Kingsway Financial Services Reports Strong Q3 Earnings

Kingsway Financial Services ((KFS)) has held its Q3 earnings call. Read on for the main highlights of the call.

In the recent earnings call, Kingsway Financial Services showcased a strong performance with significant revenue growth and successful acquisitions, particularly in the KSX segment. The company reported robust results in its Extended Warranty segment, marked by increased cash sales. Despite facing some challenges, such as onetime expenses and pressures in the nursing and diagnostics sectors, the overall sentiment was positive, driven by growth and acquisition success.

Significant Revenue Growth

Kingsway Financial Services reported an impressive 37% increase in revenues year-over-year. The KSX segment was a standout performer, achieving a remarkable 104% growth in revenue and a 90% rise in adjusted EBITDA. This growth underscores the segment’s importance as it became the primary revenue source for the first time.

Successful Acquisitions

The company completed four acquisitions during the quarter, including Southside Plumbing, which marked the third addition under the Kingsway Skilled Trades platform in 2025. These strategic acquisitions are expected to bolster the company’s growth trajectory and enhance its market position.

Extended Warranty Segment Performance

The Extended Warranty segment showed resilience with a 2% increase in top-line revenue and a significant acceleration in cash sales, which grew by 14.2% year-over-year in Q3. This segment continues to contribute positively to the company’s cash flow.

Strong Cash Position and Managing Debt

Kingsway’s cash position improved to $9.3 million, up from $5.5 million at the end of 2024. Despite an increase in net debt due to recent acquisitions, the company maintains a strong cash position, which is crucial for future investments and debt management.

Positive Business Momentum

The company reported positive momentum across its business units. Roundhouse and Kingsway Skilled Trades have performed well since their acquisition, and Image Solutions experienced sequential EBITDA growth, indicating strong operational performance.

Onetime Expenses Impacting KSX Segment

The KSX segment faced onetime expenses, including a $325,000 noncash item related to a hospital system client’s bankruptcy. These expenses impacted the segment’s EBITDA figures but are not expected to have a long-term effect.

Pressure on Secure Nursing and Digital Diagnostics

The nursing and digital diagnostics sectors are under pressure due to reimbursement issues affecting hospitals. This could potentially impact the nurse staffing and digital diagnostics businesses, posing a challenge for Kingsway.

Extended Warranty Adjusted EBITDA Decline

Despite the increase in cash sales, the Extended Warranty segment saw a decline in adjusted EBITDA, which was $800,000 compared to $2.1 million a year ago. This indicates a need for strategic adjustments to improve profitability.

Forward-Looking Guidance

CEO JT Fitzgerald provided forward-looking guidance, highlighting the company’s strategic focus on disciplined execution and scaling the KSX portfolio to sustain long-term growth. The company aims to maintain its robust performance, with a trailing 12-month adjusted run rate EBITDA between $20.5 million and $22.5 million. The acquisitions, including Southside Plumbing, are expected to contribute positively to future growth.

In summary, Kingsway Financial Services demonstrated a strong performance in its recent earnings call, with significant revenue growth and successful acquisitions. While challenges remain, particularly in the nursing and diagnostics sectors, the company’s strategic focus on growth and disciplined execution positions it well for future success.