Financial Analysis

Business Combinations The Company completed three business combinations for an aggregate purchase price of $1.6 billion during the six months ended June 30, 2026. In accordance with ASC Topic 805, Business Combinations (Topic 805), total consideration was first allocated to the fair value of assets acquired, including liabilities assumed, with the excess being recorded as goodwill. For financial statement purposes, goodwill is not amortized but rather is evaluated for impairment at least annually or more frequently if an event or change in circumstances occurs that indicates goodwill may be impaired. Approximately 31% of goodwill recorded from business combinations during the six months ended June 30, 2026 is deductible for income tax purposes. The deductible goodwill is amortized over a period of 15 years for tax reporting purposes. The Company completed the following business combinations during the six months ended June 30, 2026: The Company acquired the outstanding equity interests of the business of Cobbs Allen Capital Holdings, LLC (CAC Group), an Insurance Advisory Solutions partner effective January 1, 2026 , to significantly expand Baldwins specialty capabilities and strengthen its specialty product lines and data and analytics platform. The Company acquired the outstanding equity interests of Creisoft, Inc. (Obie), an Underwriting, Capacity & Technology Solutions partner effective January 2, 2026, to expand access to embedded insurance distribution capabilities …

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Commitments and Contingencies Commitments As of June 30, 2026, Baldwin Holdings has a remaining commitment to the University of South Florida (USF) to donate $2.5 million through October 2028. The gift will provide support for the School of Risk Management and Insurance in the USF Muma College of Business. It is currently anticipated that Lowry Baldwin, the Companys Chairman, will fund half of the amounts to be donated by the Company. Legal Proceedings The Company is involved in various claims and legal actions arising in the ordinary course of business. A liability is recorded when a loss is considered probable and is reasonably estimable in accordance with GAAP. When a material loss contingency is reasonably possible but not probable, the Company will disclose the nature of the claim and, if possible, an estimate of the loss or range of loss. In the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the Companys consolidated financial position, results of operations or liquidity. On February 8, 2023, Ruby Wagner, a putative Class A stockholder of the Company, filed a class action lawsuit (the Lawsuit), on behalf of herself and other similarly situated stockholders in the Delaware Court of Chancery against the Company seeking declaratory judgment that certain provisions of the 2019 Stockholders Agreement between the Company and the Pre-IPO LLC Members were invalid and unenforceable as a matter of Delaware law. On May 28 …

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The following table provides disaggregated revenues by major source: For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Commission revenue (1) $ 373,060 $ 299,243 $ 793,614 $ 638,105 Profit-sharing revenue (2) 29,534 19,960 55,645 44,300 Consulting and service fee revenue (3) 44,883 27,375 88,356 47,531 Policy fee and installment fee revenue (4) 21,201 19,684 41,943 37,664 Assumed premium earned (5) 15,309 5,488 29,500 9,805 Other income (6) 4,802 4,499 8,592 9,375 Investment income (7) 4,150 2,562 7,524 5,436 Total revenues $ 492,939 $ 378,811 $ 1,025,174 $ 792,216 __________ (1) Commission revenue is earned by providing insurance placement services to clients under direct bill and agency bill arrangements with insurance company partners and reinsurance company partners for private risk management, commercial risk management, wealth management, employee benefits and Medicare insurance types. (2 ) Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain insurance company partners. (3) Service fee revenue is earned for providing insurance placement services to clients for a negotiated fee and consulting revenue is earned by providing specialty insurance consulting and other advisory services. (4) Policy fee revenue represents revenue earned for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance company par …

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Share-Based Compensation The Company has an Omnibus Incentive Plan (the Omnibus Plan) and a Partnership Inducement Award Plan (the Inducement Plan and, collectively with the Omnibus Plan, the Plans) to motivate and reward colleagues and certain other individuals to perform at the highest level and contribute significantly to the Companys success, thereby furthering the best interests of Baldwins stockholders. The total number of shares of Class A common stock authorized for issuance under the Omnibus Plan and the Inducement Plan was 15,513,345 and 3,000,000, respectively, at June 30, 2026. During the six months ended June 30, 2026, the Company made awards of restricted stock awards (RSAs), performance-based restricted stock unit awards (PSUs), and fully vested shares under the Plans to its non-employee directors, officers, colleagues and consultants. Fully-vested shares issued to directors, officers and colleagues during the six months ended June 30, 2026 were vested upon issuance and PSUs issued to officers vest in the quarter following the end of a performance period of three years, while RSAs issued to colleagues, consultants and officers generally either cliff vest after three to four years or vest ratably over three to five years. The following table summarizes the activity for awards granted by the Company under the Plans: Shares Weighted-Average Grant-Date Fair Value Per Share Non-vested awards outstanding at December 31, 2025 3,094,268 $ 36.03 Granted 4,165,527 23.30 …

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Fair Value Measurements ASC Topic 820, Fair Value Measurement (Topic 820) established a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy under Topic 820 are described below: Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2: Inputs to the valuation methodology are quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The fair value measurement level for assets and liabilities within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and Liabilities Measured at Fair Value on a Recurring Basis T …

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Income Taxes Baldwin is the sole managing member of Baldwin Holdings, which is treated as a partnership for U.S. federal, state and local income tax purposes. As a partnership, Baldwin Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Baldwin Holdings is passed through to and included in the taxable income or loss of its partners, including Baldwin. Baldwin is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to Baldwins allocable share of income of Baldwin Holdings. Effective Tax Rate The Companys effective tax rate was 71.4% and 3.4% for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate for the six months ended June 30, 2026 exceeded the U.S. federal statutory rate primarily due to the first quarter 2026 partial valuation allowance release. During the first quarter of 2026, the deferred tax accounting for both the CAC Group and Obie partnerships drove the partial release in valuation allowance, which is also driving the 68.0% increase in the effective tax rate between the two periods. The effective tax rate for the six months ended June 30, 2025 was lower than the U.S. federal statutory rate primarily due to the change in valuation allowance as a result of operating activity and the impact of partnership income allocations. The Companys effective tax rate was (0.2)% and (15.4)% for the three months ended June 30, 2026 and 2025 …

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Long-Term Debt As of December 31, 2025, the Amendment No. 3 to the Amended and Restated Credit Agreement (the JPM Credit Agreement) provided for senior secured credit facilities in an aggregate principal amount of approximately $1.6 billion, which consisted of (i) a term loan facility in the principal amount of $1.0 billion, bearing interest at a rate of term SOFR , plus an applicable margin of 250 bps, maturing May 24, 2031 (the 2025 Term Loans) and (ii) a revolving credit facility with commitments in an aggregate principal amount of $600 million, bearing interest at term SOFR plus a 10 bps credit spread adjustment and an applicable margin ranging from 175 bps to 250 bps based on the Companys total first lien net leverage ratio maturing May 24, 2029 (the Revolving Facility and, together with the 2025 Term Loans, the JPM Credit Facility). As of June 30, 2026 and December 31, 2025, Baldwin Holdings also had 7.125% Senior Secured Notes with an aggregate principal amount of $600 million due May 15, 2031. On January 2, 2026, the Company entered into Amendment No. 4 to the JPM Credit Agreement, which provided for $600 million of incremental term loans (the Incremental Term Loans and, collectively with the 2025 Term Loans, the Term Loans). The refinancing increased the aggregate principal amount of outstanding term loans under the JPM Credit Agreement to approximately $1.6 billion. The Company incurred approximately $12.0 million of debt issuance costs in connection with the refina …

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In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses (ASU 2024-03) to improve the disclosures about a public business entitys expenses and supply more detailed information about the types of expenses in commonly presented expense captions. These expense captions include purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions such as cost of sales, selling, general and administrative expense, and research and development. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company expects the adoption of this standard to expand its expense disclosures, but otherwise have no impact on the consolidated financial statements. In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (ASU 2025-03). This ASU amends the guidance for identifying the accounting acquirer in a business combination effected primarily by exchanging equity interests when the legal acquiree is a variable interest entity (VIE) that meets the definition of a business. Under the new guidance, …

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Related Party Transactions Related Party Balances Baldwin Holdings holds an ownership interest in Emerald Bay Risk Solutions, LLC (Emerald Bay), an entity formed for the benefit of the MGA business, to which Baldwin Holdings, Lowry Baldwin (the Companys Chairman), and members of the Company's executive management team have made capital commitments. The carrying value of the Companys investment in Emerald Bay was $2.3 million at June 30, 2026 and December 31, 2025. Investments are included in other assets on the condensed consolidated balance sheets. Commission Revenue The Company serves as a broker for Holding Company of the Villages, Inc. (The Villages), a significant shareholder, and certain affiliated entities. Commission revenue recorded from transactions with The Villages and affiliated entities was $1.0 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively, and $1.8 million and $2.0 million for the six months ended June 30, 2026 and 2025, respectively. Family Relationships Two brothers of Lowry Baldwin, the Companys Chairman, collectively received producer commissions from the Company comprising $0.1 million and $0.2 million for the three and six months ended June 30, 2025, respectively. The Estate of John Baldwin, brother of Lowry Baldwin, the Companys Chairman, received $1.1 million in proceeds from the Company for the sale of John Baldwins book of business during the six months ended June 30, 2026. Rent Expense The Company has vario …

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Revenue The following table provides disaggregated revenues by major source: For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Commission revenue (1) $ 373,060 $ 299,243 $ 793,614 $ 638,105 Profit-sharing revenue (2) 29,534 19,960 55,645 44,300 Consulting and service fee revenue (3) 44,883 27,375 88,356 47,531 Policy fee and installment fee revenue (4) 21,201 19,684 41,943 37,664 Assumed premium earned (5) 15,309 5,488 29,500 9,805 Other income (6) 4,802 4,499 8,592 9,375 Investment income (7) 4,150 2,562 7,524 5,436 Total revenues $ 492,939 $ 378,811 $ 1,025,174 $ 792,216 __________ (1) Commission revenue is earned by providing insurance placement services to clients under direct bill and agency bill arrangements with insurance company partners and reinsurance company partners for private risk management, commercial risk management, wealth management, employee benefits and Medicare insurance types. (2 ) Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain insurance company partners. (3) Service fee revenue is earned for providing insurance placement services to clients for a negotiated fee and consulting revenue is earned by providing specialty insurance consulting and other advisory services. (4) Policy fee revenue represents revenue earned for acting in the capacity of an MGA and fulfilling certain administrative functions on behalf of insurance com …

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Segment Information Baldwins business is divided into three operating groups: Insurance Advisory Solutions, Underwriting, Capacity & Technology Solutions and Mainstreet Insurance Solutions. The Insurance Advisory Solutions (IAS) operating group provides expertly-designed commercial risk management, employee benefits and private risk management solutions for businesses and high-net-worth individuals, as well as their families, through its national footprint which has assimilated some of the highest quality independent insurance brokers in the country with vast and varied strategic capabilities and expertise. The Underwriting, Capacity & Technology Solutions (UCTS) operating group consists of three distinct divisionsits MGA platform, MSI; its Capacity Solutions group (which consists of its reinsurance brokerage business, Juniper Re; its reinsurance MGA business, MultiStrat; and its captive management business); and the Captive. Through MSI, the Company manufactures proprietary, technology-enabled insurance products that are then distributed (in many instances via technology and/or API integrations) internally via risk advisors across its other operating groups and externally via select distribution partners, with a focus on sheltered channels where its products deliver speed, ease of use and certainty of execution, an example of which is the national embedded renters insurance product sold at point of lease via integrations with property management software providers. T …

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Significant Accounting Policies Repurchases of Class A Common Stock The Company accounts for repurchases of its Class A common stock using the constructive retirement method. Shares repurchased are retired immediately upon repurchase and are returned to the status of authorized but unissued shares. Any excess of the repurchase cost over par value is recorded as a reduction to accumulated deficit. No treasury stock is carried on the condensed consolidated balance sheets. In connection with each repurchase of a share of Class A common stock, a corresponding LLC Unit of Baldwin Holdings held by the Company and a corresponding share of Class B common stock are cancelled, which results in a reduction to noncontrolling interest. Tax Receivable Agreement Baldwin is a party to the Tax Receivable Agreement with Baldwin Holdings LLC Members that provides for the payment by Baldwin to Baldwin Holdings LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that Baldwin actually realizes as a result of (i) any increase in tax basis in Baldwin Holdings assets resulting from (a) previous acquisitions by Baldwin of LLC Units from Baldwin Holdings LLC Members, (b) the acquisition of LLC Units from Baldwin Holdings LLC Members using the net proceeds from any future offering, (c) redemptions or exchanges by Baldwin Holdings LLC Members of LLC Units and the corresponding number of shares of Class B common stock for shares of Class A …

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"Subsequent Events Business Divestitures During the second quarter of 2026, management formally committed to a plan to sell CACH Media Guarantors Insurance Solutions, LLC (""Media Guarantors""), an indirect subsidiary of Baldwin and provider of completion guaranty products for film and television production, whose operations are reported within the Insurance Advisory Solutions operating group. The Company was in active negotiations to sell Media Guarantors as of June 30, 2026, and the Company concluded that the disposal group met the criteria for held-for-sale classification under ASC Topic 360, Property, Plant, and Equipment . Accordingly, the assets and liabilities of Media Guarantors have been classified as held for sale at their carrying value, which was determined to be lower than the fair value of the net assets less costs to sell. As a result, no impairment loss was recorded in conjunction with the reclassification of the disposal group. As of June 30, 2026, the Company recognized assets held for sale of $5.0 million, which included $3.3 million of fiduciary cash and $1.3 million of goodwill, and liabilities held for sale of $3.6 million, which included $3.3 million of fiduciary liabilities. However, management has concluded that the relative size of the assets and liabilities held for sale, and of the potential proceeds from the disposal, are immaterial to the Companys financial position, results of operations and cash flows as a whole and, accordingly, the associated …

SubsequentEventsTextBlock · excerpt; the full note is in the filing