Kingsway Financial Services Inc.
11/06/2025 | Press release | Distributed by Public on 11/06/2025 15:19
KINGSWAY REPORTS THIRD QUARTER 2025 FINANCIAL RESULTS (Form 8-K)
KINGSWAY REPORTS THIRD QUARTER 2025 FINANCIAL RESULTS
-- Revenue Growth of 37% to $37.2 Million --
-- KSX Revenue Growth of 104% to $19.0 Million --
-- Extended Warranty Revenue Growth of 2% to $18.2 Million; Extended Warranty Cash Sales up 14% --
-- KSX Represents a Majority of Revenue for First Time --
Management to Host Conference Call Today, November 6, 2025, at 5 p.m. ET
Chicago - November 6, 2025 - (NYSE: KFS) Kingsway Financial Services Inc. ("Kingsway" or the "Company"), the only publicly-traded US company employing the Search Fund model to acquire and build great businesses, today announced its operating results for the three and nine months ended September 30, 2025.
Third Quarter 2025 Consolidated Financial Highlights
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Consolidated revenue increased 37.0% to $37.2 million for the three months ended September 30, 2025, compared to $27.1 million in the prior year quarter. |
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Kingsway Search Xcelerator ("KSX") revenue increased 104.2% to $19.0 million in the third quarter of 2025, compared to $9.3 million in the third quarter of 2024. |
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Extended Warranty revenue increased 2.0% to $18.2 million in the third quarter of 2025, compared to $17.8 million in the third quarter of 2024. |
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Consolidated net loss was $2.4 million for the three months ended September 30, 2025, compared to a net loss of $2.3 million in the prior year quarter. |
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Twelve month run-rate adjusted EBITDA for the operating companies of $20.5 million to $22.5 million; this metric reflects the aggregate trailing 12-month trailing adjusted EBITDA of businesses the Company currently owns or has recently acquired and is not intended to be forward-looking guidance. |
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KSX operating companies delivered twelve-month run-rate adjusted EBITDA of $15.5-16.5 million versus $9.0-10.0 million in the year-ago quarter. |
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Extended Warranty operating companies delivered twelve-month run-rate adjusted EBITDA of $5.0-6.0 million vs. $8.5-9.5 million in the year-ago quarter. |
| ■ | The year-over-year reduction in reported Extended Warranty twelve-month run-rate adjusted EBITDA primarily reflects the timing of revenue and expense recognition under GAAP as growth in Extended Warranty reaccelerates. |
| ■ | Deferred service revenue associated with new warranty contracts increased by $2.8 million year-over-year; Extended Warranty also absorbed up-front commission payments associated with issuing new warranty contracts. |
| ■ | Extended Warranty cash sales in the quarter were up 14.2% year-over-year. |
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Adjusted consolidated EBITDA decreased $0.9 million to $2.1 million for the three months ended September 30, 2025, compared to $3.0 million in the prior year quarter. |
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KSX adjusted EBITDA was $2.7 million in the third quarter of 2025 compared to $1.4 million in the year-ago quarter. |
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Extended Warranty adjusted EBITDA was $0.8 million in the third quarter of 2025 compared to $2.1 million in the year-ago quarter. |
| ● | The Company had total net debt of $61.4 million as of September 30, 2025, compared with $52.0 million as of December 31, 2024. |
Recent Business Highlights
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On July 1, 2025, the Company acquired Roundhouse Electric & Equipment Co., Inc. ("Roundhouse"), a leading provider of industrial-scale electric motor maintenance, repair, testing, and sales solutions based in Odessa, Texas, for $22.4 million. The business adds $16.0 million in annual unaudited revenue and $4.2 million in annual unaudited adjusted EBITDA to Kingsway. |
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On August 1, 2025, the Company acquired AAA Flexible Pipe Cleaning Corp ("Advanced Plumbing and Drain"), a leading provider of commercial and residential plumbing services based in Cleveland, Ohio, for $3.5 million, plus a potential earn-out of up to $1.5 million, for a total maximum purchase price of $5.0 million. The business is expected to add $7.0 million in unaudited pro-forma annual revenue and $0.7 million in unaudited pro-forma annual adjusted EBITDA to Kingsway. |
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On August 1, 2025, the Company's wholly-owned subsidiary Ravix Group, Inc. completed the strategic acquisition of The HR Team, Inc., a specialized firm of human resources professionals based in the state of Maryland. The business is expected to add unaudited pro-forma annual adjusted EBITDA of $0.2 million to Kingsway. |
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On August 14, 2025, the Company acquired 80% of the equity in Southside Plumbing, a leading provider of commercial and residential plumbing services located in Omaha, Nebraska, for $5.625 million, plus a potential earn-out of up to $1.125 million, for a total maximum purchase price of $6.75 million. The business is expected to add $4.0 million in unaudited pro-forma annual revenue and $0.9 million in unaudited pro-forma annual adjusted EBITDA to Kingsway. |
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In connection with the acquisition of Southside Plumbing, Kingsway Skilled Trades entered into a financing arrangement with Newburyport Five Cents Savings Bank ("Newburyport Bank"). The financing arrangement includes senior debt in the form of a commercial term loan of $3.75 million at a fixed rate of 7.5% with a 7-year amortization schedule, plus access to both a commercial revolving line of credit and an equipment line of credit. |
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On October 20, 2025, the Company welcomed Colter Hanson as the newest Operator-in-Residence ("OIR") to lead a search for a Testing, Inspection and Certification ("TIC") acquisition in the Midwest. |
Management Commentary
"I am pleased to report an excellent quarter for Kingsway, with revenue up 37% year-over-year," said JT Fitzgerald, Kingsway's President and CEO. "The Company also reached an important milestone as our high-growth KSX segment represented a majority of revenue for the first time. Our stable, cash-generative Extended Warranty segment once again produced solid top-line growth with robust cash flow and strong cash sales. Our KSX segment achieved stellar results with revenue growth of 104% and adjusted EBITDA growth of 90%.
"I am particularly encouraged by the attractive organic growth opportunities visible in our KSX segment. Roundhouse and Kingsway Skilled Trades are performing well and are ahead of budget since acquisition. Image Solutions and DDI appear to be coming out of their 'J-Curves' with meaningful sequential financial improvement in the third quarter. The underlying results of our KSX businesses provide optimism that organic growth will be a key driver of Kingsway's success going forward.
"Overall, Kingsway's business momentum is strong. Our acquisition pipeline is robust, our Operator CEO's are executing with focus and discipline, and we have built a high-quality portfolio of recurring-revenue services businesses with the potential to be far larger than they are today. Our unique public Search Fund strategy positions us well to deliver sustainable growth and significant long-term value creation for our shareholders."
Conference Call and Webcast
Management will host a conference call at 5 p.m. Eastern Time today to discuss the results and host a live Q&A session. Additionally, investors may also submit questions via email to: [email protected].
Conference Call Information
Date: Thursday, November 6, 2025
Time: 5 p.m. Eastern Time
Toll Free: 888-999-3182; Code: Kingsway
International: +1-848-280-6330; Code: Kingsway
Live Webcast Link: https://www.webcaster5.com/Webcast/Page/2928/53169
Conference Call Replay Information
Toll Free: 877-481-4010
International: +1-919-882-2331
Replay Passcode: 53169
Replay Webcast Link: https://www.webcaster5.com/Webcast/Page/2928/53169
About the Company
Kingsway Financial Services Inc. ("Kingsway") (NYSE: KFS) is the only publicly-traded US company employing the Search Fund model to acquire and build great businesses.
Kingsway owns and operates a collection of high-quality B2B and B2C services companies that are asset-light, growing, profitable, and that have recurring revenues. Kingsway seeks to compound long-term shareholder value on a per share basis via its decentralized management model, its talented team of operators, and its tax-advantaged corporate structure.
Non U.S. GAAP Financial Measure
Management believes that non-GAAP adjusted EBITDA, when presented in conjunction with comparable GAAP measures, provides useful information about the Company's operating results and enhances the overall ability to assess the Company's financial performance. Management uses non-GAAP adjusted EBITDA, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting, and reviewing the performance of its business. Non-GAAP adjusted EBITDA allows investors to make a more meaningful comparison between the Company's core business operating results over different periods of time. Management believes that non-GAAP adjusted EBITDA, when viewed with the Company's results under GAAP and the accompanying reconciliations, provides useful information about the Company's business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by the factors listed in the attached schedules, Management believes that non-GAAP adjusted EBITDA can provide useful additional basis for comparing the current performance of the underlying operations being evaluated. Investors should consider this non-GAAP measure in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. Investors are encouraged to review the Company's financial results prepared in accordance with GAAP to understand the Company's performance taking into account all relevant factors.
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