TWFG 2025 Q2 Earnings Profitability Grows Despite EPS Decline

TWFG reported its fiscal 2025 Q2 earnings on August 13th, 2025, delivering a revenue increase and higher net income despite a significant drop in EPS. The results reflect a strong quarter, with the company maintaining profitability for three consecutive years. Although no formal guidance was provided, the company signaled continued growth through M&A and expansion.

TWFG reported a 13.9% year-over-year increase in revenue, surpassing expectations with a 30.1% rise in net income. The company's strategy of sustained investment in new retail locations and market expansion is aligning with long-term growth ambitions, as highlighted by the CEO. Investors and analysts may view the results as largely in line with the company’s prior performance and long-term trajectory.

Revenue
TWFG's total revenue for Q2 2025 grew significantly to $59.92 million, driven by robust commission income of $54.56 million. Additional revenue streams, including $2.03 million in contingent income, $3.33 million in fee income, and $1.08 million in policy fees, further contributed to the top-line growth. Branch fees added $1.42 million to the total, while license fees, TPA fees, and other income sources contributed $559,000, $272,000, and $384,000 respectively.

Earnings/Net Income
TWFG’s net income surged by 30.1% to $9 million in Q2 2025, compared to $6.92 million in Q2 2024. Despite this, the company’s earnings per share (EPS) declined sharply by 98.8% to $0.13. While the net income growth is positive and indicative of strong operational performance, the sharp EPS decline raises concerns about profitability per share.

Price Action
Following the earnings release, TWFG's stock exhibited mixed performance. The stock price surged 12.28% on the most recent trading day and increased 1.00% during the full trading week. However, over the past month, the stock has declined by 13.96%, indicating a broader bearish trend in the near term.

Post-Earnings Price Action Review
The company’s shares have historically delivered strong returns when purchased 30 days after an earnings release following a quarter-over-quarter revenue increase over the past three years. This strategy resulted in a 28.14% return, significantly outperforming the benchmark by 16.84%. The strategy demonstrated strong risk management, with a maximum drawdown of 0.00% and a Sharpe ratio of 0.70, reinforcing its reliability.

CEO Commentary
Gordy Bunch, Founder, Chairman, and CEO, highlighted the company’s strong Q2 performance, noting a 13.8% year-over-year total revenue growth, 10.6% organic revenue growth, and 40.7% adjusted EBITDA growth. With an expanded adjusted EBITDA margin of 25.1%, the company’s profitability is improving. Bunch also emphasized the execution of the long-term growth strategy through four acquisitions, nine new retail branches, and expansion into Kentucky and Florida. He noted that newly onboarded agents typically take two to three years to reach full productivity, signaling a continued focus on strategic investments and market expansion.

Guidance
The company did not provide explicit numerical guidance for the upcoming periods. However, the CEO reiterated the company's continued focus on M&A and organic growth, as well as the expansion of distribution platforms through recruitment and acquisition. These strategic efforts are expected to support the company’s long-term growth trajectory.

Additional News
Nigeria’s Punch newspaper reported several notable developments in the business and political landscape around the time of TWFG’s earnings release. The Nigerian government approved the establishment of nine new private universities, signaling a major shift in the country's education sector. Meanwhile, Dangote Refinery restored fuel marketers amid growing pressure, addressing a key issue in the fuel distribution industry. Additionally, the government announced its intention to adopt Ghana’s customs funding model, aiming to improve revenue collection and reduce inefficiencies in the sector.