BWIN 10-K & 10-Q changes, risk factors and insider trading

Some of the factors that could materially and adversely affect our business, financial condition, results of operations or prospects,prospects include the following:

•We may incur significant additional indebtedness, which may affect our ability to satisfy our obligations under the 2024JPM Credit Agreement and indenture governing our Senior Secured Notes.

•Because the commissions and fees we earn on the sale of certain insurance products isare based on premiums and commission rates set by our insurance company partners, any decreases in these premiums or commission rates, or actions by our insurance company partners seeking repayment of commissions, could result in commissions and fees decreases or expenses to us.

•We are exposed to risk of impairment of goodwill. An impairment of goodwill could have a material adverse effect on our financial condition and results of operations.

•Our business may be harmed if we lose our relationships with insurance and reinsurance company partners, referral partners or other trading partners, fail to maintain good relationships with insurance and reinsurance company partners, referral partners or other trading partners, become dependent upon a limited number of insurance and reinsurance company partners, referral partners or other trading partners, or fail to develop new insurance and reinsurance company partner, referral partner or other trading partner relationships.

As of December 31, 2024,2025, our cash and cash equivalents were $148.1$123.7 million and we had $588.0$477.0 million of available borrowing capacity on the Revolving Facility under the 2024JPM Credit Agreement. We will continue to expend substantial cash resources for the foreseeable future for servicing our debt obligations and future earnout payment liabilities. Following the successful refinancing of our Term Loan B on January 10,2, 2025,2026, borrowings under our 2024JPM Credit Agreement include $935.8$1.604 millionbillion under the Term Loan B bearing interest of 7.30%,6.25%, maturing May 2031. ThereAs wereof noDecember 31, 2025, outstanding borrowings on the Revolving Facility,Facility whichwere has$107.0 anmillion, expirationbearing dateinterest ofat 6.39% and maturing May 2029, howeverand we had unused letters of credit issued under the Revolving Facility of $12.0$16.0 million. OnAs Mayof 24,December 2024,31, 2025, we issuedhad $600.0 million in aggregate principal amount of the 7.125% Senior Secured Notes due May 2031. In connection with certain prior partnerships and acquisitions of select books of business, we are required to pay contingent earnouts. Based on estimates of the partners’ future performance using financial projections for the earnout period, the aggregate estimated contingent earnout liabilities included on our consolidated balance sheet at December 31, 20242025 was $145.6$23.3 million, of which $4.7$9.2 million must be settled in cash and the remaining $140.8$14.1 million can be settled in cash or stock at our option. The undiscounted estimated contingent earnout obligation at December 31, 20242025 was $185.2$26.6 million, of which $5.0$9.2 million must be settled in cash and the remaining $180.2$17.4 million can be settled in cash or stock at our option. The maximum estimated exposure to the contingent earnout liabilities was $268.8$50.0 million at December 31, 2024.2025. In addition, in connection with our partnership with CAC Group, a nationally recognized specialty and middle-market insurance brokerage firm on January 1, 2026 (the CAC Group Transaction), we are required to pay a deferred cash consideration payment of $70.0 million in 2030 and a contingent earnout of up to $250.0 million. On January 2, 2026, Baldwin Holdings entered into an amendment to the JPM Credit Agreement that provided for $600.0 million of incremental term B loans, the proceeds of which Baldwin Holdings has used, and intends to use, to finance or refinance the cash consideration paid in connection with the CAC Group Transaction and for other permitted purposes, and which has increased our overall leverage and debt service requirements. There is no assurance that we will have sufficient cash flows from operating activities, cash on hand and available capital sources to service any indebtedness or pay contingent earnout liabilities when due, or finance other working capital needs, and failure to do so may result in a material adverse effect on our business, operations, and financial condition. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Commitments for further discussion of our debt obligations and contingent earnout liabilities.

As of December 31, 2024,2025, we had total consolidated debt outstanding of approximately $1.44$1.7 billion, collateralized by substantially all of Baldwin Holdings' assets, including a pledge of all equity securities Baldwin Holdings holds in each of its subsidiaries. During the year ended December 31, 2024,2025, we had debt servicing costs of $583.5$279.1 million, inclusive of $453.8$163.2 million in principal repayments and $111.4$115.3 million of interest payments. On January 2, 2026, we incurred an additional $600.0 million of incremental term B loans under the JPM Credit Agreement, increasing our indebtedness and related debt service obligations.

The 2024JPM Credit Agreement and indenture governing the Senior Secured Notes contain covenants that, among other things, restrict our ability to make certain restricted payments, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change our business or make certain investments and require us to comply with certain financial covenants. The restrictions in the 2024JPM Credit Agreement and indenture governing the Senior Secured Notes may prevent us from taking actions that we believe would be in the best interest of our business and our stockholders and may make it difficult for us to execute our business strategy successfully or effectively compete with companies that are not similarly restricted. We may also incur future debt obligations that might subject us to additional or more restrictive covenants that could affect our financial and operational flexibility, including our ability to pay dividends. We cannot make any assurances that we will be able to refinance our debt or obtain additional financing on terms acceptable to us, or at all. A failure to comply with the restrictions under the 2024JPM Credit Agreement and/or indenture governing the Senior Secured Notes could result in a default under the financing obligations or could require us to obtain waivers from our lenders for failure to comply with these restrictions. The occurrence of a default that remains uncured or the inability to secure a necessary consent or waiver could cause our obligations with respect to our debt to be accelerated and have a material adverse effect on our business, financial condition and results of operations.

We may incur significant additional indebtedness, which may affect our ability to satisfy our obligations under the 2024JPM Credit Agreement and indenture governing our Senior Secured Notes.

Under the terms of the 2024JPM Credit Agreement and indenture governing the Senior Secured Notes, we may be able to incur significant additional indebtedness, including secured indebtedness, in the future. For example, on January 2, 2026, we incurred $600.0 million of incremental term B loans under the JPM Credit Agreement in connection with the CAC Group Transaction. This could require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, reduce the availability of our cash flow to fund working capital and capital expenditures and execute on our partnership strategy, expose us to the risk of increased interest rates and increase our vulnerability to adverse economic or industry conditions. If new indebtedness is added to our current indebtedness levels, the related risks that we face could be increased, and we may not be able to meet all of our debt obligations. Furthermore, the terms of any future indebtedness we may incur could include more restrictive covenants, which could affect our financial and operational flexibility, including our ability to pay dividends.

Macroeconomic conditions, political events and other market conditions in the U.S. and around the world, including the recent resurgence of inflation and interest rate increases, and the risk that the U.S. economy will decelerate into a recession, affect the financial services industry. These conditions may reduce demand for our services or depress pricing for those services, which could have a material adverse effect on our costs and results of operations. Changes in macroeconomic and political conditions, such as the impact from rising inflation and interest rates could also shift demand to services for which we do not have a competitive advantage, and this could negatively affect the amount of business that we are able to obtain. Any changes in U.S. trade policy could trigger retaliatory actions by affected countries, resulting in “trade wars,” which could affect the volume of economic activity in the U.S., including demand for our services.

For example, the demand for insurance policies may be depressed by higher levels of inflation. In addition, a significant portion of our operating expenses goes to employee compensation and benefits, which, in addition to other areas of our operating expenses, are sensitive to inflation. To maintain our ability to successfully compete for the best talent, rising inflation rates may require us to provide compensation increases beyond historical increases, which may significantly increase our compensation costs. Consequently, inflation is expected to increase our operating expenses (both compensation and non-compensation related) over time and may adversely impact our results of operatingoperations and cash flow.flows.

Moreover, we have various agreements to lease office space located in 24 states throughout the U.S. and part of such leases contain effective annual rent escalations either fixed or indexed based on a consumer price index or other index. During higher inflationary periods, our rent expenses may increase significantly, which may adversely affect to our business, financial condition, results of operations, and cash flows.

Furthermore, during inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense in case we decide to refinance our existing long-term borrowings, including the 2024JPM Credit Agreement, or incur in any additional indebtedness.

Because the commissions and fees we earn on the sale of certain insurance products isare based on premiums and commission rates set by our insurance and reinsurance company partners, any decreases in these premiums or commission rates, or actions by our insurance company partners seeking repayment of commissions, could result in commissions and fees decreases or expenses to us.

We derive commissions and fees from the sale of insurance products that are paid by our insurance and reinsurance company partners from whom our clients purchase insurance. Because payments for the sale of insurance products are processed internally by our insurance and reinsurance company partners, we may not receive a payment that is otherwise expected in any particular period until after the end of that period, which can adversely affect our ability to budget for significant future expenditures. Additionally, our insurance and reinsurance company partners or their affiliates may, under certain circumstances, seek the chargeback or repayment of commissions as a result of policy lapse, surrender, cancellation, rescission, default or upon other specified circumstances. As a result of the chargeback or repayment of commissions, we may incur an expense in a particular period related to commissions and fees previously recognized in a prior period and reflected in our financial statements. Such an expense could have a material adverse effect on our financial condition and results of operations, particularly if the expense is greater than the amount of related commissions and fees retained by us.

The commission rates are set by our insurance and reinsurance company partners and are based on the premiums that the insurance and reinsurance company partners charge. The potential for changes in premium rates is significant, due to pricing cyclicality in the insurance market. In addition, the insurance industry has been characterized by periods of intense price competition due to excessive underwriting capacity and periods of favorable premium levels due to shortages of capacity. Capacity could also be reduced by our insurance and reinsurance company partners’ failing or withdrawing from writing certain coverages and/or geographic areas that we offer our clients. Commission rates and premiums can change based on prevailing legislative, economic and competitive factors that affect our insurance company partners. These factors, which are not within our control, include the capacity of our insurance and reinsurance company partners to place new business, underwriting and non-underwriting profits of our insurance and reinsurance company partners, consumer demand for insurance products, the availability of comparable products from other insurance companies at a lower cost and the availability of alternative insurance products, such as government benefits and self-insurance products, to consumers. We cannot predict the timing or extent of future changes in commission rates or premiums or the effect any of these changes will have on our business, financial condition and results of operations.

Strategic acquisitions to complement and further expand our business, which we refer to as partnerships, have been an important part of our competitive strategy. The acquisition landscape is competitivecompetitive. and accordinglyHowever, we do not expect that partnerships will be as important to our growth in 2025, although we will remain active and opportunistic in pursuing potential transactions. Our ability to identify and complete acquisitions, or if we are inefficient or unsuccessful at integrating any partner into our operations, may impact our ability to achieve our planned rates of growth or improve our market share, profitability or competitive position in specific markets or services. The process of integrating a partner has created, and will continue to create, operating difficulties. The risks we face include:

•failure to realize our strategic objectives for the partner or further develop the partner; and

•the consequences of the conduct of our acquired companies prior to their acquisition by us, including the occurrence of data breaches or other cybersecurity attacks during the integration of information systems, as well as increased costs associated with implementing state and regulatory compliance procedures, including data privacy and cybersecurity protections.protections; and

There may be liabilities that we fail to discover while conducting due diligence, that we inadequately assess or that are not properly disclosed to us. In particular, to the extent that any partner (i) failed to comply with or otherwise violated applicable laws or regulations, (ii) failed to fulfill contractual obligations to clients, insurance company partners or other third parties such as vendors, service providers or contracted agents, or (iii) incurred material liabilities or obligations to clients that are not identified during the diligence process, we, as the successor owner, may be financially responsible for these violations, failures and liabilities and may suffer financial or reputational harm or otherwise be adversely affected. In addition, as part of a partnership, we may assume responsibilities and obligations of the partner pursuant to the terms and conditions of agreements entered by the acquired entity that are not consistent with the terms and conditions that we typically accept and require. We also may be subject to litigation or other claims in connection with a partner, including claims from colleagues, clients, stockholders or other third parties. Any material liabilities we incur that are associated with our partnerships could harm our business, results of operations and financial condition. In addition, we have made, and will continue to make, assumptions and estimates relating to our partnerships, including regarding CAC Group’s business, that involve significant judgment and may prove to be materially inaccurate, including assumptions regarding future revenue and earnings, expenses and expense allocation, and integration timelines and costs.

Our partnership strategy is also affected by our ability to secure additional debt or equity financing in the future to fund acquisitions. We may not be able to obtain such additional financing or, if available, it may not be in amounts and on terms acceptable to us. To the extent we finance acquisitions or related deferred or contingent consideration through additional indebtedness or the issuance of equity, our interest expense may increase and/or our stockholders may experience dilution. We cannot predict or guarantee that we will successfully identify suitable acquisition candidates, consummate any partnership or integrate any partner.partner, including CAC Group. Any failure to do so could have an adverse impact on our business, results of operations and financial condition.

We are exposed to risk of impairment of goodwill. An impairment of goodwill could have a material adverse effect on our financial condition and results of operations.

Our business may be harmed if we lose our relationships with insurance and reinsurance company partners, referral partners or other trading partners, fail to maintain good relationships with insurance and reinsurance company partners, referral partners or other trading partners, become dependent upon a limited number of insurance and reinsurance company partners, referral partners or other trading partners or fail to develop new insurance and reinsurance company partner, referral partner or other trading partner relationships.

In the future, it may become necessary for us to offer insurance products from a reduced number of insurance and reinsurance company partners or to derive a greater portion of our commissions and fees from a more concentrated number of insurance and reinsurance company partners as our business and the insurance industry evolve. The number of referral and other trading partners we do business with could also be reduced in the future. Should our dependence on a smaller number of insurance and reinsurance company partners, referral partners or other trading partners increase, whether as a result of the termination of insurance and reinsurance company partner, referral partner or other trading partner relationships, the consolidation of insurance and reinsurance company partnerpartners, consolidationreferral partners or other trading partners, or otherwise, we may become more vulnerable to adverse changes in our relationships with ourthese insurance and reinsurance company partners,counterparties, particularly in states where we offer insurance products from a relatively small number of insurance and reinsurance company partners orpartners, where a small number of insurance companies dominate the market.market, or where a significant portion of our commission and fees is directly or indirectly derived from our relationships with referral partners or other trading partners. The termination, amendment or consolidation of our relationship with our insurance and reinsurance company partners, referral partners or other trading partners could harm our business, financial condition and results of operations.

Our results of operations depend on the continued capacity of our insurance and reinsurance company partners to underwrite risk and provide coverage, which in turn which depends on those insurance and reinsurance company partners’ ability to procure reinsurance. Capacity could also be reduced by insurance and reinsurance company partners failing or withdrawing from writing certain coverages that we offer to our clients. To the extent that reinsurance becomes less widely available or significantly more expensive, we may not be able to procure the amount or types of coverage that our clients desire, and the coverage we are able to procure for our clients may be more expensive or limited.

A variety of organizations have developed ratings to measure the performance of companies on ESG topics, and the results of these assessments are widely publicized. Investments in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG measures to their investment decisions. Unfavorable ratings of Baldwin or our industry, as well as omission of inclusion of our stock into ESG-oriented investment funds may lead to negative investor sentiment and the diversion of investment to other companies or industries, which could have a negative impact on the price of our stockClass price.A common stock.

In addition, the U.S. Federal Reserve has identified the climate as a systemic risk to the economy. It also reported that a gradual change in investor sentiment regarding climate risk introduces the possibility of abrupt tipping points or significant swings in sentiment, which could create unpredictable follow-on effects in financial markets. If this occurred, not only would we be negatively impacted by the general economic decline, but a drop in the stock market affecting the price of our Class A common stock price could negatively impact our ability to grow through mergers and acquisitions financed using our common stock.

State insurance laws grant supervisory agencies, including state departments of insurance, departments of financialsfinancial services, and similar regulatory authorities, broad administrative authority. State insurance regulators and the National Association of Insurance Commissioners continually review existing laws and regulations, some of which affect our business. These supervisory agencies regulate many aspects of the insurance business, including,including the licensing of insurance brokers and agents and other insurance intermediaries, the handling of third-party funds held in a fiduciary capacity and trade practices, such as marketing, advertising and compensation arrangements entered into by insurance brokers and agents. This legal and regulatory oversight could reduce our profitability or limit our growth by increasing the costs of legal and regulatory compliance, and by limiting or restricting the products or services we sell, the markets we serve or enter, the methods by which we sell our products and services, and the form of compensation we can accept from our clients, insurance company partners and third parties. Moreover, in response to perceived excessive cost or inadequacy of available insurance, states have from time to time created state insurance funds and assigned risk pools, which compete directly, on a subsidized basis, with private insurance providers.

At the federal level, we are subject to, among other laws, rules and regulations, the Gramm-Leach-Bliley Act ("GLBA"),GLBA, which requires financial institutions to, among other things, periodically disclose their privacy policies and practices relating to sharing personal information and, in some cases, enables retail customers to opt out of the sharing of certain personal information with unaffiliated third parties. The GLBA also requires financial institutions to implement an information security program that includes administrative, technical and physical safeguards to ensure the security and confidentiality of nonpublic personal information, which can include customer records and information. We are also subject to the rules and regulations promulgated under the authority of the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to data privacy and cybersecurity. Data privacy and cybersecurity are also areas of increasing state legislative focus and we are, or may in the future become, subject to various state laws and regulations regarding data privacy and cybersecurity. For example, the California Consumer Protection Act of 2018 (the “CCPA”), which became effective on January 1, 2020, applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds. The CCPA gives California residents the right to, among other things, request disclosure of information collected about them and whether that information has been sold to others, request deletion of personal information (subject to certain exceptions), opt out of the sale of their personal information, and not be discriminated against for exercising these rights. The CCPA contains several exemptions, including an exemption applicable to personal information that is collected, processed, sold or disclosed pursuant to the GLBA. Further, effective in most material respects starting on January 1, 2023, the California Privacy Rights Act (“CPRA”) has significantly modified the CCPA, including by expanding California residents’ rights with respect to certain sensitive personal information. The CPRA also creates a new state agency which will be vested with authority to implement and enforce the CCPA and the CPRA. Other states where we do business, or may in the future do business, or from which we otherwise collect, or may in the future otherwise collect, personal information of residents have adopted or are considering adopting similar laws. For example, Virginia and Colorado have recently adopted comprehensive data privacy laws similar to the CCPA, which went into effect in January and July of 2023, respectively. In addition, some states have passed laws that include affirmative data security obligations that may govern the ways in which we protect consumer information. For example, Massachusetts law requires, among other things, that covered entities develop, implement, and maintain a comprehensive, written information security program that is designed to protect personal information and that includes specific prescribed safeguards. Further, laws in all 50 U.S. states and U.S. territories generally require businesses to provide notice under certain circumstances to individuals (whether customers, prospects, employees, or otherwise) whose personal information has been improperly accessed, disclosed or otherwise compromised as a result of a data breach. Certain state laws and regulations may be more stringent, broader in scope, or offer greater individual rights, with respect to personal information than federal or other state laws and regulations, and such laws and regulations may differ from each other, which may complicate compliance efforts and increase compliance costs. Cybersecurity and data privacy laws are constantly evolving, and we may be required to modify our practices regularly in an effort to maintain our compliance with applicable law.

A group comprised of Lowry Baldwin, our Chairman; BIGH, LLC, an entity controlled by Lowry Baldwin; Elizabeth Krystyn; Laura Sherman; Trevor Baldwin, our Chief Executive Officer; Dan Galbraith, President, The Baldwin Group and CEO, Retail Brokerage Operations; Brad Hale, our Chief Financial Officer; and certain trusts established by such individuals, have entered into a Voting Agreement, as amended, with Lowry Baldwin, our Chairman, pursuant to which, in connection with any meeting of our stockholders or any written consent of our stockholders, each such person and trust party will agree to vote or exercise their right to consent in the manner directed by Lowry Baldwin. As of SeptemberDecember 30,31, 2024,2025, Lowry Baldwin through the Voting Agreement beneficially owns 23.9%16.98% of the voting power of our common stock.

Finally, because we are a holding company with no operations of our own, our ability to make payments under the Tax Receivable Agreement depends on the ability of Baldwin Holdings to make distributions to us. The 2024JPM Credit Agreement restricts the ability of Baldwin Holdings to make distributions to us, which could affect our ability to make payments under the Tax Receivable Agreement. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid, which could negatively impact our results of operations and could also affect our liquidity in periods in which such payments are made.

We may issue a substantial amount of our common stock in the future, which could cause dilution to investors and otherwise adversely affect the price of our stockClass price.A common stock.

A key element of our growth strategy is to make acquisitions. As part of our acquisition strategy, we may issue shares of our common stock, as well as LLC Units of Baldwin Holdings, as consideration for such acquisitions. These issuances could be significant. For example, we issued an aggregate of 23,951,021 shares of Class A common stock pursuant to various acquisition agreements we entered into in January 2026, including the CAC Group Transaction. To the extent that we make acquisitions and issue our shares of common stock as consideration, your equity interest in us will be diluted. Any such issuance will also increase the number of outstanding shares of common stock that will be eligible for sale in the future. Persons receiving shares of our common stock in connection with these acquisitions may be more likely to sell off their common stock, which may influence the price of our common stock. In addition, the potential issuance of additional shares in connection with anticipated acquisitions could lessen demand for our common stock and result in a lower price than might otherwise be obtained. We may issue a significant amount of our common stock in the future for other purposes as well, including in connection with financings, including to finance the cash portion of acquisition consideration to execute on our partnership strategy, for compensation purposes, in connection with strategic transactions or for other purposes.

We expect that the price of our Class A common stock price will be volatile, which could cause the value of your investment to decline, and you may not be able to resell your shares for a profit.

Our board of directors will periodically review the cash generated from our business and the capital expenditures required to finance our global growth plans and determine whether to declare periodic dividends to our stockholders. Our board of directors will take into account general economic and business conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, including restrictions and covenants contained in the 2024JPM Credit Agreement, business prospects and other factors that our board of directors considers relevant. In addition, the 2024JPM Credit Agreement limits the amount of distributions that Baldwin Holdings can make to us and the purposes for which distributions could be made. Accordingly, we may not be able to pay dividends to our Class A common stockholders even if our board of directors would otherwise deem it appropriate. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources for additional information.

Short selling could increase the volatility of our stockthe price of our Class A Common Stock.

The trading market for our Class A common stock will rely in part on the research and reports that industry or securities analysts publish about us or our business. We currently have research coverage by industry and securities analysts. If no or few analysts continue coverage of us, the trading price of our Class A common stock would likely decrease. If one or more of the analysts covering our business downgrade their evaluations of our Class A common stock, the price of our Class A common stock could decline. If one or more of these analysts cease to cover our Class A common stock, we could lose visibility in the trading market for our Class A common stock, which in turn could cause the price of our Class A common stock price to decline.

If we identify material weaknesses or significant deficiencies in our internal control over financial reporting in the future, or if we are unable to comply with the demands that will be placed upon us as a public company, including the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely manner, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC. In addition, if we are unable to disclose that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets, and the price of our Class A common stock price may be adversely affected.

Revenues for the year ended December 31, 20242025 were $1.4$1.5 billion, an increase of $170.5$115.8 million, or 14%,8%, year over year. Core commissions and fees grew organically by $190.0$98.5 million as a result of new and renewal business from clients across industry sectors and continued outperformance from MSI. Commissions and fees contributed by partnership activity were $23.6 million. In addition, profit-sharing and other revenue grew organically by $6.9$1.5 million as a function of improvements in loss ratios and the number of policies sold for MIS and IAS, offset in part by a reduction in UCTS profit-sharing revenue, which resulted from historically strong underwriting performance in 2023.million. This growth was offset in part by a decrease in commissions and fees of $28.8$5.8 million derivedrelated fromto the divestiture of our Wholesale Business between March and December of 2023, for which there were no comparable revenues earned in 2024 as a result of the sale of the business in the first quarter of 2024. In addition, investment income grew $5.2 million due to an improved cash management strategy and growing yield on our invested cash.

Interest expense, net, for the year ended December 31, 20242025 was $123.6$121.4 million, ana increasedecrease of $4.2$2.2 million, or 3%,2%, year over year. Interest expense, net, increasedyear, as a result of higherlower average borrowings,interest rates due to the 2025 Refinancings and federal rate reductions, offset in part by lowerhigher average interest rates resulting from our May 2024 debt refinancing and federal rate reductions.borrowings. We expect interest expense to remaingrow relativelyin flatthe near term on a year-over-year basis.basis Referdue to higher borrowings under the LiquidityJPM Credit Facility to fund partnership opportunities and Capitalthe Resourcessettlement sectionof furtherdeferred belowpayment forobligations, additionaloffset informationslightly onby ourlower Mayexpected 2024average refinancing.interest rates.

During the year ended December 31, 2024,2025, we reported a gain on divestitures of $39.0 million, which was driven by a $35.1 million gain recorded in connection with the sale of our Wholesale Business during the first quarter of 2024. We also reported a loss on extinguishment and modification of debt of $15.1$6.2 million related to ourthe May2025 2024 debt refinancing.Refinancings.

We earn commissions and fees by facilitating the arrangement between insurance company and reinsurance company partners and clients for the carrierinsurance 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.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 fulfilling specific targeted Medicare marketing campaigns.

Commissions and fees increased $165.3$116.6 million, or 14%,8%, year over year to $1.4$1.5 billionbillion, driven by organic growth in core commissions and fees of $190.0$98.5 million related to new and renewal business across client industry sectors and continued outperformance from MSI.MSI, Inpartnership addition,activity of $23.6 million, and organic growth in profit-sharing and other revenue grew organically $6.9 million as a function of improvements$1.5 in loss ratios and the number of policies sold for MIS and IAS, offset in part by a reduction in UCTS profit-sharing revenue, which resulted from historically strong underwriting performance in 2023.million. This growth was offset in part by a decrease in commissions and fees of $28.8$5.8 million derivedrelated fromto the divestiture of our Wholesale Business between March and December of 2023, for which there were no comparable revenues earned in 2024 as a result of the sale of the business in the first quarter of 2024.

Commissions, employeeColleague compensation and benefits is our largest expense. It consists of (i) base compensation comprising salary, bonuses and benefits paid and payable to colleagues, commissions paid to colleagues and outside commissions paid to others;colleagues, and (ii) equity-based compensation associated with the grants of restricted and unrestricted stock awards to senior management, colleagues, risk advisors and directors. We expect to continue to experience a general rise in commissions, employeecolleague compensation and benefits expense commensurate with expected revenue growth as our compensation arrangements with our colleagues and risk advisors contain significant bonus or commission components driven by the results of our operations. In addition, we operate in competitive markets for human capital and need to maintain competitive compensation levels as we expand geographically and create new products and services.

Interest expense, net, increaseddecreased $4.2$2.2 million year over year resultingas froma higherresult of lower average borrowings,interest rates due to the 2025 Refinancings and federal rate reductions, offset in part by lowerhigher average interest rates resulting from the May 2024 debt refinancing and federal rate reductions.borrowings. We expect interest expense to remaingrow relativelyin flatthe near term on a year-over-year basis due to an anticipated increase inhigher borrowings fromunder ourthe revolvingJPM creditCredit facilityFacility to fund partnership opportunities and the settlement of contingentdeferred earnoutpayment liabilities,obligations, offset slightly by lower expected average interest rates.

Gain on divestitures ofdecreased $39.0$38.7 million for the year endedover December 31, 2024 wasyear, driven by a $35.1 million gain recorded during 2024 in connection with the sale of our Wholesale Business during the first quarter of 2024.Business.

Loss on extinguishment and modification of debt of $6.2 million for the year ended December 31, 2025 relates to the 2025 Refinancings. Loss on extinguishment and modification of debt of $15.1 million for the yearsame endedperiod December 31,of 2024 relates to the JPM Credit Facility refinancing completed in May 2024 debt refinancing.2024.

Premiums,Assumed premiums, commissions and fees receivable, net increased $74.3$58.6 million andas premiumsa payableresult toof insurance companies increased $85.7 million. The increase in each can be attributed to ouroverall revenue growth and the timing of cash collections and payments.collections.

Intangible assets, net decreasedincreased $63.9$24.9 million asdriven aby resultthe intangible assets capitalized in conjunction with 2025 partnerships of amortization expense of $102.7$118.4 million, offset in part byand capitalized software development costs of $38.4 million related to infrastructure to support our business.business of $35.5 million, offset in part by amortization expense of $121.3 million.

Contingent earnout liabilities decreased $130.9$122.3 million resulting from settlements of $126.2$146.3 million, offset in part by issuances related to our 2025 partnerships of $18.4 million and aan changeincrease in fair value of contingent consideration gain of $4.9$5.6 million, which was impacted by the reclassification of $39.3 million of colleague earnout incentives to commissions, employee compensation and benefits expense.million.

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, transformation costs, 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 calculated as adjusted EBITDA divided by total revenues.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.

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, transformation costs, severance, and certain non-recurring costs that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments. We believe that adjusted net income is an appropriate measure of operating performance because it eliminates the impact of income and expenses that do not relate to business performance.

Adjusted diluted EPS measures our per share earnings excluding certain expenses as discussed above for adjusted net income and assuming all shares of Class B common stock were exchanged for Class A common stock on a one-for-one basis. Adjusted diluted EPS is calculated as adjusted net income divided by adjusted diluted weighted-average shares outstanding. We believe adjusted diluted EPS is useful to investors because it enables them to better evaluate per share operating performance across reporting periods.

(12) OtherIncome and other taxes in 2024 include the Tax Receivable Agreement expense and other operating tax expense, such as state taxes, under GAAP.

___________ (13) 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.

IAS commissions and fees increased $63.8$16.8 million, or 10%,2%, year over year to $706.2$723.0 millionmillion, primarily due primarily to organic growth in core commissions and fees. Growth in our core commissions and fees of $20.3 million was driven by 21%19% sales velocity (new business as a percentage of prior year commissions and fees), whichcompared improvedto 41021% bps overin the prior-yearprior period,year. and resultant new business across client industry sectors. New businessOrganic growth was offsetpressured by a 510380 bps of headwind in underlying rate and exposure yearduring overthe year, largely attributable to catastrophe-exposedsoftening realinsurance estaterates, andparticularly in the property line of business, construction project work weakness,weakness asand welloverall aslower economic activity. This growth was offset by a decrease in retentionprofit-sharing and other income of 140 bps, attributable to rate fatigue. In addition, profit-sharing revenue increased $3.2$3.5 million primarily resulting from improvementsrate in loss ratiossoftness and thecompetition numberamongst ofinsurance policiescarriers. sold.We expect rate softness to continue into 2026, with a focus on commercial property lines.

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 900800 risk advisors, who are fiercely independent, relentlessly competitive and “insurance geeks.” We have approximately 125120 offices in 2425 states, all of which are equipped to provide diversified products and services to empower our clients at every stage through our three operating groups.

•Underwriting, Capacity & Technology Solutions (“UCTS”) consists of three distinct divisions—MSI, our Capacity Solutions group (which includes our reinsurance brokerage business, Juniper Re,Re; our reinsurance MGA business, MultiStrat,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 this is our 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.

We completed three partnerships for an aggregate purchase price of $1.6 billion during the threesix months ended MarchJune 31,30, 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.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCHJUNE 31,30, 2026 AND 2025

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 threesix months ended MarchJune 31,30, 2026 and 2025 and the related notes and other financial information included elsewhere in this report.

The following is a discussion of our consolidated results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025. Consolidated results of operations for the three and six months ended MarchJune 31,30, 2026 include the results of ourthe CAC Group, Capstone and Obie partnerships from their respective acquisition dates.

Commissions and fees increased $118.3$112.5 million, or 29%,30%, yearfor overthe year,quarter ended June 30, 2026 compared to the same period of 2025, driven by commissions and fees contributed by partnership activity of $111.5$106.8 million and organic growth in core commissionsprofit-sharing and feesother revenue of $11.3$6.0 million, offset in part by lower organic profit-sharingcore commissions and other revenuefees of $4.4$0.3 million.

Colleague compensation and benefits expense increased $85.6$68.9 million, or 43%,35%, yearfor overthe year.quarter ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $70.1$69.8 million, or 35%,million to the increase in colleague compensation and benefits in 2026.benefits. After excluding partnership activity, colleague compensation and benefits increaseddecreased $15.5$1.0 million, primarilydriven resultingby fromlower thecosts overallrelated growthto temporary help and performance bonuses of the$5.1 businessmillion, colleague earnout incentives of $1.5 million and inside advisor commissions of $1.1 million, offset in part by elevated health plan costs.costs of $3.2 million, higher severance of $2.5 million and increased colleague compensation of $2.1 million.

Other operating expenses increased $166.1$204.1 million yearfor overthe year.year-to-date period ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $16.2$32.6 million to the increase in other operating expenses in the first quarter of 2026.expenses. After excluding partnership activity, other operating expenses increased $149.9$171.5 millionmillion, driven by a $128.8 million increaseof inadditional Tax Receivable Agreement expense,expense during 2026, $16.5 million of higher Captive‑related operating expensesexpenses, $14.9 million of $8.8higher million,professional fees due to increased legal spend, $7.7 million of transaction-related insurance premiums incurred in connection with the CAC Group partnership, higherand professional fees of $4.8$6.0 million due to increased legal spend, andof higher technology and software-related costs of $2.8 million.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 and other sources of taxable income,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 itsour 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).

Amortization expense increased $29.2$30.0 million yearand over$59.2 year,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.

Interest expense, net, increased $8.9$14.3 million yearand over$23.3 year,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.

LossLosses on extinguishment and modification of debt of $7.4$7.5 million for the first quarterhalf of 2026 and $2.4 million for the same period of 2025 relate to debt refinancing transactions completed during those periods.

Adjusted diluted EPS measures our per share earnings excluding certain expensesitems 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.

(2) Organic revenue for the three and six months ended MarchJune 31,30, 2025 used to calculate organic revenue growth for the three and six months ended MarchJune 31,30, 2026 was $410.4$376.3 million and $786.8 million, respectively, which is adjusted to exclude commissions and fees from divestitures that occurred during 2025.

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:

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

IAS results of operations for the three and six months ended MarchJune 31,30, 2026 include the results of ourthe CAC Group and Capstone partnerships.

IAS commissions and fees increased $103.0$90.5 million, or 45%,50%, yearfor overthe year,quarter ended June 30, 2026 compared to the same period of 2025, primarily due to the partnership contribution of $94.7$94.1 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 70a 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.

Colleague compensation and benefits expense for IAS increased $75.0$62.9 million yearfor overthe year.quarter Partnershipended activityJune 30, 2026 compared to the same period of 2025, primarily due to partnership activity, which contributed $62.2$64.1 million to the increase in colleague compensation and benefits in 2026.benefits. After excluding partnership activity, colleague compensation and benefits expense increased $12.7 million, primarily due to inside advisor commissions of $5.1 million, colleague compensation of $2.8 million and benefits and other ofdecreased $1.3 million,million driven by growthlower temporary help and performance bonuses, offset in part by elevated health plan costs.costs and higher severance.

Other operating expenses for IAS increased $19.1$18.9 million yearfor overthe year.quarter Partnershipended activityJune from30, CAC2026 Groupcompared andto Capstonethe same period of 2025, primarily due to partnership activity, which contributed $13.7$14.6 million to the increase in other operating expenses in the first quarter of 2026.expenses. After excluding partnership activity, other operating expenses increased $5.4$4.3 million, primarily due to higher costs for professional fees of $3.3$3.2 million from increased legal spend,spend and higher technology and software-related costs of $2.3$1.2 million.

Amortization expense for IAS increased $18.0$18.5 million yearand over$36.4 year,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 the CAC Group partnership completedactivity in the first quarter of 2026.

The change in fair value of contingent consideration for IAS was a $0.3$5.1 million loss for the first quarter ofended June 30, 2026 compared to a $7.1$0.5 million gain for the same period of 2025, and a $5.4 million loss for the year-to-date period ended June 30, 2026 compared to a $6.7 million loss for the same period of 2025. The fair value losslosses for the firstquarter quarterand year-to-date periods of 2026 wasreflect impactedimproved byprojected positiveoperating changesperformance for certain acquired businesses, which increased the estimated earnout obligations, in revenueaddition growthto trendsaccretion of certain partners.contingent earnout obligations approaching their respective measurement dates.

UCTS results of operations for the three and six months ended MarchJune 31,30, 2026 include the results of ourthe Obie partnership.

UCTS commissions and fees increased $9.5$12.4 million, or 8%,9%, yearfor overthe year,quarter ended June 30, 2026 compared to the same period of 2025, primarily due to total growth in core commissions and fees of $12.0$9.8 million, which includes the Partnershippartnership contribution of $8.8$5.7 million. Organic growth in core commissions and fees includes $9.9$9.8 million from the Captive and $1.4 million from our Capacity Solutions group,Captive, offset in part by a $5.7$4.5 million reduction in MSIour primarilyCapacity drivenSolutions bygroup weaknessand a $0.6 million reduction in our E&S home programs as a result of the current property rate environment.MSI. In addition, profit sharing and other decreasedincreased $2.5$2.7 million year over year, driven by a non-recurring profit sharing payment in our real estate investor program received in the prior-year period.year.

Colleague compensation and benefits expense for UCTS increased $9.2$4.5 million yearfor overthe year.quarter Partnershipended activityJune 30, 2026 compared to the same period of 2025, primarily due to partnership activity, which contributed $6.6$4.6 million to the increase in colleague compensation and benefits in the first quarter of 2026.benefits. After excluding partnership activity, colleague compensation and benefits increaseddecreased $2.6$0.1 millionmillion, asdriven aby resultlower oftemporary thehelp, offset in part by higher colleague compensation relating to growth in UCTS and elevated health plan costs.

Outside commissions for UCTS decreased $3.4$4.2 million,million orand 6%,$7.6 yearmillion overfor year.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 fluxedfluctuated at a lower rate than core commissions and fees due toreflecting continued scalingbenefits offrom thescale, business,a shift in product mix shift,mix, and increased contributions from the Capacity Solutions group (which generally does not have significant outside commissions).

Other operating expenses for UCTS increased $13.5$17.3 million yearfor overthe year.quarter ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $2.5$1.7 million to the increase in other operating expenses in the first quarter of 2026.expenses. After excluding partnership activity, other operating expenses increased $11.1$15.6 million, driven primarily by higher Captive‑related operating expenses of $8.8$7.6 million, professional fees of $1.9$3.1 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$2.6 million.

Amortization expense for UCTS increased $5.6$5.7 million yearand over$11.3 year,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 amortizationimpact of intangible assets recognized in connection with thepartnership Obie partnershipactivity in the first quarter of 2026, as well as higher amortization of internally developed software placed in service over the past year.

The change in fair value of contingent consideration for UCTS was a $1.4$5.4 million loss for the first quarter ofended June 30, 2026 compared to a $0.7$1.6 million gain for the same period of 2025, and a $6.9 million loss for the year-to-date period ended June 30, 2026 compared to a $0.8 million gain for the same period of 2025. The fair value losslosses for the firstquarter quarterand year-to-date periods of 2026 wasreflect impactedimproved byprojected positiveoperating changesperformance infor revenuecertain growthacquired trendsbusinesses, ofwhich itsincreased partners.the estimated earnout obligations.

MIS commissions and fees increased $3.8$8.8 million, or 5%,13%, yearfor overthe year.quarter ended June 30, 2026 compared to the same period of 2025. MIS core commissions and fees increased $4.2$6.0 million in total resulting from the recently acquired Hippo’s Homebuilder Distribution Network (accounting for $7.6$6.4 million of the increase in core commissions and fees), our Westwood business (accounting for $0.9 million of the increase in core commissions and fees) and our Mainstreet business (accounting for $1.0$0.5 million of the increase in core commissions and fees), partially offset by lower core commissions and fees from our Medicare business of $3.4$1.8 millionmillion. 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 Westwoodother businessincreased of $1.0$2.8 million.

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 ishas expected to persistpersisted through the first half of 2026 beforeexpected reversingto reverse into a tailwind.tailwind during the latter half of the year.

Colleague compensation and benefits expense for MIS increased $2.6$2.4 million yearfor overthe year.quarter ended June 30, 2026 compared to the same period of 2025. Partnership activity contributed $1.2$1.1 million to the increase in colleague compensation and benefits in the first quarter of 2026.benefits. After excluding Partnershippartnership activity, colleague compensation and benefits increased $1.4$1.3 million primarily due to overall growth in the business and elevated health plan costs.costs and higher severance.

MIS amortization expense increased $5.3$5.5 million yearand over$10.8 year,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 amortizationimpact of intangible assets recognized in connection with apartnership partnershipactivity completed in 2025 that is not reflected in our results forduring the comparativethird period.quarter Theof increase2025, alsoas reflectswell as higher amortization of internally developed software placed into service over the past year.