Kingsway Financial Services Q2 Earnings Call Highlights

Kingsway reported its strongest operating performance under CEO JT Fitzgerald: Second-quarter revenue increased 27.6% year over year to $39.4 million, net income reached $200,000 versus a $3.2 million loss, and adjusted EBITDA rose to $5.2 million from $1.7 million. KSX drove growth while extended warranties improved on a pro forma basis: KSX revenue jumped 68.3% to $22.3 million and adjusted EBITDA rose 77.9% to a record $4.3 million. Extended-warranty adjusted EBITDA also increased, excluding the sold Trinity business. The company is reshaping its portfolio and maintaining its acquisition strategy: Kingsway sold Trinity for $8 million and acquired Michigan-based managed IT provider RCC for $2.4 million. Net debt declined to $59.9 million, while management reaffirmed its 2026 targets of three to five acquisitions and double-digit organic growth in KSX and extended warranties.

Kingsway Financial Services NYSE: KWY, now operating as Kingsway Corporation, reported second-quarter results that management described as its strongest operating performance since Chief Executive Officer JT Fitzgerald took the role. Consolidated revenue rose 27.6% year over year to $39.4 million, while the company recorded net income of $200,000, compared with a $3.2 million net loss in the prior-year quarter. Consolidated adjusted EBITDA increased to $5.2 million from $1.7 million a year earlier. Fitzgerald said the company’s portfolio EBITDA, a management metric combining KSX adjusted EBITDA with modified cash adjusted EBITDA from the extended-warranty segment, reached a quarterly record of $7.2 million.

Kingsway’s Search Xcelerator, or KSX, segment generated revenue of $22.3 million, up 68.3% from $13.3 million in the second quarter of 2025. KSX adjusted EBITDA rose 77.9% to a quarterly record of $4.3 million from $2.4 million a year earlier. Fitzgerald said performance was broad-based across the KSX portfolio, highlighting Ravix and SPI for customer wins and client retention. He said KSX adjusted EBITDA has more than tripled during the past eight quarters.

The extended-warranty segment reported revenue of $17.1 million, down 3.1% from the prior-year period. On a pro forma basis excluding Trinity Warranty Solutions, which Kingsway sold in May, extended-warranty revenue rose 6.5% to $16.1 million and cash sales increased 6.9%. Extended-warranty adjusted EBITDA was $1.1 million, compared with $600,000 a year earlier. On a pro forma basis for Trinity’s sale, segment adjusted EBITDA was $1 million, up from $300,000 in the prior-year period. Fitzgerald said both IWS and Penn/PWI had strong quarters. He said Penn/PWI, led by operator CEO Robbie Humble, has prioritized profitable growth in 2026 and delivered results ahead of internal expectations.

Management said several portfolio companies continued to face business-specific issues despite the overall results. Roundhouse and Kingsway Skilled Trades typically benefit from second-quarter seasonality, but both reported flat adjusted EBITDA sequentially from the first quarter. At Roundhouse, Fitzgerald attributed the second-quarter performance primarily to timing issues, including an electric motor shipment that moved from the end of June to July 1 and deferred several hundred thousand dollars of revenue into the third quarter. He said the company continues to add customers and make operational progress. Within Kingsway Skilled Trades, Bud’s Plumbing had what Fitzgerald called a great quarter, while AAA improved. Southside, however, recorded a low six-figure write-down tied to a legacy construction...