025, respectively. Our net investing outflows increased primarily due to the higher level of intangible asset acquisitions in the current period of $28.7 million compared to $11.2 million in the prior period partially offset by $0.7 million inflow from proceeds on the sale of intangible assets. In addition, outflow of $0.3 million for property and equipment acquisitions occurred during the three months ended March 31, 2026. See Note 4 Intangibles, Acquisitions and Disposals to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information regarding our asset acquisitions.

Previous wording

Fina ncing activities from continuing operations used $19.2 million and provided $147.1 million of cash for the nine months ended September 30, 2025 and 2024. Our net financing outflows was primarily due to the $200.7 million net proceeds received from the IPO in prior year, but none in the current year, $8.7 million increase in distributions to members, $2.9 million net decrease in carrier liabilities, $2.7 million payment related to tax withholding on vesting of equity awards, and $0.4 million payment for shelf registration costs. The net financing outflows was partially offset by the $41.5 million decrease in payments to notes payable, $7.1 million decrease in deferred offering costs, and $0.4 million decr ease in deferred acquisition payable for the nine months ended September 30, 2025.

Current wording

Fina ncing activities from continuing operations used $18.6 million and $1.5 million of cash for the three months ended March 31, 2026 and 2025. Outflows were primarily due to the $16.6 million of repurchased Class A common stock under our share repurchase program, $5.3 million increase in distributions to members, and $0.4 million increase in payments of deferred acquisition payables. The financing outflows are offset by the following inflows of $4.1 million due to net increase in carrier liabilities and $1.1 million decrease related to tax withholding on vesting of equity awards for the three months ended March 31, 2026.

Previous wording

We have certain obligations related to debt maturities and operating leases. As of September 30, 2025, we had $1.4 million of non-cancelable operating lease obligations for the next 12 months. For the periods following the next 12 months, we have an additional $3.1 million of non-cancelable operating lease obligations. In addition, as of September 30, 2025, we have$4.5 million of debt maturities for the next 12 months comprised of $2.0 million of the remaining balance under the Term Loan C, $0.6 million in acquisition-related notes, and$1.9 million of acquisition-related payables. For the periods following the next 12 months, we have an additional $5.1 million of debt maturities representing $2.5 million under the Term Loan C, and $0.7 million in acquisition-related notes, and$1.9 million of acquisition-related payables. As of September 30, 2025, there was no outstan ding balance under our Revolving Facility. Any outstanding balances under our Revolving Facility, if any, will become due and payable during 2028. Annual interest rates on the acquisition-related notes are 3.75% and 5.0%, and our effective interest rates on the Term Loan C for the three and nine months ended September 30, 2025 was 3.06%. As of September 30, 2025, we have an interest rate swap agreement associated with the Term Loan C, which converted the floating interest rates on these loans to fixed interest rates. See Note 6 Debt to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Current wording

We have certain obligations related to debt maturities and operating leases. As of March 31, 2026, we had$1.2 million of non-cancelable operating lease obligations for the next 12 months. For the periods following the next 12 months, we have an additional $2.8 million of non-cancelable operating lease obligations. In addition, as of March 31, 2026, we had $8.4 million of debt maturities for the next 12 months comprised of $2.0 million of the remaining balance under the Term Loan C, and $0.6 million in acquisition-related notes, and $5.8 million of acquisition-related payables. For the periods following the next 12 months, we have an additional $3.1 million of debt maturities representing $1.5 million under the Term Loan C, $0.4 million in acquisition-related notes, and $1.1 million of acquisition-related payables. As of March 31, 2026, there was no outstanding balances under our Revolving Facility. In the future, any outstanding balances under our Revolving Facility, if any, will become due and payable during 2028. See Note 6 Debt to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.