Q - Baldwin Insurance Group,

Previous wording

•Underwriting, Capacity & Technology Solutions (“UCTS”) consists of three distinct divisions—MSI, our Capacity Solutions group (which includes our reinsurance brokerage business, Juniper Re, and our captive management business), and the Captive business (as defined further below). Through MSI, we manufacture proprietary, technology-enabled insurance products that are then distributed (in many instances via technology and/or API integrations) internally via our risk advisors across our other operating groups and externally via select distribution partners, with a focus on sheltered channels where our products deliver speed, ease of use and certainty of execution, an example of which is the national embedded renters insurance product sold at point of lease via integrations with property management software providers. As a prominent growth driver for the Company, we have invested heavily in the expansion of our MGA product suite, which is now comprised of more than 20 products across commercial, personal and professional lines. In 2024, we made significant investment in the development of new middle-market oriented commercial lines products, which will go live in the first half of 2025. UCTS’ Wholesale Business was sold in the first quarter of 2024 and its operations are included in our results through the end of February 2024.

Current wording

•Underwriting, Capacity & Technology Solutions (“UCTS”) consists of three distinct divisions—MSI, our Capacity Solutions group (which includes our reinsurance brokerage business, Juniper Re, our reinsurance MGA business, MultiStrat, and our captive management business), and the Captive business. Through MSI, we manufacture proprietary, technology-enabled insurance products that are then distributed (in many instances via technology and/or API integrations) internally via our risk advisors across our other operating groups and externally via select distribution partners, with a focus on sheltered channels where our products deliver speed, ease of use and certainty of execution, an example of which is the national embedded renters insurance product sold at point of lease via integrations with property management software providers. As a prominent growth driver for the Company, we have invested heavily in the expansion of our MGA product suite, which is now comprised of more than 20 products across commercial, personal and professional lines. In 2024, we made significant investment in the development of new middle-market oriented commercial lines products, two of which have gone live in the first half of 2025. UCTS’ Wholesale Business was sold in the first quarter of 2024, and its operations are included in our results through the end of February 2024.

Previous wording

In January of 2025, we received final approval and a Certificate of Authority from the Texas Department of Insurance to form a Texas-domiciled reciprocal insurance exchange (the “Reciprocal”), for which we intend to serve as the Attorney-in-Fact (the “AIF”). The third-party led capitalization of the Reciprocal closed and funded in full on May 6, 2025, and we expect to begin writing business into the Reciprocal later in the second quarter or early in the third quarter of 2025. Based on the structure of the Reciprocal, we do not expect to consolidate the Reciprocal’s financial results, and the AIF entity will be treated as an equity method investment in UCTS.

Current wording

In January of 2025, we received final approval and a Certificate of Authority from the Texas Department of Insurance to form a Texas-domiciled reciprocal insurance exchange (the “Reciprocal”), for which we serve as the Attorney-in-Fact (the “AIF”). The third-party led capitalization of the Reciprocal closed and funded in full on May 6, 2025, and we began writing business into the Reciprocal late in the second quarter of 2025. Based on the structure of the Reciprocal, we do not consolidate the Reciprocal’s financial results, and the AIF entity is treated as an equity method investment in UCTS.

Previous wording

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Current wording

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 and the related notes and other financial information included elsewhere in this report.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024 and the related notes and other financial information included elsewhere in this report.

Previous wording

The following is a discussion of our consolidated results of operations for the three months ended March 31, 2025 and 2024.

Current wording

The following is a discussion of our consolidated results of operations for the three and six months ended June 30, 2025 and 2024.

Previous wording

We earn commissions and fees by facilitating the arrangement between insurance company partners and clients for the carrier to provide insurance to the insured party. Our commissions are usually a percentage of the premium paid by the insured and generally depend on the type of insurance, the particular insurance company partner and the nature of the services provided. Under certain arrangements with clients, we earn pre-negotiated service fees for insurance placement services. Additionally, we earn policy fees for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance company partners, including delivery of policy documents, processing payments and other administrative functions, and the Captive business earns revenue from assumed premium. We may also receive profit-sharing commissions, which represent forms of variable consideration paid by insurance company partners associated with the placement of coverage. Profit-sharing commissions are generally based on underwriting results, but may also contain considerations for volume, growth or retention. Other revenue streams include other ancillary income, premium financing income, and marketing income based on negotiated cost reimbursement for fulling specific targeted Medicare marketing campaigns.

Current wording

We earn commissions and fees by facilitating the arrangement between insurance company and reinsurance company partners and clients for the insurance and/or reinsurance company to provide insurance and/or reinsurance to the insured party. Our commissions are usually a percentage of the premium paid by the insured and generally depend on the type of insurance, the particular insurance or reinsurance company partner and the nature of the services provided. Under certain arrangements with clients, we earn pre-negotiated service fees for insurance placement services. Additionally, we earn policy fees for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance or reinsurance company partners, including delivery of policy documents, processing payments and other administrative functions, and the Captive business earns revenue from assumed premium. We may also receive profit-sharing commissions, which represent forms of variable consideration paid by insurance company partners and reinsurance company partners associated with the placement of coverage. Profit-sharing commissions are generally based on underwriting results, but may also contain considerations for volume, growth or retention. Other revenue streams include other ancillary income, premium financing income, and marketing income based on negotiated cost reimbursement for fulling specific targeted Medicare marketing campaigns.

Previous wording

Commissions and fees increased $32.4 million, or 9%, for the first quarter of 2025 compared to the same period of 2024 driven by organic growth in core commissions and fees of $31.7 million related to new and renewal business across client industry sectors, continued outperformance from MSI, and new business growth from the Captive business. In addition, profit-sharing and other revenue grew organically $6.5 million resulting from improvements in loss ratios and the number of policies sold in IAS and MIS, as well as timing differences in UCTS. This growth was offset in part by a decrease in commissions and fees of $5.8 million from our Wholesale Business that was sold in March 2024 and for which there were no comparable revenues earned in the first quarter of 2025.

Current wording

Commissions and fees increased $71.6 million, or 10%, for the year-to-date period ended June 30, 2025 compared to the same period of 2024, driven by organic growth in core commissions and fees of $68.9 million related to new and renewal business across client industry sectors, continued outperformance from MSI, and new business growth from the Captive business. In addition, profit-sharing and other revenue grew organically $7.3 million resulting from improvements in loss ratios and the number of policies sold in IAS and MIS and continued strong underwriting performance by MSI. This growth was offset in part by a decrease in commissions and fees of $5.8 million from our Wholesale Business that was sold in March 2024 and for which there were no comparable revenues earned in 2025. Core commissions and fees growth, excluding revenue related to the Wholesale Business during the first half of 2024, was 11%.

Previous wording

Colleague compensation and benefits expense decreased $3.0 million, or 2%, for the first quarter of 2025 compared to the same period of 2024, primarily related to a decrease in colleague earnout incentives of $6.9 million, offset in part by an increase in colleague compensation of $3.4 million.

Current wording

Colleague compensation and benefits expense increased $16.8 million, or 4%, for the year-to-date period ended June 30, 2025 compared to the same period of 2024, primarily related to increases in colleague compensation of $15.2 million and benefits and other of $7.4 million, offset in part by a decrease in colleague earnout incentives of $8.2 million.

Previous wording

Other operating expenses increased $12.2 million for the first quarter of 2025 compared to the same period of 2024 driven by higher incurred losses and LAE of $3.9 million related to our newly-established Captive business, professional fees of $3.6 million due to increased legal spend which includes fees related to the setup of the Reciprocal, technology and software-related costs of $1.6 million, travel and entertainment of $1.1 million, and advertising and marketing of $1.1 million in connection with the continued rollout of our rebranding.

Current wording

Other operating expenses increased $21.8 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024 driven by higher incurred losses and LAE of $8.8 million related to our newly-established Captive business, professional fees of $5.5 million due to increased legal spend, which includes fees related to the setup of the Reciprocal, advertising and marketing of $3.1 million in connection with the continued rollout of our rebranding, technology and software-related costs of $2.3 million, and licenses and taxes of $1.2 million.

Previous wording

Amortization expense increased $1.8 million for the first quarter of 2025 compared to the same period of 2024 primarily due to an increase in capitalized software.

Current wording

Amortization expense increased $0.6 million and $2.5 million for the quarter and year-to-date periods ended June 30, 2025 compared to the same periods of 2024, respectively, primarily due to an increase in capitalized software.

Previous wording

Change in fair value of contingent consideration was an $8.1 million loss for the first quarter of 2025 compared to a $12.7 million loss for the first quarter of 2024. The fair value loss related to contingent consideration for the first quarter of 2025 was impacted by positive changes in revenue growth trends of certain partners and accretion of the contingent earnout obligations approaching their respective measurement dates, in addition to a loss recognized in connection with the reclassification of $3.3 million from colleague earnout incentives.

Current wording

The change in fair value of contingent consideration was a $2.0 million gain for the quarter ended June 30, 2025 compared to a $5.6 million loss for the same period of 2024, and a $6.1 million loss for the year-to-date period ended June 30, 2025 compared to an $18.2 million loss for the same period of 2024. The fair value gain related to contingent consideration for the second quarter of 2025 was primarily impacted by a gain recognized in reclassifying $1.5 million of colleague earnout incentives to colleague compensation and benefits. The fair value loss related to contingent consideration for the year-to-date period of 2025 was impacted by positive changes in revenue growth trends of certain partners and accretion of the contingent earnout obligations approaching their respective measurement dates, in addition to a loss recognized in reclassifying $1.8 million of earnouts from colleague compensation and benefits.

Previous wording

Interest expense, net, decreased $1.6 million for the first quarter of 2025 compared to the same period of 2024 from lower average interest rates resulting from the January 2025 refinancing, offset in part by higher average borrowings. We expect interest expense to remain relatively flat in the near term on a year-over-year basis due to an anticipated increase in borrowings under our Revolving Facility to fund the settlement of contingent earnout liabilities, offset by lower expected average interest rates.

Current wording

Interest expense, net, decreased $1.6 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024 resulting from lower average interest rates due to the January 2025 refinancing, offset in part by higher average borrowings. We expect interest expense to remain relatively flat in the near term on a year-over-year basis due to an increase in borrowings under our Revolving Facility to fund the settlement of contingent earnout liabilities and certain partnership opportunities, offset by lower expected average interest rates.

Previous wording

Gain on divestitures decreased $35.1 million for the first quarter of 2025 compared to the same period of 2024 driven by a $36.4 million gain recorded in connection with the sale of our Wholesale Business during the first quarter of 2024.

Current wording

Gain on divestitures decreased $36.9 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024 driven by a $35.1 million gain recorded during the first half of 2024 in connection with the sale of our Wholesale Business.

Previous wording

Loss on extinguishment and modification of debt of $2.4 million for the first quarter of 2025 relates to the January 2025 refinancing.

Current wording

Loss on extinguishment and modification of debt of $2.4 million for the year-to-date period ended June 30, 2025 relates to the January 2025 refinancing. Loss on extinguishment and modification of debt of $14.7 million for the quarter and year-to-date periods ended June 30, 2024 relates to a debt refinancing completed in May 2024.

Previous wording

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.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

(2)Organic revenue for the three months ended March 31, 2024 used to calculate organic revenue growth for the three months ended March 31, 2025 was $372.3 million, which is adjusted to exclude commissions and fees from divestitures that occurred during 2024 and 2025.

Current wording

(2)Organic revenue for the three and six months ended June 30, 2024 used to calculate organic revenue growth for the three and six months ended June 30, 2025 was $336.3 million and $708.6 million, respectively, which is adjusted to exclude commissions and fees from divestitures that occurred during 2024 and 2025.

Previous wording

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

Current wording

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

Previous wording

IAS commissions and fees increased $4.3 million year over year due primarily to organic growth in core commissions and fees. Growth in our core commissions and fees was driven by 14% sales velocity (new business as a percentage of prior year commissions and fees) compared to 17% in the prior-year period, which was an expected downtick relating to timing differences in net new business. In addition, client retention improved slightly year over year to approximately 92%. New business growth was offset by 800 bps of headwind in underlying rate and exposure change year over year, attributable to both softening insurance rate, particularly in the property line of business, as well as overall lower economic activity. In addition, profit-sharing revenue increased $1.2 million year over year primarily resulting from improvements in loss ratios and the number of policies sold.

Current wording

IAS commissions and fees increased $21.2 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024, due primarily to organic growth in core commissions and fees. Growth in our core commissions and fees was driven by 18% sales velocity compared to 20% in the prior-year period. New business growth was offset by 230 bps of headwind in underlying rate and exposure change year over year, attributable to softening insurance rates, particularly in the property line of business, as well as overall lower economic activity.

Previous wording

Other operating expenses for IAS increased $0.9 million year over year due primarily to higher costs for professional fees of $1.2 million.

Current wording

Other operating expenses for IAS increased $1.9 million for the quarter ended June 30, 2025 compared to the same period of 2024, due primarily to higher costs for professional fees of $1.1 million, advertising and marketing of $1.0 million and rent expense of $0.9 million, offset partially by lower travel and entertainment of $1.0 million.

Previous wording

Change in fair value of contingent consideration for IAS was a $7.1 million loss for the first quarter of 2025 compared to a $10.1 million loss for the first quarter of 2024. The fair value loss related to contingent consideration for the first quarter of 2025 was impacted by positive changes in revenue growth trends of certain partners, in addition to a $3.1 million loss recognized in connection with a reclassification from colleague earnout incentives.

Current wording

The change in fair value of contingent consideration was a $0.5 million gain for the quarter ended June 30, 2025 compared to a $3.8 million loss for the same period of 2024, and a $6.7 million loss for the year-to-date period ended June 30, 2025 compared to a $13.9 million loss for the same period of 2024. The fair value gain for the quarter ended June 30, 2025 was impacted by a gain recognized in reclassifying $1.5 million of colleague earnout incentives to colleague compensation and benefits. The fair value loss for the year-to-date period ended June 30, 2025 was impacted by positive changes in revenue growth trends of certain partners, in addition to a loss recognized in reclassifying $1.6 million of earnouts from colleague compensation and benefits.

Previous wording

UCTS consists of three distinct divisions—MSI, our Capacity Solutions group (which includes our reinsurance brokerage business, Juniper Re, and our captive management business), and the Captive business. Through MSI, we manufacture proprietary, technology-enabled insurance products with a focus on sheltered channels where our products deliver speed, ease of use and certainty of execution, an example of which is our national embedded renters insurance product sold at point of lease via integrations with property management software providers. Our MGA product suite is now comprised of more than 20 products across personal, commercial and professional lines. UCTS’ Wholesale Business was sold in the first quarter of 2024 and its operations are included in our results through February 29, 2024.

Current wording

UCTS consists of three distinct divisions—MSI, our Capacity Solutions group (which includes our reinsurance brokerage business, Juniper Re; our reinsurance MGA business, MultiStrat; and our captive management business), and the Captive business. Through MSI, we manufacture proprietary, technology-enabled insurance products with a focus on sheltered channels where our products deliver speed, ease of use and certainty of execution, an example of which is our national embedded renters insurance product sold at point of lease via integrations with property management software providers. Our MGA product suite is now comprised of more than 20 products across personal, commercial and professional lines. UCTS’ Wholesale Business was sold in the first quarter of 2024, and its operations are included in our results through February 29, 2024.

Previous wording

UCTS generates (i) commissions for underwriting and placing insurance policies on behalf of its insurance company partners; (ii) policy fee and installment fee revenue for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance company partners, including delivery of policy documents, processing payments and other administrative functions; (iii) profit-sharing income, generally based on the profitability of the underlying book of business of the policies it generates on behalf of its insurance company partners; (iv) fees from service fee arrangements, which are in place with certain customers for a negotiated fee; and (v) assumed premium earned in the Captive business.

Current wording

UCTS generates (i) commissions for underwriting and placing insurance policies and/or treaties on behalf of its insurance company partners and reinsurance company partners; (ii) policy fee and installment fee revenue for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance or reinsurance company partners, including delivery of policy documents, processing payments and other administrative functions; (iii) profit-sharing income, generally based on the profitability of the underlying book of business of the policies it generates on behalf of its insurance company partners and reinsurance company partners; (iv) fees from service fee arrangements, which are in place with certain customers for a negotiated fee; and (v) assumed premium earned in the Captive business.

Previous wording

UCTS commissions and fees increased $21.1 million year over year due primarily to organic growth in core commissions and fees. Growth in our core commissions and fees of $17.7 million was driven by continued outperformance in MSI (accounting for $17.5 million of the increase in core commissions and fees), building momentum in our Capacity Solutions group (accounting for $1.4 million of the increase in core commissions and fees), and the introduction of the Captive (accounting for $4.3 million of the increase in core commissions and fees), partially offset by a decrease in core commissions and fees of $5.5 million from our Wholesale Business that was sold in the first quarter of 2024 and for which there were no comparable revenues earned in the first quarter of 2025. UCTS profit-sharing and other revenue grew by $3.4 million year over year driven by timing differences. Core commissions and fees growth, excluding revenue related to the Wholesale Business during the first quarter of 2024, was 24%.

Current wording

UCTS commissions and fees increased $45.9 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024, due primarily to organic growth in core commissions and fees. Growth in our core commissions and fees of $43.0 million for the year-to-date period was driven by continued outperformance in MSI (accounting for $30.8 million of the increase in core commissions and fees), building momentum in our Capacity Solutions group (accounting for $8.0 million of the increase in core commissions and fees), and the introduction of the Captive (accounting for $9.8 million of the increase in core commissions and fees). Growth was partially offset by a decrease in core commissions and fees of $5.5 million from our Wholesale Business that was sold in the first quarter of 2024 and for which there were no comparable revenues earned in 2025. In addition, UCTS profit-sharing and other revenue grew $2.9 million for the year-to-date period driven by continued strong underwriting performance by MSI. Core commissions and fees growth, excluding revenue related to the Wholesale Business during the first half of 2024, was 23%.

Previous wording

Colleague compensation and benefits expense for UCTS decreased $1.4 million year over year primarily driven by a decrease in colleague compensation and benefits expense related to our Wholesale Business that was sold in the first quarter of 2024 of $1.4 million for which there was no comparable expense in the first quarter of 2025. After excluding colleague compensation and benefits expense related to the Wholesale Business, colleague compensation increased $1.2 million resulting from the growth in UCTS, offset by a decrease in benefits and other expense of $1.1 million.

Current wording

Colleague compensation and benefits expense for UCTS increased $5.8 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024. Colleague compensation and benefits expense for the year-to-date period of 2024 included $1.4 million related to our Wholesale Business for which there was no comparable expense in the same period of 2025. After excluding colleague compensation and benefits expense related to the Wholesale Business, colleague compensation increased $5.6 million resulting from the growth in UCTS, and benefits and other expense increased $1.1 million.

Previous wording

Outside commissions for UCTS consist of outside commissions paid to partners that distribute our MGA products. Outside commissions for UCTS increased $8.0 million, or 15%, after excluding outside commissions relating to the Wholesale Business during the first quarter of 2024 of $3.0 million.

Current wording

Outside commissions for UCTS consist of outside commissions paid to partners that distribute our MGA products. Outside commissions for UCTS increased $5.7 million, or 9%, for the quarter ended June 30, 2025 compared to the same period of 2024. Outside commissions for the quarter increased at a lower rate than core commissions and fees due to continued scaling of the business, product mix shift and increased contributions from the Capacity Solutions group (which generally does not have significant outside commissions).

Previous wording

Other operating expenses for UCTS increased $6.0 million year over year driven by higher incurred losses and LAE of $3.9 million related to our newly-established Captive business, professional fees of $1.7 million and licenses and taxes of $1.5 million.

Current wording

Other operating expenses for UCTS increased $10.5 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024 driven by higher incurred losses and LAE of $8.8 million related to our newly-established Captive business, professional fees of $1.8 million due to increased legal spend, and licenses and taxes of $1.3 million.

Previous wording

Total other income (expense), net for UCTS decreased $35.6 million year over year driven by a $36.4 million gain recorded in connection with the sale of our Wholesale Business during the first quarter of 2024.

Current wording

Total other income (expense), net for UCTS decreased $34.3 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024 driven by a $35.1 million gain recorded during the first half of 2024 in connection with the sale of our Wholesale Business.

Previous wording

MIS commissions and fees increased $6.1 million year over year primarily due to organic growth in core commissions and fees. Key drivers of the organic growth in MIS core commissions and fees included our Westwood business (accounting for $2.8 million of the year over year increase in core commissions and fees) and our legacy Mainstreet business (accounting for $2.6 million of the year over year increase in core commissions and fees). In addition, MIS profit-sharing and other revenue increased $1.6 million year over year primarily resulting from improvements in loss ratios and the number of policies sold.

Current wording

MIS commissions and fees decreased $0.6 million for the quarter ended June 30, 2025 compared to the same period of 2024, primarily due to a decrease in core commissions and fees, offset in part by an increase in profit-sharing and other. Key drivers of the $2.6 million decrease in MIS core commissions and fees included our legacy Mainstreet business (accounting for $2.2 million of the decrease in core commissions and fees) and our Westwood business (accounting for $0.6 million of the decrease in core commissions and fees). MIS profit-sharing and other revenue increased $2.0 million resulting from improvements in loss ratios and the number of policies sold.

Previous wording

Colleague compensation and benefits expense for MIS increased $0.8 million year over year due to an increase in inside advisor commissions.

Current wording

Colleague compensation and benefits expense for MIS increased $0.6 million and $1.5 million for the quarter and year-to-date periods ended June 30, 2025 compared to the same periods of 2024, respectively, due to increases in inside advisor commissions.

Previous wording

MIS amortization expense increased $1.1 million year over year primarily driven by an increase in capitalized software.

Current wording

MIS amortization expense increased $1.1 million and $2.2 million for the quarter and year-to-date periods ended June 30, 2025 compared to the same periods of 2024, respectively, driven by an increase in capitalized software.

Previous wording

Corporate and Other records the elimination of intercompany commissions revenue from the operating groups. During the first quarter of 2025, UCTS recorded commissions revenue shared with other operating groups of $18.1 million.

Current wording

Corporate and Other records the elimination of intercompany commission revenue from the operating groups. During the quarter and year-to-date periods of 2025, IAS recorded commission revenue shared with other operating groups of $0.2 million each and UCTS recorded commission revenue shared with other operating groups of $18.8 million and $36.9 million, respectively.

Previous wording

The year-over-year increase in intercompany commission is related to the QBE Program Administrator Agreement. We expect revenue recognized from this agreement to continue to grow as we serve as the MGA on more intersegment revenue such as homeowners insurance sold through MIS.

Current wording

The year-over-year increase in intercompany commission revenue is related to the QBE Program Administrator Agreement. We expect revenue recognized from this agreement to continue to grow as we serve as the MGA on more intersegment revenue such as homeowners insurance sold through MIS.

Previous wording

Outside commissions for Corporate and Other include the elimination of intercompany commissions expense from the operating groups.

Current wording

Outside commissions for Corporate and Other include the elimination of intercompany commission expense from the operating groups.

Previous wording

A significant portion of the year-over-year increase in intercompany commissions expense eliminated through Corporate and Other is related to the QBE Program Administrator Agreement. We expect intercompany commissions expense to continue to increase as we serve as the MGA on more intersegment revenue such as homeowners insurance sold through MIS.

Current wording

A significant portion of the year-over-year increase in intercompany commission expense eliminated through Corporate and Other is related to the QBE Program Administrator Agreement. We expect intercompany commission expense to continue to increase as we serve as the MGA on more intersegment revenue such as homeowners insurance sold through MIS.

Previous wording

Other operating expenses in Corporate and Other increased $3.8 million year over year due primarily to higher technology and software-related costs of $2.5 million.

Current wording

Other operating expenses in Corporate and Other increased $5.8 million for the year-to-date period ended June 30, 2025 compared to the same period of 2024, due primarily to higher technology and software-related costs of $2.8 million, professional fees of $1.4 million due to increased legal spend, and travel and entertainment of $0.9 million.

Previous wording

Interest expense, net, in Corporate and Other decreased $1.7 million year over year from lower average interest rates resulting from the January 2025 refinancing, offset in part by higher average borrowings. We expect interest expense to remain relatively flat in the near term on a year-over-year basis due to an anticipated increase in borrowings under our Revolving Facility to fund the settlement of contingent earnout liabilities, offset by lower expected average interest rates.

Current wording

Interest expense, net, in Corporate and Other decreased $1.8 million year-to-date period ended June 30, 2025 compared to the same period of 2024 resulting from lower average interest rates due to the January 2025 refinancing, offset in part by higher average borrowings. We expect interest expense to remain relatively flat in the near term on a year-over-year basis due to an increase in borrowings under our Revolving Facility to fund the settlement of contingent earnout liabilities and certain partnership opportunities, offset by lower expected average interest rates.

Previous wording

Loss on extinguishment and modification of debt in Corporate and Other of $2.4 million for the first quarter of 2025 relates to the January 2025 refinancing.

Current wording

Loss on extinguishment and modification of debt in Corporate and Other of $2.4 million for the first six months of 2025 relates to the January 2025 refinancing. Loss on extinguishment and modification of debt of $14.7 million for the quarter and year-to-date periods ended June 30, 2024 relates to a debt refinancing completed in May 2024.

Previous wording

Our primary liquidity needs for the foreseeable future will include cash to (i) provide capital to facilitate the organic growth of our business and to fund future partnerships, (ii) pay operating expenses, including cash compensation to our colleagues and expenses related to being a public company, (iii) make payments under the Tax Receivable Agreement, (iv) pay interest and principal due on borrowings under the 2024 Credit Facility and the Senior Secured Notes, (v) pay contingent earnout liabilities, (vi) pay income taxes, and (vii) fund potential investments in third party businesses that support the growth of our business, which may include Emerald Bay or sponsorship of, and a minority, non-controlling interest in, other investment funds, the purpose of which may include facilitating the establishment of additional and alternative capacity that supports the growth of our MSI business.

Current wording

Our primary liquidity needs for the foreseeable future will include cash to (i) provide capital to facilitate the organic growth of our business and to fund future partnerships, (ii) pay operating expenses, including cash compensation to our colleagues and expenses related to being a public company, (iii) make payments under the Tax Receivable Agreement, (iv) pay interest and principal due on borrowings under the 2024 Credit Facility and the Senior Secured Notes, (v) pay contingent earnout liabilities, (vi) pay income taxes, and (vii) fund potential investments in third party businesses that support the growth of our business, which may include sponsorship of, and a minority, non-controlling interest in, other investment funds, the purpose of which may include facilitating the establishment of additional and alternative capacity that supports the growth of our MSI business.

Previous wording

As of March 31, 2025, the 2024 Credit Facility provided for senior secured credit facilities in an aggregate principal amount of $1.54 billion, which consisted of (i) a term loan facility in the principal amount of $935.8 million, bearing interest at a rate of term SOFR, plus an applicable margin of 300 bps, with a margin step-down to 275 bps at a first lien net leverage ratio of 4.00x or below, maturing in May 24, 2031 (the “2025 Term Loan Facility”) and (ii) a revolving credit facility with commitments in an aggregate principal amount of $600 million, bearing interest at SOFR plus 210 bps to SOFR plus 310 bps based on total net leverage ratio maturing in May 24, 2029 (the “Revolving Facility”). As of March 31, 2025, Baldwin Holdings also had outstanding $600 million aggregate principal amount of 7.125% senior secured notes due May 15, 2031 (the “Senior Secured Notes”). Refer to Note 8 to our consolidated financial statements included in Part I, Item 1. Financial Statements of this report for more information relating to the terms of the Senior Secured Notes and 2024 Credit Facility.

Current wording

As of June 30, 2025, the 2024 Credit Facility provides for senior secured credit facilities in an aggregate principal amount of $1.54 billion, which consists of (i) a term loan facility in the principal amount of $935.8 million, bearing interest at a rate of term SOFR, plus an applicable margin of 300 bps, with a margin step-down to 275 bps at a first lien net leverage ratio of 4.00x or below, maturing May 24, 2031 (the “2025 Term Loan Facility”) and (ii) a revolving credit facility with commitments in an aggregate principal amount of $600 million, bearing interest at SOFR plus 210 bps to SOFR plus 310 bps based on total net leverage ratio maturing May 24, 2029 (the “Revolving Facility”). As of June 30, 2025, Baldwin Holdings also had outstanding $600 million aggregate principal amount of 7.125% senior secured notes due May 15, 2031 (the “Senior Secured Notes”). Refer to Note 9 to our consolidated financial statements included in Part I, Item 1. Financial Statements of this report for more information relating to the terms of the Senior Secured Notes and 2024 Credit Facility.