Baldwin Insurance Group (NASDAQ:BWIN) management used its fourth-quarter 2025 earnings call to address investor concerns following a sharp sell-off in publicly traded insurance brokers tied to fears that AI-powered tools could disintermediate traditional brokerage models. Chief Executive Officer Trevor Baldwin argued the impact of AI will be “both” competitive and enabling, but said Baldwin’s business is positioned to benefit because of its mix of embedded distribution, complex advisory work, and vertically integrated proprietary products.
Management frames AI as an accelerant, not an existential threat
Baldwin opened by describing a recent industry-wide sell-off that erased nearly $40 billion of market capitalization across public broker peers in a matter of days after the launch of AI-powered insurance applications. The company’s view is that AI will widen the gap between “transactional middlemen” and platforms that own distribution and integrate across the insurance value chain.
The company also discussed its mortgage and real estate embedded platform, supported by its Coverage Navigator technology. In 2025, Baldwin onboarded 12 new partners, including New American Funding, which management said moved from a competitor and saw “dramatic increases in conversion rates.” Baldwin also announced it signed a 10-year exclusive agreement with Fairway Independent Mortgage Corporation and expects to go live on Coverage Navigator in the second quarter. In conjunction with that partnership, the company expects to acquire Fairway’s small agency (about $1 million of revenue) and integrate it into the platform.
In renters insurance, management said the platform wrote more than $280 million of premium in 2025, embedding into property management software and enabling purchase at the point of lease in under 60 seconds. Management emphasized that 100% of premium in that channel flows into Baldwin proprietary products built and managed by its MGA platform, MSI.
Digital initiatives in small commercial and focus on complex advisory
In small commercial, Baldwin described the economics for small accounts as “broken” and said the company has been migrating clients to a digitally guided Founder Shield platform. Management reported that for clients moved to the platform, retention increased from 82% to 92%, margins improved by about 40 percentage points, and growth accelerated to 25% annually, driven by cross-sell and upsell. The company ended 2025 with $17 million of retail brokerage revenue on the platform and is migrating the remaining roughly $30 million of small business revenue.
For its Insurance Advisory Solutions (IAS) segment, management said the business is built around scale and complexity where sector expertise matters. On roughly $1 billion of pro forma IAS revenue including CAC, management said about 70% is commercial insurance for mid-size to large clients, 20% is employee benefits brokerage and consulting, and 10% is personal insurance for high-net-worth families. Management added that about 80% of IAS revenue comes from clients generating at least $50,000 of revenue for Baldwin. Baldwin also pointed to cross-functional teams serving clients involved in data center development as an example of advisory work it believes AI will augment rather than replace.
The company’s UCTS segment, which builds and manages proprietary insurance products and facilitates third-party risk capital, was also positioned as a strategic “moat” that AI should enhance through improved risk pricing, claims adjudication, and capital management.
Fourth-quarter results: softer organic growth, margin expansion
Baldwin reported fourth-quarter organic revenue growth of 3%, which CEO Trevor Baldwin said was below historical performance. He attributed the quarter’s headwinds to items previously discussed, including a 22% decline in profit-sharing revenue that management said was largely timing-related. Core commissions and fees organic growth was 5%.
For the full year 2025, management reported core commission and fee organic revenue growth of 8% and total organic revenue growth of 7%, alongside adjusted EBITDA growth of 9%, 20 basis points of adjusted EBITDA margin expansion, and adjusted diluted EPS growth of 11%. Management provided “normalized” growth metrics excluding one-time impacts from the QBE builder book transition to a reciprocal and a procedural change affecting timing of IAS revenue recognition, and also cited Medicare marketplace disruption as a headwind.
Chief Financial Officer Brad Hale said fourth-quarter total revenue was $347.3 million and full-year total revenue was $1.5 billion. The company posted a GAAP net loss in the fourth quarter of $43.7 million (GAAP diluted loss per share of $0.37) and a full-year GAAP net loss of $54.2 million (GAAP diluted loss per share of $0.50). On an adjusted basis, Hale reported fourth-quarter adjusted net income of $36.3 million, or $0.31 per fully diluted share, and full-year adjusted net income of $198.9 million, or $1.67 per share.
Adjusted EBITDA in the fourth quarter rose 10% to $69.6 million, and adjusted EBITDA margin expanded about 100 basis points to 20.1%. For the full year, adjusted EBITDA was $341.5 million and adjusted EBITDA margin was 22.7%.
Segment performance and headwinds
- UCTS: Management said UCTS delivered 16% organic growth in the quarter with adjusted EBITDA margin expansion of about 330 basis points, driven by multifamily growth, better-than-expected commercial umbrella results, builder product performance, and contributions from Juniper Re.
- Main Street (MIS): Core commissions and fees organic revenue growth was 2%, while total organic growth was negative 4%, reflecting contingent commission timing. Management cited headwinds from the QBE transition at Westwood and Medicare retention challenges, but said adjusted EBITDA margin expanded 460 basis points to 31.8%.
- IAS: Fourth-quarter core commission and fee organic revenue growth was flat, while total organic revenue growth was -2%, reflecting contingent timing and rate and exposure headwinds, including the procedural accounting change. Management said sales velocity was 19% and client retention improved by nearly 300 basis points in the quarter.
CAC integration, capital allocation, and 2026 guidance
Management said it closed partnerships with CAC Group, OBE, and Capstone on January 1, representing about $350 million of 2025 pro forma revenue. For 2026, the company expects those partnerships to contribute roughly $400 million of revenue and about $110 million of adjusted EBITDA post synergies. Trevor Baldwin said headcount-related synergy actions were completed last week and integration is ahead of schedule. He cited CAC’s early 2026 new business performance, including $32 million of “closed one” new business versus $20 million in the prior-year period and $11 million of cross-sell opportunities being pursued with Baldwin teams.
Hale said adjusted free cash flow in the fourth quarter was $11 million, up 85% year over year, while full-year adjusted free cash flow was $87.2 million, down 5% due to roughly $15 million of one-time partnership-related costs in Q4 tied to the CAC merger. Net leverage was 4.1x, and the company increased its term loan facility by $600 million in December to fund the acquisitions while maintaining pricing of SOFR plus 250 basis points.
The board authorized an accelerated and expanded $250 million share repurchase plan. Management said the company is not assuming any share repurchases in its guidance, though Trevor Baldwin later said that at “8x EBITDA” there is “not a better use of capital than buying our own shares.”
For 2026, management guided to total revenue of $2.01 billion to $2.05 billion, organic growth of mid-single digits or higher, adjusted EBITDA of $460 million to $480 million, adjusted diluted EPS of $2.00 to $2.10, and “double-digit growth” in adjusted free cash flow before one-time transformation and integration costs. For the first quarter of 2026, the company expects revenue of $520 million to $530 million, low single-digit organic growth, adjusted EBITDA of $130 million to $140 million, and adjusted diluted EPS of $0.61 to $0.65.
Looking ahead, management said it expects organic growth to ramp through 2026 to reach double digits by the fourth quarter as it laps the QBE commission headwind and the IAS procedural accounting change, while broader market headwinds fade toward neutral by year-end.
About Baldwin Insurance Group (NASDAQ:BWIN)
Baldwin Insurance Group, Inc (NASDAQ: BWIN) is a specialty insurance and surety firm that underwrites contract bonds, commercial insurance policies and related risk-management services. Its core offerings include contract and commercial surety, which provide performance and payment guarantees to obligees in construction, service and public-sector projects. In addition, the company delivers complementary commercial lines coverages designed to mitigate liability, property and workers’ compensation exposures.
Through a network of regional agency offices primarily across the Midwestern United States, Baldwin Insurance Group serves contractors, developers, small and mid-sized businesses as well as municipal and public-sector clients.
