Baldwin Insurance Group, Inc.

Previous wording

We represent over three million clients across the United States and internationally. Our team now comprises approximately 5,000 colleagues—including those who joined us through our January 2026 partnerships. Among them are approximately 900 risk advisors, who are fiercely independent, relentlessly competitive and “insurance geeks.” We have approximately 125 offices in 24 states, all of which are equipped to provide diversified products and services to empower our clients at every stage through our three operating groups.

Current wording

We represent over three million clients across the United States and internationally. Our team comprises approximately 5,000 colleagues—including those who joined us through our January 2026 partnerships. Among them are approximately 800 risk advisors, who are fiercely independent, relentlessly competitive and “insurance geeks.” We have approximately 120 offices in 25 states, all of which are equipped to provide diversified products and services to empower our clients at every stage through our three operating groups.

Previous wording

We completed three partnerships for an aggregate purchase price of $1.6 billion during the three months ended March 31, 2026 as discussed further below. The operating results of these partnerships have been included in the condensed consolidated statements of comprehensive income (loss) from their respective acquisition dates.

Current wording

We completed three partnerships for an aggregate purchase price of $1.6 billion during the six months ended June 30, 2026 as discussed further below. The operating results of these partnerships have been included in the condensed consolidated statements of comprehensive income (loss) from their respective acquisition dates.

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, 2026 and 2025 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 six months ended June 30, 2026 and 2025 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, 2026 and 2025. Consolidated results of operations for the three months ended March 31, 2026 include the results of our CAC Group, Capstone and Obie partnerships from their respective acquisition dates.

Current wording

The following is a discussion of our consolidated results of operations for the three and six months ended June 30, 2026 and 2025. Consolidated results of operations for the three and six months ended June 30, 2026 include the results of the CAC Group, Capstone and Obie partnerships from their respective acquisition dates.

Previous wording

Commissions and fees increased $118.3 million, or 29%, year over year, driven by commissions and fees contributed by partnership activity of $111.5 million and organic growth in core commissions and fees of $11.3 million, offset in part by lower organic profit-sharing and other revenue of $4.4 million.

Current wording

Commissions and fees increased $112.5 million, or 30%, for the quarter ended June 30, 2026 compared to the same period of 2025, driven by commissions and fees contributed by partnership activity of $106.8 million and organic growth in profit-sharing and other revenue of $6.0 million, offset in part by lower organic core commissions and fees of $0.3 million.

Previous wording

Colleague compensation and benefits expense increased $85.6 million, or 43%, year over year. Partnership activity contributed $70.1 million, or 35%, to the increase in colleague compensation and benefits in 2026. After excluding partnership activity, colleague compensation and benefits increased $15.5 million, primarily resulting from the overall growth of the business and elevated health plan costs.

Current wording

Colleague compensation and benefits expense increased $154.4 million, or 39%, for the year-to-date period ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $139.9 million to the increase in colleague compensation and benefits. After excluding partnership activity, colleague compensation and benefits increased $14.6 million, primarily resulting from elevated health plan costs of $7.3 million, increased colleague compensation of $6.2 million and inside advisor commissions of $3.9 million related to the overall growth of the business, and higher severance of $3.1 million, offset in part by lower temporary help and performance bonuses of $7.8 million.

Previous wording

Other operating expenses increased $166.1 million year over year. Partnership activity contributed $16.2 million to the increase in other operating expenses in the first quarter of 2026. After excluding partnership activity, other operating expenses increased $149.9 million driven by a $128.8 million increase in Tax Receivable Agreement expense, higher Captive‑related operating expenses of $8.8 million, $7.7 million of transaction-related insurance premiums incurred in connection with the CAC Group partnership, higher professional fees of $4.8 million due to increased legal spend, and higher technology and software-related costs of $2.8 million. The increase in Tax Receivable Agreement expense relates to the recognition of a liability associated with expected future payments under the agreement. Historically, such amounts were not recorded as we did not expect to realize sufficient cash tax benefits. During the period, changes in our tax profile, including the recognition of deferred tax liabilities and other sources of taxable income, resulted in management concluding that a significant portion of the tax benefits associated with prior exchanges is expected to be realized. Accordingly, we recorded a liability representing its estimated obligation to share such realized tax benefits with Baldwin Holdings’ LLC Members. This amount was recorded to other operating expense as it reflects the recognition of previously unrecorded obligations, while future amounts arising from new redemptions or exchanges will be recorded through stockholders’ equity and subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between our annual tax filing date and the Tax Receivable Agreement payment date, will be recognized in the consolidated statements of comprehensive income (loss).

Current wording

Other operating expenses increased $204.1 million for the year-to-date period ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $32.6 million to the increase in other operating expenses. After excluding partnership activity, other operating expenses increased $171.5 million, driven by $128.8 million of additional Tax Receivable Agreement expense during 2026, $16.5 million of higher Captive‑related operating expenses, $14.9 million of higher professional fees due to increased legal spend, $7.7 million of transaction-related insurance premiums incurred in connection with the CAC Group partnership, and $6.0 million of higher technology and software-related cost. The increase in Tax Receivable Agreement expense relates to the recognition of a liability associated with expected future payments under the agreement. Historically, such amounts were not recorded as we did not expect to realize sufficient cash tax benefits. During the period, changes in our tax profile, including the recognition of deferred tax liabilities, resulted in management concluding that a significant portion of the tax benefits associated with prior exchanges is expected to be realized. Accordingly, we recorded a liability representing our estimated obligation to share such realized tax benefits with Baldwin Holdings’ LLC Members. This amount was recorded to other operating expense as it reflects the recognition of previously unrecorded obligations, while future amounts arising from new redemptions or exchanges will be recorded through stockholders’ equity and subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between our annual tax filing date and the Tax Receivable Agreement payment date, will be recognized in the condensed consolidated statements of comprehensive income (loss).

Previous wording

Amortization expense increased $29.2 million year over year, driven primarily by the impact of intangible assets recognized in connection with recent partnerships, including those completed in 2025 that are not reflected in our results for the comparative period. The increase also reflects higher amortization of internally developed software placed into service over the past year.

Current wording

Amortization expense increased $30.0 million and $59.2 million for the quarter and year-to-date periods ended June 30, 2026 compared to the same periods of 2025, respectively, driven primarily by the impact of intangible assets recognized in connection with recent partnerships, including those completed in 2025 that are not reflected in our results for the comparative period. The increase also reflects higher amortization of internally developed software placed into service over the past year.

Previous wording

Interest expense, net, increased $8.9 million year over year, resulting from higher average borrowings, offset in part by a lower average interest rate. We expect interest expense to grow in the near term on a year-over-year basis due to higher borrowings under the JPM Credit Facility to fund partnership opportunities and the settlement of deferred payment obligations, offset slightly by lower expected interest rates.

Current wording

Interest expense, net, increased $14.3 million and $23.3 million for the quarter and year-to-date periods ended June 30, 2026 compared to the same periods of 2025, respectively, resulting from higher average borrowings, offset in part by a lower average interest rate. We expect interest expense to grow in the near term on a year-over-year basis due to higher borrowings under the JPM Credit Facility to fund partnership opportunities and the settlement of deferred payment obligations, offset slightly by lower expected interest rates.

Previous wording

Loss on extinguishment and modification of debt of $7.4 million for the first quarter of 2026 and $2.4 million for the same period of 2025 relate to debt refinancing transactions completed during those periods.

Current wording

Losses on extinguishment and modification of debt of $7.5 million for the first half of 2026 and $2.4 million for the same period of 2025 relate to debt refinancing transactions completed during those periods.

Previous wording

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.

Current wording

Adjusted diluted EPS measures our per share earnings excluding certain items of income and expense 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.

Previous wording

(2)Organic revenue for the three months ended March 31, 2025 used to calculate organic revenue growth for the three months ended March 31, 2026 was $410.4 million, which is adjusted to exclude commissions and fees from divestitures that occurred during 2025.

Current wording

(2)Organic revenue for the three and six months ended June 30, 2025 used to calculate organic revenue growth for the three and six months ended June 30, 2026 was $376.3 million and $786.8 million, respectively, which is adjusted to exclude commissions and fees from divestitures that occurred during 2025.

Previous wording

(1) Income and other taxes include income tax benefit, Tax Receivable Agreement expense and other operating tax expense, such as state taxes, under GAAP.

Current wording

(2) Income and other taxes include income tax expense/benefit, Tax Receivable Agreement expense and other operating tax expense, such as state taxes, under GAAP.

Previous wording

(2)Transformation costs represent certain non-recurring colleague compensation and technology-related expenses related to our $3B/30 Catalyst Program, which is designed to accelerate the infusion of automation, business process optimization and artificial intelligence to transform and elevate our workforce and unlock new avenues for growth.

Current wording

(3)Transformation costs represent certain non-recurring colleague compensation and technology-related expenses related to our $3B/30 Catalyst Program, which is designed to accelerate the infusion of automation, business process optimization and artificial intelligence to transform and elevate our workforce and unlock new avenues for growth.

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

(1)Income tax expense includes income tax benefit and Tax Receivable Agreement expense.

Current wording

(1)Income tax expense includes income tax expense/benefit and Tax Receivable Agreement expense.

Previous wording

IAS results of operations for the three months ended March 31, 2026 include the results of our CAC Group and Capstone partnerships.

Current wording

IAS results of operations for the three and six months ended June 30, 2026 include the results of the CAC Group and Capstone partnerships.

Previous wording

IAS commissions and fees increased $103.0 million, or 45%, year over year, primarily due to the partnership contribution of $94.7 million. Growth in our core commissions and fees was driven by 13% sales velocity (new business as a percentage of prior year commissions and fees) compared to 14% in the prior-year period. Organic growth was pressured by 70 bps headwind in underlying rate and exposure during the current period resulting from continued rate softness, notably in commercial property lines.

Current wording

IAS commissions and fees increased $90.5 million, or 50%, for the quarter ended June 30, 2026 compared to the same period of 2025, primarily due to the partnership contribution of $94.1 million. Organic growth was pressured by a 240 bps headwind in underlying rate and exposure during the current period resulting from continued rate softness, notably in commercial property lines. Core commissions and fees benefited from 19% sales velocity (new business as a percentage of prior year commissions and fees) for legacy Baldwin, which compared to 22% in the prior-year period. Combined sales velocity including the 2026 partnerships was 30% for the second quarter of 2026.

Previous wording

UCTS commissions and fees increased $9.5 million, or 8%, year over year, primarily due to total growth in core commissions and fees of $12.0 million, which includes the Partnership contribution of $8.8 million. Organic growth in core commissions and fees includes $9.9 million from the Captive and $1.4 million from our Capacity Solutions group, offset in part by a $5.7 million reduction in MSI primarily driven by weakness in our E&S home programs as a result of the current property rate environment. In addition, profit sharing and other decreased $2.5 million year over year, driven by a non-recurring profit sharing payment in our real estate investor program received in the prior-year period.

Current wording

UCTS commissions and fees increased $21.9 million, or 8%, for the year-to-date period ended June 30, 2026 compared to the same period of 2025, primarily due to total growth in core commissions and fees of $21.8 million, which includes the partnership contribution of $14.5 million. Organic growth in core commissions and fees includes $19.7 million from the Captive, offset in part by a $6.3 million reduction in MSI primarily driven by weakness in our E&S home programs as a result of the current property rate environment, and a $3.1 million reduction in our Capacity Solutions group.

Previous wording

Colleague compensation and benefits expense for UCTS increased $9.2 million year over year. Partnership activity contributed $6.6 million to the increase in colleague compensation and benefits in the first quarter of 2026. After excluding partnership activity, colleague compensation and benefits increased $2.6 million as a result of the growth in UCTS and elevated health plan costs.

Current wording

Colleague compensation and benefits expense for UCTS increased $4.5 million for the quarter ended June 30, 2026 compared to the same period of 2025, primarily due to partnership activity, which contributed $4.6 million to the increase in colleague compensation and benefits. After excluding partnership activity, colleague compensation and benefits decreased $0.1 million, driven by lower temporary help, offset in part by higher colleague compensation relating to growth in UCTS and elevated health plan costs.

Previous wording

Outside commissions for UCTS decreased $3.4 million, or 6%, year over year. Outside commissions fluxed at a lower rate than core commissions and fees due to continued scaling of the business, product mix shift, and increased contributions from the Capacity Solutions group (which generally does not have significant outside commissions).

Current wording

Outside commissions for UCTS decreased $4.2 million and $7.6 million for the quarter and year-to-date periods ended June 30, 2026 compared to the same periods of 2025, respectively. Partnership activity contributed $4.4 million and $8.6 million to outside commissions for the quarter and year-to-date periods, respectively. After excluding partnership activity, outside commissions decreased $8.6 million and $16.2 million for the quarter and year-to-date periods, respectively. Outside commissions fluctuated at a lower rate than core commissions and fees reflecting continued benefits from scale, a shift in product mix, and increased contributions from the Capacity Solutions group (which generally does not have significant outside commissions).

Previous wording

Other operating expenses for UCTS increased $13.5 million year over year. Partnership activity contributed $2.5 million to the increase in other operating expenses in the first quarter of 2026. After excluding partnership activity, other operating expenses increased $11.1 million, driven primarily by higher Captive‑related operating expenses of $8.8 million, professional fees of $1.9 million from increased legal spend, and technology and software-related costs of $1.2 million, partially offset by a decrease in licenses and taxes of $1.2 million.

Current wording

Other operating expenses for UCTS increased $17.3 million for the quarter ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $1.7 million to the increase in other operating expenses. After excluding partnership activity, other operating expenses increased $15.6 million, driven primarily by higher Captive‑related operating expenses of $7.6 million, professional fees of $3.1 million from increased legal spend, and technology and software-related costs of $2.6 million.

Previous wording

Amortization expense for UCTS increased $5.6 million year over year, primarily due to the amortization of intangible assets recognized in connection with the Obie partnership in the first quarter of 2026, as well as higher amortization of internally developed software placed in service over the past year.

Current wording

Amortization expense for UCTS increased $5.7 million and $11.3 million for the quarter and year-to-date periods ended June 30, 2026 compared to the same periods of 2025, respectively, primarily due to the impact of intangible assets recognized in connection with partnership activity in the first quarter of 2026, as well as higher amortization of internally developed software placed in service over the past year.

Previous wording

MIS commissions and fees increased $3.8 million, or 5%, year over year. MIS core commissions and fees increased $4.2 million in total resulting from the recently acquired Hippo’s Homebuilder Distribution Network (accounting for $7.6 million of the increase in core commissions and fees) and our Mainstreet business (accounting for $1.0 million of the increase in core commissions and fees), partially offset by lower core commissions and fees from our Medicare business of $3.4 million and Westwood business of $1.0 million.

Current wording

MIS commissions and fees increased $12.6 million, or 9%, for the year-to-date period ended June 30, 2026 compared to the same period of 2025. MIS core commissions and fees increased $10.2 million in total resulting from the recently acquired Hippo’s Homebuilder Distribution Network (accounting for $14.0 million of the increase in core commissions and fees) and our Mainstreet business (accounting for $1.5 million of the increase in core commissions and fees), partially offset by lower core commissions and fees from our Medicare business of $5.2 million and Westwood business of $0.1 million. The Medicare business has been significantly disrupted by government funding rates associated with Medicare Advantage products, which has caused elevated churn. In addition, profit-sharing and other increased $2.4 million.

Previous wording

Effective May 1, 2025, we are receiving reduced commissions from QBE Insurance Corporation and its affiliates on the portion of our builder-sourced homeowners book of business we are rolling into the Reciprocal; a temporary headwind that is expected to persist through the first half of 2026 before reversing into a tailwind.

Current wording

Effective May 1, 2025, we are receiving reduced commissions from QBE Insurance Corporation and its affiliates on the portion of our builder-sourced homeowners book of business we are rolling into the Reciprocal; a temporary headwind that has persisted through the first half of 2026 expected to reverse into a tailwind during the latter half of the year.

Previous wording

Colleague compensation and benefits expense for MIS increased $2.6 million year over year. Partnership activity contributed $1.2 million to the increase in colleague compensation and benefits in the first quarter of 2026. After excluding Partnership activity, colleague compensation and benefits increased $1.4 million due to overall growth in the business and elevated health plan costs.

Current wording

Colleague compensation and benefits expense for MIS increased $2.4 million for the quarter ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $1.1 million to the increase in colleague compensation and benefits. After excluding partnership activity, colleague compensation and benefits increased $1.3 million primarily due to elevated health plan costs and higher severance.

Previous wording

MIS amortization expense increased $5.3 million year over year, primarily due to the amortization of intangible assets recognized in connection with a partnership completed in 2025 that is not reflected in our results for the comparative period. The increase also reflects higher amortization of internally developed software placed into service over the past year.

Current wording

MIS amortization expense increased $5.5 million and $10.8 million for the quarter and year-to-date periods ended June 30, 2026 compared to the same periods of 2025, respectively, primarily due to the impact of intangible assets recognized in connection with partnership activity completed during the third quarter of 2025, as well as higher amortization of internally developed software placed into service over the past year.

Previous wording

Corporate and Other records the elimination of intercompany commission revenue from the operating groups. During the first quarter of 2026, IAS recorded commission revenue shared with other operating groups of $0.2 million, and UCTS recorded commission revenue shared with other operating groups of $15.8 million.

Current wording

Corporate and Other reflects the elimination of intercompany commission revenue from the operating groups. During the quarter and year-to-date periods ended June 30, 2026, IAS recorded commission revenue shared with other operating groups of $0.2 million and $0.4 million, respectively, and UCTS recorded commission revenue shared with other operating groups of $18.0 million and $33.8 million, respectively.

Previous wording

Colleague compensation and benefits expense in Corporate and Other decreased $1.2 million year over year, driven by lower colleague compensation for the current period.

Current wording

Colleague compensation and benefits expense in Corporate and Other decreased $0.9 million and $2.1 million for the quarter and year-to-date periods ended June 30, 2026 compared to the same periods of 2025, respectively, driven by lower colleague compensation, offset in part by elevated health plan costs.

Previous wording

Other operating expenses in Corporate and Other increased $134.2 million year over year, driven primarily by higher Tax Receivable Agreement expense of $128.8 million and $7.7 million of transaction-related insurance premiums incurred in connection with the CAC Group partnership. The increase in Tax Receivable Agreement expense relates to the recognition of a liability associated with expected future payments under the agreement. Historically, such amounts were not recorded as we did not expect to realize sufficient cash tax benefits. During the period, changes in our tax profile, including the recognition of deferred tax liabilities and other sources of taxable income, resulted in management concluding that a significant portion of the tax benefits associated with prior exchanges is expected to be realized. Accordingly, we recorded a liability representing its estimated obligation to share such realized tax benefits with Baldwin Holdings’ LLC Members. This amount was recorded to other operating expense as it reflects the recognition of previously unrecorded obligations, while future amounts arising from new redemptions or exchanges will be recorded through stockholders’ equity and subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between our annual tax filing date and the Tax Receivable Agreement payment date, will be recognized in the consolidated statements of comprehensive income (loss).

Current wording

Other operating expenses in Corporate and Other increased $136.9 million for the year-to-date period ended June 30, 2026 compared to the same period of 2025, driven by $128.8 million of additional Tax Receivable Agreement expense and $7.7 million of transaction-related insurance premiums incurred in connection with the CAC Group partnership. The increase in Tax Receivable Agreement expense relates to the recognition of a liability associated with expected future payments under the agreement. Historically, such amounts were not recorded as we did not expect to realize sufficient cash tax benefits. During the period, changes in our tax profile, including the recognition of deferred tax liabilities, resulted in management concluding that a significant portion of the tax benefits associated with prior exchanges is expected to be realized. Accordingly, we recorded a liability representing our estimated obligation to share such realized tax benefits with Baldwin Holdings’ LLC Members. This amount was recorded to other operating expense as it reflects the recognition of previously unrecorded obligations, while future amounts arising from new redemptions or exchanges will be recorded through stockholders’ equity and subsequent changes in any of our estimates after the date of the redemption or exchange, as well as any interest accrued on the Tax Receivable Agreement between our annual tax filing date and the Tax Receivable Agreement payment date, will be recognized in the condensed consolidated statements of comprehensive income (loss).

Previous wording

Interest expense, net, in Corporate and Other increased $9.1 million year over year, resulting from higher average borrowings, offset in part by a lower average interest rate. We expect interest expense to grow in the near term on a year-over-year basis due to higher borrowings under the JPM Credit Facility to fund partnership opportunities and the settlement of deferred payment obligations, offset slightly by lower expected interest rates.

Current wording

Interest expense, net, in Corporate and Other increased $9.0 million and $18.1 million for the quarter and year-to-date periods ended June 30, 2026 compared to the same periods of 2025, respectively, resulting from higher average borrowings, offset in part by a lower average interest rate. We expect interest expense to grow in the near term on a year-over-year basis due to higher borrowings under the JPM Credit Facility to fund partnership opportunities and the settlement of deferred payment obligations, offset slightly by lower expected interest rates.

Previous wording

Loss on extinguishment and modification of debt in Corporate and Other of $7.4 million for the first quarter of 2026 and $2.4 million for the same period of 2025 relate to debt refinancing transactions completed during the periods.

Current wording

Loss on extinguishment and modification of debt in Corporate and Other of $7.5 million for the first half of 2026 and $2.4 million for the first half of 2025 related to debt refinancing transactions completed during the respective periods.

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 JPM Credit Facility and the Senior Secured Notes, (v) pay contingent earnout liabilities, (vi) pay income taxes, and (vii) fund potential investments in third party businesses that support the growth of our business, which may include sponsorship of, and a minority, noncontrolling interest in, other investment funds, the purpose of which may include facilitating the establishment of additional and alternative capacity that supports the growth of our MSI business.

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 JPM Credit Facility and the Senior Secured Notes, (v) pay contingent earnout liabilities and deferred payment obligations, (vi) pay income taxes, and (vii) fund potential investments in third party businesses that support the growth of our business, which may include sponsorship of, and a minority, noncontrolling interest in, other investment funds, the purpose of which may include facilitating the establishment of additional and alternative capacity that supports the growth of our MSI business.

Previous wording

As of March 31, 2026, the JPM Credit Agreement provides for senior secured credit facilities in an aggregate principal amount of $2.2 billion, which consists of (i) the Term Loans in the principal amount of $1.6 billion, bearing interest at a rate of term SOFR, plus an applicable margin of 250 bps, maturing May 24, 2031 and (ii) the Revolving Facility with commitments in an aggregate principal amount of $600 million, bearing interest at SOFR plus 185 bps to SOFR plus 260 bps based on total net leverage ratio, maturing May 24, 2029. As of March 31, 2026, we had $191.0 million outstanding under our Revolving Facility and $16.0 million of undrawn letters of credit issued thereunder.

Current wording

As of June 30, 2026, the JPM Credit Agreement provides for senior secured credit facilities in an aggregate principal amount of $2.2 billion, which consists of (i) the Term Loans in the principal amount of $1.6 billion, bearing interest at a rate of term SOFR, plus an applicable margin of 250 bps, maturing May 24, 2031 and (ii) the Revolving Facility with commitments in an aggregate principal amount of $600 million, bearing interest at SOFR plus 185 bps to SOFR plus 260 bps based on total net leverage ratio, maturing May 24, 2029. As of June 30, 2026, we had $302.0 million outstanding under our Revolving Facility and $38.6 million of undrawn letters of credit issued thereunder.

Previous wording

We utilize a floating-to-fixed interest rate swap agreement to mitigate our exposure to variability in cash flows due to changes in interest rates on our floating-rate debt. The interest rate swap agreement has a notional amount of $500 million, which exchanges the variable rate of the Term Loans, which are indexed to 1-month term SOFR, for a fixed rate of 3.244%. Interest payments will be made on a monthly basis commencing on October 14, 2025 through the termination date of September 14, 2028. The objective of the swap, for which we elected hedge accounting, is to manage our exposure to interest rate risk by converting a portion of the floating rate cash flows of the Term Loans into fixed rate payments.

Current wording

We utilize a floating-to-fixed interest rate swap agreement to mitigate our exposure to variability in cash flows due to changes in interest rates on our floating-rate debt. The interest rate swap agreement has a notional amount of $500 million, which exchanges the variable rate of the Term Loans, which are indexed to 1-month term SOFR, for a fixed rate of 3.244%. Interest payments are made monthly, beginning October 14, 2025, and continuing through the termination date of September 14, 2028. The objective of the swap, for which we elected hedge accounting, is to manage our exposure to interest rate risk by converting a portion of the floating rate cash flows of the Term Loans into fixed rate payments.

Previous wording

As of March 31, 2026, our cash and cash equivalents were $146.4 million and we had $393 million of available borrowing capacity on the Revolving Facility. We believe that our cash and cash equivalents, cash flow from operations and available borrowings will be sufficient to fund our working capital and meet our commitments for the next 12 months and beyond.

Current wording

As of June 30, 2026, our cash and cash equivalents were $184.5 million and we had $259.4 million of available borrowing capacity on the Revolving Facility. We believe that our cash and cash equivalents, cash flow from operations and available borrowings will be sufficient to fund our working capital and meet our commitments for the next 12 months and beyond.

Previous wording

(1)Represents noncancelable operating leases for our facilities. Operating lease expense was $6.1 million and $5.3 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(1)Represents noncancelable operating leases for our facilities. Operating lease expense was $12.4 million and $10.6 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Our contractual obligations and commitments are comprised of operating lease obligations, principal and interest payments on our borrowings under the Senior Secured Notes, Term Loans and Revolving Facility, estimated payments of contingent earnout liabilities and our commitment to the University of South Florida (“USF”).

Current wording

Our contractual obligations and commitments are comprised of operating lease obligations, principal and interest payments on our borrowings under the Senior Secured Notes, Term Loans and Revolving Facility, estimated payments of contingent earnout liabilities, deferred payment obligations, and our commitment to the University of South Florida (“USF”).

Previous wording

Our debt obligations at March 31, 2026 include borrowings outstanding under the Senior Secured Notes of $600 million, the Term Loans of $1.6 billion, and the Revolving Facility of $191.0 million. Estimated interest payments for outstanding borrowings under the Senior Secured Notes, Term Loans, and Revolving Facility in the table above were calculated based on the applicable interest rates at March 31, 2026 of 7.125%, 6.18% and 6.27%, respectively, through their respective due dates of May 15, 2031, May 24, 2031 and May 24, 2029.

Current wording

Our debt obligations at June 30, 2026 include borrowings outstanding under the Senior Secured Notes of $600 million, the Term Loans of $1.6 billion, and the Revolving Facility of $302.0 million. Estimated interest payments for outstanding borrowings under the Senior Secured Notes, Term Loans, and Revolving Facility in the table above were calculated based on the applicable interest rates at June 30, 2026 of 7.125%, 6.13% and 6.23%, respectively, through their respective due dates of May 15, 2031, May 24, 2031 and May 24, 2029.

Previous wording

Substantially all of our partnerships and certain acquisitions of select books of business that do not constitute a complete business enterprise include contractual earnout provisions. We record an estimation of the fair value of the contingent earnout obligations at the partnership date as a component of the consideration paid. Our contingent earnout obligations are measured at fair value each reporting period based on the present value of the expected future payments to be made to partners in accordance with the provisions outlined in the respective purchase agreements. The recorded obligations are based on estimates of the partners’ future performance using financial projections for the earnout period. The aggregate estimated contingent earnout liabilities included on our condensed consolidated balance sheet of $335.4 million at March 31, 2026 includes $280.1 million that must be settled in cash and the remaining $55.3 million can be settled in cash or stock at our option. The undiscounted estimated contingent earnout obligation presented in the table above represents the total expected future payments to be made to the partners. The undiscounted estimated contingent earnout obligation of $401.7 million at March 31, 2026 includes $325.6 million that must be settled in cash and the remaining $76.1 million can be settled in cash or stock at our option. The maximum estimated exposure to the contingent earnout liabilities was $589.4 million at March 31, 2026.

Current wording

Substantially all of our partnerships and certain acquisitions of select books of business that do not constitute a complete business enterprise include contractual earnout provisions. We record an estimation of the fair value of the contingent earnout obligations at the partnership date as a component of the consideration paid. Our contingent earnout obligations are measured at fair value each reporting period based on the present value of the expected future payments to be made to partners in accordance with the provisions outlined in the respective purchase agreements. The recorded obligations are based on estimates of the partners’ future performance using financial projections for the earnout period. The aggregate estimated contingent earnout liabilities included on our condensed consolidated balance sheet of $346.8 million at June 30, 2026 includes $289.7 million that must be settled in cash and the remaining $57.1 million can be settled in cash or stock at our option. The undiscounted estimated contingent earnout obligation presented in the table above represents the total expected future payments to be made to the partners. The undiscounted estimated contingent earnout obligation of $410.5 million at June 30, 2026 includes $326.5 million that must be settled in cash and the remaining $84.0 million can be settled in cash or stock at our option. The maximum estimated exposure to the contingent earnout liabilities was $699.9 million at June 30, 2026.