Kingsway Financial Services Reports 16.7% Revenue Growth but Increased Net Loss in Q2 2025

Kingsway Financial Services Inc. reported its financial results for the second quarter of 2025, revealing a total revenue of $30.9 million, a 16.7% increase from $26.4 million in the same period last year. For the first half of 2025, revenues reached $59.3 million, up from $52.6 million in the prior year. The company experienced a net loss of $3.2 million for the quarter, compared to a loss of $2.2 million in Q2 2024, and a total net loss of $6.3 million for the first half of 2025, compared to $4.5 million in the same period last year. The increase in losses was attributed to higher operating expenses, which rose to $32.0 million from $26.3 million year-over-year.

Kingsway's operational performance was impacted by several factors, including a significant increase in claims and general administrative expenses. The Extended Warranty segment reported a slight decline in operating income, primarily due to increased claims and administrative costs, while the Kingsway Search Xcelerator segment saw improved performance, with operating income rising to $2.0 million from $1.4 million year-over-year. The company also noted that cash sales in the Extended Warranty segment increased by 9.2% in the second quarter, indicating a positive trend in customer engagement.

Strategically, Kingsway completed the acquisition of M.L.C. Plumbing, LLC (d/b/a Bud's Plumbing) in March 2025 for approximately $5 million, which is expected to enhance its portfolio of businesses with recurring revenue. The acquisition contributed $2.0 million in revenue and $0.2 million in net income from the date of acquisition through June 30, 2025. Additionally, the company announced subsequent acquisitions, including Roundhouse Electric & Equipment Co., Inc. for $22.4 million and AAA Flexible Pipe Cleaning Corp. for $2.8 million, further expanding its operational footprint.

As of June 30, 2025, Kingsway reported total assets of $207.7 million, an increase from $186.6 million at the end of 2024. The company’s cash and cash equivalents rose to $12.1 million, up from $5.5 million, reflecting improved liquidity. The total liabilities increased to $172.1 million, primarily due to the issuance of preferred stock and bank loans. The company’s employee headcount remained stable, with no significant changes reported.

Looking ahead, Kingsway anticipates continued growth driven by its strategic acquisitions and an increase in service fee revenues. The company is focused on enhancing operational efficiencies and managing costs to improve profitability. However, it remains cautious about macroeconomic conditions, including inflation and interest rate fluctuations, which could impact its financial performance.