- Fourth Quarter 2024 Total Revenue Growth of
16%; Organic Revenue Growth(1) of 19% -
- Full Year 2024 Total Revenue Growth of 14%;
Organic Revenue Growth of 17% -
- Fourth Quarter 2024 Net Loss of $34.8 Million
and Diluted Loss Per Share of $0.31; Adjusted Diluted EPS(2) Growth
of 93% to $0.27 -
- Fourth Quarter 2024 Adjusted EBITDA(3) Growth
of 38% and Pro Forma Adjusted EBITDA(4) Growth of 42%
Year-Over-Year to $63.2 Million; Adjusted EBITDA Margin(3) of 19%,
a 310 Basis Point Expansion Compared to the Prior-Year Period -
- Full Year 2024 Adjusted EBITDA Margin of
22.5%, a 200 Basis Point Expansion Compared to 2023 -
The Baldwin Group, the brand name for The Baldwin Insurance
Group, Inc. (“Baldwin” or the “Company”) (NASDAQ: BWIN), an
independent insurance distribution firm delivering tailored
insurance solutions to a wide range of personal and commercial
clients, today announced its results for the fourth quarter and
full year ended December 31, 2024.
FOURTH QUARTER 2024 HIGHLIGHTS
- Total revenue increased 16% year-over-year to $329.9
million
- Organic revenue growth of 19% year-over-year
- GAAP net loss of $34.8 million and GAAP diluted loss per share
of $0.31
- Adjusted net income(2) of $32.1 million
- Adjusted diluted EPS grew 93% year-over-year to $0.27
- Adjusted EBITDA grew 38% year-over-year to $63.2 million
- Adjusted EBITDA margin of 19.1%, a 310 basis point expansion
compared to 16.0% in the prior year
- Pro forma adjusted EBITDA grew 42% year-over-year to $63.2
million
“We saw continued momentum across our business with organic
growth of 19% for the fourth quarter, 17% for the full year, and
double digits across all three of our segments showcasing the
strength of our colleague and client franchise,” said Trevor
Baldwin, Chief Executive Officer of The Baldwin Group. “Our
continued focus on efficient execution across our business and
thoughtful investments in innovative and proprietary technology
platforms delivered 200 basis points of adjusted EBITDA margin
expansion and adjusted free cash flow growth of 97% alongside our
industry leading organic growth profile in 2024. With the vast
majority of our earn-out obligations satisfied, we anticipate a
meaningful inflection in free cash flow generation and significant
growth and flexibility in capital allocation to support continued
strength in our financial performance.”
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2024, cash and cash equivalents were $148.1
million and the Company had $588.0 million of borrowing capacity
under its revolving credit facility.
FULL YEAR 2024 HIGHLIGHTS
- Total revenue increased 14% year-over-year to $1.4 billion
- Organic revenue growth of 17% year-over-year
- GAAP net loss of $41.1 million and GAAP diluted loss per share
of $0.39
- Adjusted net income of $176.9 million
- Adjusted diluted EPS grew 34% year-over-year to $1.50
- Adjusted EBITDA grew 25% year-over-year to $312.5 million
- Adjusted EBITDA margin of 22.5%, a 200 basis point expansion
compared to 20.5% in the prior year
- Pro forma adjusted EBITDA grew 27% year-over-year to $310.9
million
- Net cash provided by operating activities of $102.2
million
- Adjusted free cash flow(5) grew 97% year-over-year to $134.9
million
WEBCAST AND CONFERENCE CALL INFORMATION
Baldwin will host a webcast and conference call to discuss
fourth quarter 2024 results today at 5:00 PM ET. A live webcast and
a slide presentation of the conference call will be available on
Baldwin’s investor relations website at ir.baldwin.com. The dial-in
number for the conference call is (877) 451-6152 (toll-free) or
(201) 389-0879 (international). Please dial the number 10 minutes
prior to the scheduled start time.
A webcast replay of the call will be available at ir.baldwin.com
for one year following the call.
ABOUT THE BALDWIN GROUP
The Baldwin Group, the brand name for The Baldwin Insurance
Group, Inc. (NASDAQ: BWIN) and its affiliates, is an independent
insurance distribution firm providing indispensable expertise and
insights that strive to give our clients the confidence to pursue
their purpose, passion and dreams. As a team of dedicated
entrepreneurs and insurance professionals, we have come together to
help protect the possible for our clients. We do this by delivering
bespoke client solutions, services, and innovation through our
comprehensive and tailored approach to risk management, insurance,
and employee benefits. We support our clients, colleagues,
insurance company partners, and communities through the deployment
of vanguard resources and capital to drive our organic and
inorganic growth. The Baldwin Group proudly represents over three
million clients across the United States and internationally. For
more information, please visit www.baldwin.com.
FOOTNOTES
(1)
Organic revenue for the three and twelve
months ended December 31, 2023 used to calculate organic revenue
growth for the three and twelve months ended December 31, 2024 was
$274.6 million and $1.18 billion, respectively, which is adjusted
to exclude commissions and fees from divestitures that occurred
during the three and twelve months ended December 31, 2024. Organic
revenue and organic revenue growth are non-GAAP measures.
Reconciliation of organic revenue and organic revenue growth to
commissions and fees, the most directly comparable GAAP financial
measure, is set forth in the reconciliation table accompanying this
release.
(2)
Adjusted net income and adjusted diluted
EPS are non-GAAP measures. Reconciliation of adjusted net income to
net loss attributable to Baldwin and reconciliation of adjusted
diluted EPS to diluted loss per share, the most directly comparable
GAAP financial measures, are set forth in the reconciliation table
accompanying this release.
(3)
Adjusted EBITDA and adjusted EBITDA margin
are non-GAAP measures. Reconciliation of adjusted EBITDA and
adjusted EBITDA margin to net loss, the most directly comparable
GAAP financial measure, is set forth in the reconciliation table
accompanying this release.
(4)
Pro Forma adjusted EBITDA is a non-GAAP
measure. Reconciliation of Pro Forma adjusted EBITDA to net loss,
the most directly comparable GAAP financial measure, is set forth
in the reconciliation table accompanying this release.
(5)
Adjusted free cash flow is a non-GAAP
measure. Reconciliation of adjusted free cash flow to net cash
provided by operating activities, the most directly comparable GAAP
financial measure, is set forth in the reconciliation table
accompanying this release.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain various “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, which represent Baldwin’s expectations or
beliefs concerning future events. Forward-looking statements are
statements other than historical facts and may include statements
that address future operating, financial or business performance or
Baldwin’s strategies or expectations. In some cases, you can
identify these statements by forward-looking words such as “may,”
“might,” “will,” “should,” “expects,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “projects,” “potential,”
“outlook” or “continue,” or the negative of these terms or other
comparable terminology. Forward-looking statements are based on
management’s current expectations and beliefs and involve
significant risks and uncertainties that could cause actual
results, developments and business decisions to differ materially
from those contemplated by these statements.
Factors that could cause actual results or performance to differ
from the expectations expressed or implied in such forward-looking
statements include, but are not limited to, those described under
the caption “Risk Factors” in Baldwin’s Annual Report on Form 10-K
for the year ended December 31, 2024 and in Baldwin’s other filings
with the SEC, which are available free of charge on the SEC's
website at: www.sec.gov, including those risks and other factors
relevant to the business, financial condition and results of
operations of Baldwin. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated.
All forward-looking statements and all subsequent written and oral
forward-looking statements attributable to Baldwin or to persons
acting on behalf of Baldwin are expressly qualified in their
entirety by reference to these risks and uncertainties. You should
not place undue reliance on forward-looking statements.
Forward-looking statements speak only as of the date they are made,
and Baldwin does not undertake any obligation to update them in
light of new information, future developments or otherwise, except
as may be required under applicable law.
THE BALDWIN INSURANCE GROUP,
INC.
Consolidated Statements of
Comprehensive Loss
For the Three Months Ended
December 31,
For the Years Ended December
31,
(in thousands, except share and per
share data)
2024
2023
2024
2023
Revenues:
Commissions and fees
$
326,707
$
282,522
$
1,377,116
$
1,211,828
Investment income
3,185
2,126
11,921
6,727
Total revenues
329,892
284,648
1,389,037
1,218,555
Operating expenses:
Commissions, employee compensation and
benefits
278,452
234,695
1,032,048
911,354
Other operating expenses
51,168
49,013
192,366
190,267
Amortization expense
26,396
23,199
102,730
92,704
Change in fair value of contingent
consideration
(22,225
)
6,018
(4,949
)
61,083
Depreciation expense
1,575
1,448
6,194
5,698
Total operating expenses
335,366
314,373
1,328,389
1,261,106
Operating income (loss)
(5,474
)
(29,725
)
60,648
(42,551
)
Other income (expense):
Interest expense, net
(29,441
)
(31,865
)
(123,644
)
(119,465
)
Gain on divestitures
—
—
38,953
—
Loss on extinguishment and modification of
debt
(45
)
—
(15,113
)
—
Other expense, net
(299
)
(525
)
(194
)
(718
)
Total other expense
(29,785
)
(32,390
)
(99,998
)
(120,183
)
Loss before income taxes
(35,259
)
(62,115
)
(39,350
)
(162,734
)
Income tax expense (benefit)
(420
)
381
1,731
1,285
Net loss
(34,839
)
(62,496
)
(41,081
)
(164,019
)
Less: net loss attributable to
noncontrolling interests
(14,677
)
(28,013
)
(16,563
)
(73,878
)
Net loss attributable to Baldwin
$
(20,162
)
$
(34,483
)
$
(24,518
)
$
(90,141
)
Comprehensive loss
$
(34,839
)
$
(62,496
)
$
(41,081
)
$
(164,019
)
Comprehensive loss attributable to
noncontrolling interests
(14,677
)
(28,013
)
(16,563
)
(73,878
)
Comprehensive loss attributable to
Baldwin
(20,162
)
(34,483
)
(24,518
)
(90,141
)
Basic and diluted loss per share
$
(0.31
)
$
(0.56
)
$
(0.39
)
$
(1.50
)
Basic and diluted weighted-average shares
of Class A common stock outstanding
64,797,246
61,153,612
63,455,148
60,134,776
THE BALDWIN INSURANCE GROUP,
INC.
Consolidated Balance
Sheets
December 31,
(in thousands, except share and per
share data)
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
148,120
$
116,209
Restricted cash
164,649
104,824
Premiums, commissions and fees receivable,
net
702,096
627,791
Prepaid expenses and other current
assets
11,625
12,730
Assets held for sale
—
64,351
Total current assets
1,026,490
925,905
Property and equipment, net
21,972
22,713
Right-of-use assets
72,367
85,473
Other assets
48,041
38,134
Intangible assets, net
953,492
1,017,343
Goodwill
1,412,369
1,412,369
Total assets
$
3,534,731
$
3,501,937
Liabilities, Mezzanine Equity
and Stockholders’ Equity
Current liabilities:
Premiums payable to insurance
companies
$
641,267
$
555,569
Producer commissions payable
73,126
64,304
Accrued expenses and other current
liabilities
160,631
144,934
Related party notes payable
5,635
1,525
Colleague earnout incentives
32,826
8,020
Current portion of contingent earnout
liabilities
142,949
215,157
Liabilities held for sale
—
43,931
Total current liabilities
1,056,434
1,033,440
Revolving line of credit
—
341,000
Long-term debt, less current portion
1,398,054
968,183
Contingent earnout liabilities, less
current portion
2,610
61,310
Operating lease liabilities, less current
portion
68,775
78,999
Other liabilities
61
123
Total liabilities
2,525,934
2,483,055
Commitments and contingencies
Mezzanine equity:
Redeemable noncontrolling interest
453
394
Stockholders’ equity:
Class A common stock, par value $0.01 per
share, 300,000,000 shares authorized; 67,979,419 and 64,133,950
shares issued and outstanding at December 31, 2024 and 2023,
respectively
680
641
Class B common stock, par value $0.0001
per share, 100,000,000 shares authorized; 49,552,686 and 52,422,494
shares issued and outstanding at December 31, 2024 and 2023,
respectively
5
5
Additional paid-in capital
793,954
746,671
Accumulated deficit
(211,423
)
(186,905
)
Total stockholders’ equity attributable to
Baldwin
583,216
560,412
Noncontrolling interest
425,128
458,076
Total stockholders’ equity
1,008,344
1,018,488
Total liabilities, mezzanine equity and
stockholders’ equity
$
3,534,731
$
3,501,937
THE BALDWIN INSURANCE GROUP,
INC.
Consolidated Statements of
Cash Flows
For the Years Ended December
31,
(in thousands)
2024
2023
Cash flows from operating activities:
Net loss
$
(41,081
)
$
(164,019
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
108,924
98,402
Change in fair value of contingent
consideration
(4,949
)
61,083
Share-based compensation expense
65,503
60,008
Payment of contingent earnout
consideration in excess of purchase price accrual
(23,395
)
(24,326
)
Gain on divestitures
(38,953
)
—
Loss on extinguishment of debt
1,034
—
Amortization of deferred financing
costs
5,841
5,129
Loss on interest rate caps
244
1,670
Other loss
665
361
Changes in operating assets and
liabilities, net of effect of acquisitions and divestitures:
Premiums, commissions and fees receivable,
net
(73,762
)
(132,269
)
Prepaid expenses and other current
assets
(7,213
)
(6,849
)
Right-of-use assets
16,703
17,963
Accounts payable, accrued expenses and
other current liabilities
81,561
132,655
Colleague earnout incentives
24,806
8,020
Operating lease liabilities
(13,777
)
(13,184
)
Net cash provided by operating
activities
102,151
44,644
Cash flows from investing activities:
Proceeds from divestitures, net of cash
transferred
56,977
3,259
Capital expenditures
(41,049
)
(21,376
)
Cash consideration paid for asset
acquisitions
(268
)
(2,118
)
Investments in and loans to business
ventures
(3,861
)
(1,687
)
Proceeds from repayment of loans to
business ventures
1,500
—
Net cash provided by (used in) investing
activities
13,299
(21,922
)
Cash flows from financing activities:
Payment of contingent earnout
consideration up to amount of purchase price accrual
(98,678
)
(27,949
)
Proceeds from revolving line of credit
106,000
111,000
Payments on revolving line of credit
(447,000
)
(275,000
)
Proceeds from refinancing of long-term
debt
1,440,000
170,000
Payments relating to extinguishment and
modification of long-term debt
(996,177
)
—
Payments on long-term debt
(6,761
)
(9,376
)
Payments of deferred financing costs
(17,988
)
(4,998
)
Proceeds from the settlement of interest
rate caps
2,300
10,918
Tax distributions to Baldwin Holdings' LLC
Members
(11,076
)
(482
)
Proceeds from repayment of stockholder
notes receivable
—
42
Distributions to variable interest
entities
(264
)
(385
)
Net cash used in financing activities
(29,644
)
(26,230
)
Net increase (decrease) in cash and cash
equivalents and restricted cash
85,806
(3,508
)
Cash and cash equivalents and restricted
cash at beginning of year
226,963
230,471
Cash and cash equivalents and restricted
cash at end of year
$
312,769
$
226,963
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA, adjusted EBITDA margin, organic revenue,
organic revenue growth, adjusted net income, adjusted diluted
earnings per share (“EPS”), pro forma revenue, pro forma adjusted
EBITDA, pro forma adjusted EBITDA margin and adjusted net cash
provided by operating activities (“adjusted free cash flow”) are
not measures of financial performance under GAAP and should not be
considered substitutes for GAAP measures, including commissions and
fees (for organic revenue and organic revenue growth), revenues
(for pro forma revenue), net income (loss) (for adjusted EBITDA,
adjusted EBITDA margin, pro forma adjusted EBITDA and pro forma
adjusted EBITDA margin), net income (loss) attributable to Baldwin
(for adjusted net income), diluted earnings (loss) per share (for
adjusted diluted EPS) or net cash provided by (used in) operating
activities (for adjusted free cash flow), which we consider to be
the most directly comparable GAAP measures. These non-GAAP
financial measures have limitations as analytical tools, and when
assessing our operating performance, you should not consider these
non-GAAP financial measures in isolation or as substitutes for
commissions and fees, revenues, net income (loss), net income
(loss) attributable to Baldwin, diluted earnings (loss) per share,
net cash provided by (used in) operating activities or other
consolidated income statement data prepared in accordance with
GAAP. Other companies in our industry may define or calculate these
non-GAAP financial measures differently than we do, and
accordingly, these measures may not be comparable to similarly
titled measures used by other companies.
We define adjusted EBITDA as net income (loss) before interest,
taxes, depreciation, amortization, change in fair value of
contingent consideration and certain items of income and expense,
including share-based compensation expense, transaction-related
partnership and integration expenses, severance, and certain
non-recurring items, including those related to raising capital. We
believe that adjusted EBITDA is an appropriate measure of operating
performance because it eliminates the impact of income and expenses
that do not relate to business performance, and that the
presentation of this measure enhances an investor’s understanding
of our financial performance.
Adjusted EBITDA margin is adjusted EBITDA divided by total
revenues. Adjusted EBITDA margin is a key metric used by management
and our board of directors to assess our financial performance. We
believe that adjusted EBITDA margin is an appropriate measure of
operating performance because it eliminates the impact of income
and expenses that do not relate to business performance, and that
the presentation of this measure enhances an investor’s
understanding of our financial performance. We believe that
adjusted EBITDA margin is helpful in measuring profitability of
operations on a consolidated level.
Adjusted EBITDA and adjusted EBITDA margin have important
limitations as analytical tools. For example, adjusted EBITDA and
adjusted EBITDA margin:
- do not reflect any cash capital expenditure requirements for
the assets being depreciated and amortized that may have to be
replaced in the future;
- do not reflect changes in, or cash requirements for, our
working capital needs;
- do not reflect the impact of certain cash charges resulting
from matters we consider not to be indicative of our ongoing
operations;
- do not reflect the interest expense or the cash requirements
necessary to service interest or principal payments on our
debt;
- do not reflect share-based compensation expense and other
non-cash charges; and
- exclude certain tax payments that may represent a reduction in
cash available to us.
We calculate organic revenue based on commissions and fees for
the relevant period by excluding (i) the first twelve months of
commissions and fees generated from new partners and (ii)
commissions and fees from divestitures. Organic revenue growth is
the change in organic revenue period-to-period, with prior period
results adjusted to (i) include commissions and fees that were
excluded from organic revenue in the prior period because the
relevant partners had not yet reached the twelve-month owned mark,
but which have reached the twelve-month owned mark in the current
period, and (ii) exclude commissions and fees related to
divestitures from organic revenue. For example, revenues from a
partner acquired on June 1, 2023 are excluded from organic revenue
for 2023. However, after June 1, 2024, results from June 1, 2023 to
December 31, 2023 for such partners are compared to results from
June 1, 2024 to December 31, 2024 for purposes of calculating
organic revenue growth in 2024. Organic revenue growth is a key
metric used by management and our board of directors to assess our
financial performance. We believe that organic revenue and organic
revenue growth are appropriate measures of operating performance as
they allow investors to measure, analyze and compare growth in a
meaningful and consistent manner.
We define adjusted net income as net income (loss) attributable
to Baldwin adjusted for depreciation, amortization, change in fair
value of contingent consideration and certain items of income and
expense, including share-based compensation expense,
transaction-related partnership and integration expenses,
severance, and certain non-recurring costs that, in the opinion of
management, significantly affect the period-over-period assessment
of operating results, and the related tax effect of those
adjustments. We believe that adjusted net income is an appropriate
measure of operating performance because it eliminates the impact
of income and expenses that do not relate to business
performance.
Adjusted diluted EPS measures our per share earnings excluding
certain expenses as discussed above and assuming all shares of
Class B common stock were exchanged for Class A common stock on a
one-for-one basis. Adjusted diluted EPS is calculated as adjusted
net income divided by adjusted diluted weighted-average shares
outstanding. We believe adjusted diluted EPS is useful to investors
because it enables them to better evaluate per share operating
performance across reporting periods.
The pro forma information presented herein removes the effects
of 2024 divestitures for all periods in 2024 and 2023 as if the
divestitures had occurred on January 1, 2024 and January 1, 2023,
respectively. Pro forma revenue reflects GAAP revenues less revenue
derived from business divestitures that occurred during 2024.
Pro forma net income (loss) reflects GAAP net income (loss) less
net income or loss derived from business divestitures that occurred
during 2024, including the gain on divestitures. We define pro
forma adjusted EBITDA as pro forma net income (loss) before
interest, taxes, depreciation, amortization, change in fair value
of contingent consideration and certain items of income and
expense, including share-based compensation expense,
transaction-related partnership and integration expenses,
severance, and certain non-recurring costs, including those related
to raising capital, after removing the effect of divestitures that
occurred during 2024. We believe that pro forma adjusted EBITDA is
an appropriate measure of operating performance because it
eliminates the impact of income and expenses that do not relate to
ongoing business performance, and that the presentation of this
measure enhances an investor’s understanding of our financial
performance.
Pro forma adjusted EBITDA margin is pro forma adjusted EBITDA
divided by pro forma revenue. Pro forma adjusted EBITDA margin is a
key metric used by management and our board of directors to assess
our ongoing business performance. We believe that pro forma
adjusted EBITDA margin is an appropriate measure of operating
performance because it eliminates the impact of expenses that do
not relate to ongoing business performance, and that the
presentation of this measure enhances an investor’s understanding
of our financial performance. We believe that pro forma adjusted
EBITDA margin is helpful in measuring profitability of operations
on a consolidated level.
We calculate adjusted free cash flow because we hold fiduciary
cash designated for our insurance company partners on behalf of our
clients and incur substantial earnout liabilities in conjunction
with our partnership strategy. Adjusted free cash flow is
calculated as net cash provided by (used in) operating activities
excluding the impact of: (i) the change in premiums, commissions
and fees receivable, net; (ii) the change in accounts payable,
accrued expenses and other current liabilities; (iii) the payment
of contingent earnout consideration in excess of purchase price
accrual; and (iv) the payment of colleague earnout incentives. We
believe that adjusted free cash flow is an important measure of our
ability to generate cash from our business operations.
Reconciliation of guidance regarding adjusted EBITDA, organic
revenue growth, adjusted diluted EPS and adjusted free cash flow to
the most directly comparable GAAP measures is not available without
unreasonable efforts on a forward-looking basis due to the high
variability, complexity, and low visibility with respect to
commissions and fees, net income (loss), diluted earnings (loss)
per share, net cash provided by (used in) operating activities or
other consolidated income statement data prepared in accordance
with GAAP. The Company is currently unable to predict with a
reasonable degree of certainty the type and extent of items that
would be expected to impact these GAAP financial measures for these
periods. The unavailable information could have a significant
impact on the non-GAAP measures.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table reconciles adjusted EBITDA and adjusted
EBITDA margin to net loss, which we consider to be the most
directly comparable GAAP financial measure:
For the Three Months
Ended December 31,
For the Years Ended
December 31,
(in thousands, except
percentages)
2024
2023
2024
2023
Revenues
$
329,892
$
284,648
$
1,389,037
$
1,218,555
Net loss
$
(34,839
)
$
(62,496
)
$
(41,081
)
$
(164,019
)
Adjustments to net loss:
Interest expense, net
29,441
31,865
123,644
119,465
Amortization expense
26,396
23,199
102,730
92,704
Share-based compensation
18,739
9,585
65,503
56,222
Colleague earnout incentives
31,211
8,020
41,917
8,020
Gain on divestitures
—
—
(38,953
)
—
Loss on extinguishment and modification of
debt
45
—
15,113
—
Transaction-related partnership and
integration expenses
1,459
2,721
10,501
20,728
Income and other taxes(1)
3,884
381
7,184
1,285
Depreciation expense
1,575
1,448
6,194
5,698
Severance
2,202
15,141
5,756
18,514
Change in fair value of contingent
consideration
(22,225
)
6,018
(4,949
)
61,083
Loss on interest rate caps
—
1,181
244
1,670
Other(2)
5,272
8,545
18,682
28,834
Adjusted EBITDA
$
63,160
$
45,608
$
312,485
$
250,204
Net loss margin
(11
)%
(22
)%
(3
)%
(13
)%
Adjusted EBITDA margin
19.1
%
16.0
%
22.5
%
20.5
%
__________
(1)
Other taxes in 2024 include the Tax
Receivable Agreement expense and other operating tax expense, such
as state taxes, under GAAP.
(2)
Other addbacks to adjusted EBITDA include
certain income and expenses that are considered to be non-recurring
or non-operational, including certain recruiting costs,
professional fees, litigation costs and bonuses.
Organic Revenue and Organic Revenue Growth
The following table reconciles organic revenue and organic
revenue growth to commissions and fees, which we consider to be the
most directly comparable GAAP financial measure:
For the Three Months Ended
December 31,
For the Years Ended December
31,
(in thousands, except
percentages)
2024
2023
2024
2023
Commissions and fees
$
326,707
$
282,522
$
1,377,116
$
1,211,828
Partnership commissions and fees(1)
—
—
—
(44,696
)
Organic revenue
$
326,707
$
282,522
$
1,377,116
$
1,167,132
Organic revenue growth(2)
$
52,078
$
36,742
$
196,922
$
187,213
Organic revenue growth %(2)
19
%
15
%
17
%
19
%
__________
(1)
Includes the first twelve months of such
commissions and fees generated from newly acquired partners.
(2)
Organic revenue for the three and twelve
months ended December 31, 2023 used to calculate organic revenue
growth for the three and twelve months ended December 31, 2024 was
$274.6 million and $1.18 billion, respectively, which is adjusted
to exclude commissions and fees from divestitures that occurred
during 2024.
Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles adjusted net income to net loss
attributable to Baldwin and reconciles adjusted diluted EPS to
diluted loss per share, which we consider to be the most directly
comparable GAAP financial measures:
For the Three Months
Ended December 31,
For the Years Ended
December 31,
(in thousands, except per share
data)
2024
2023
2024
2023
Net loss attributable to Baldwin
$
(20,162
)
$
(34,483
)
$
(24,518
)
$
(90,141
)
Net loss attributable to noncontrolling
interests
(14,677
)
(28,013
)
(16,563
)
(73,878
)
Amortization expense
26,396
23,199
102,730
92,704
Share-based compensation
18,739
9,585
65,503
56,222
Colleague earnout incentives
31,211
8,020
41,917
8,020
Gain on divestitures
—
—
(38,953
)
—
Loss on extinguishment and modification of
debt
45
—
15,113
—
Transaction-related partnership and
integration expenses
1,459
2,721
10,501
20,728
Income tax expense
4,386
—
6,537
—
Depreciation
1,575
1,448
6,194
5,698
Amortization of deferred financing
costs
1,422
1,552
5,841
5,129
Severance
2,202
15,141
5,756
18,514
Change in fair value of contingent
consideration
(22,225
)
6,018
(4,949
)
61,083
Loss on interest rate caps, net of cash
settlements
—
4,206
2,544
12,588
Other(1)
5,272
8,545
18,682
28,834
Adjusted pre-tax income
35,643
17,939
196,335
145,501
Adjusted income taxes(2)
3,528
1,776
19,437
14,405
Adjusted net income
$
32,115
$
16,163
$
176,898
$
131,096
Weighted-average shares of Class A common
stock outstanding - diluted
64,797
61,154
63,455
60,135
Dilutive weighted-average shares of Class
A common stock
3,699
3,709
3,598
3,874
Exchange of Class B common stock(3)
49,888
52,434
50,896
53,132
Adjusted diluted weighted-average shares
outstanding
118,384
117,297
117,949
117,141
Diluted loss per share
$
(0.31
)
$
(0.56
)
$
(0.39
)
$
(1.50
)
Effect of exchange of Class B common stock
and net loss attributable to noncontrolling interests per share
0.02
0.03
0.04
0.10
Other adjustments to loss per share
0.59
0.69
2.01
2.64
Adjusted income taxes per share
(0.03
)
(0.02
)
(0.16
)
(0.12
)
Adjusted diluted EPS
$
0.27
$
0.14
$
1.50
$
1.12
___________
(1)
Other addbacks to adjusted net income
include certain income and expenses that are considered to be
non-recurring or non-operational, including certain recruiting
costs, professional fees, litigation costs and bonuses.
(2)
Represents corporate income taxes at
assumed effective tax rate of 9.9% applied to adjusted pre-tax
income.
(3)
Assumes the full exchange of Class B
common stock for Class A common stock pursuant to the Amended LLC
Agreement.
Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA
Margin
The following table reconciles pro forma revenue to revenues and
reconciles pro forma adjusted EBITDA and pro forma adjusted EBITDA
margin to net loss, which we consider to be the most directly
comparable GAAP financial measures:
For the Three Months
Ended December 31,
For the Years Ended
December 31,
(in thousands, except
percentages)
2024
2023
2024
2023
Revenues
$
329,892
$
284,648
$
1,389,037
$
1,218,555
Less revenues from 2024
divestitures(1)
—
(8,031
)
(6,260
)
(35,161
)
Pro forma revenue
$
329,892
$
276,617
$
1,382,777
$
1,183,394
Net loss
$
(34,839
)
$
(62,496
)
$
(41,081
)
$
(164,019
)
Less net income from 2024
divestitures(2)
—
(422
)
(39,264
)
(3,616
)
Pro forma net loss
(34,839
)
(62,918
)
(80,345
)
(167,635
)
Adjustments to pro forma net loss:
Interest expense, net
29,441
31,865
123,644
119,465
Amortization expense
26,396
22,723
102,730
90,800
Share-based compensation
18,739
9,585
65,503
56,222
Colleague earnout incentives
31,211
8,020
41,917
8,020
Loss on extinguishment and modification of
debt
45
—
15,113
—
Transaction-related partnership and
integration expenses
1,459
2,721
9,451
20,728
Income and other taxes
3,884
381
7,184
1,285
Depreciation expense
1,575
1,439
6,194
5,653
Severance
2,202
15,132
5,729
18,262
Change in fair value of contingent
consideration
(22,225
)
6,018
(4,949
)
61,061
Loss on interest rate caps
—
1,181
244
1,670
Other(3)
5,272
8,181
18,473
28,464
Pro forma Adjusted EBITDA
$
63,160
$
44,328
$
310,888
$
243,995
Net loss margin
(11
)%
(22
)%
(3
)%
(13
)%
Pro forma Adjusted EBITDA Margin
19
%
16
%
22
%
21
%
___________
(1)
The adjustments exclude revenue from 2024
divestitures for quarter-to-date and year-to-date periods in 2024
and 2023 as if the divestitures had occurred on January 1, 2024 and
January 1, 2023, respectively.
(2)
The adjustments exclude net income from
2024 divestitures, including the gain on divestitures, for
quarter-to-date and year-to-date periods in 2024 and 2023 as if the
divestitures had occurred on January 1, 2024 and January 1, 2023,
respectively.
(3)
Other addbacks to pro forma adjusted
EBITDA include certain expenses that are considered to be
non-recurring or non-operational, including certain recruiting
costs, professional fees, litigation costs and bonuses.
Adjusted Net Cash Provided by Operating Activities (“Adjusted
Free Cash Flow”)
The following table reconciles adjusted free cash flow to net
cash provided by operating activities, which we consider to be the
most directly comparable GAAP financial measure:
For the Years Ended
December 31,
(in thousands)
2024
2023
Net cash provided by operating
activities
$
102,151
$
44,644
Adjustments to net cash provided by
operating activities:
Change in premiums, commissions and fees
receivable, net
73,762
132,269
Change in accounts payable, accrued
expenses and other current liabilities(1)
(81,561
)
(132,655
)
Payment of contingent earnout
consideration in excess of purchase price accrual
23,395
24,326
Payment of colleague earnout
incentives
17,112
—
Adjusted free cash flow(2)
$
134,859
$
68,584
___________
(1)
Change in accounts payable,
accrued expenses and other current liabilities for the year ended
December 31, 2023 has been recast to conform to current year
presentation, which excludes the effect of the change in colleague
earnout incentives.
(2)
Without the impact of one-time,
third-party refinancing costs of $14.0 million incurred during
2024, adjusted free cash flow would have expanded 117%
year-over-year to $148.9 million for the year ended December 31,
2024.
COMMONLY USED DEFINED TERMS
The following terms have the following meanings throughout this
press release unless the context indicates or requires
otherwise:
Amended LLC Agreement
Third Amended and Restated Limited
Liability Company Agreement of The Baldwin Insurance Group
Holdings, LLC, as amended
clients
Our insureds
colleagues
Our employees
GAAP
Accounting principles generally accepted
in the United States of America
insurance Company partners
Insurance companies with which we have a
contractual relationship
partners
Companies that we have acquired, or in the
case of asset acquisitions, the producers
partnerships
Strategic acquisitions made by the
Company
SEC
U.S. Securities and Exchange
Commission
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250225815287/en/
INVESTOR RELATIONS
Bonnie Bishop, Executive Director, Investor Relations The
Baldwin Group (813) 259-8032 | IR@baldwin.com
MEDIA RELATIONS
Anna R. Rozenich, Senior Director - Enterprise Communications
The Baldwin Group (630) 561-5907 | anna.rozenich@baldwin.com
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