BRO Financial Analysis

Analysis Date: 1/28/2025

Business Model

Brown & Brown generates revenue primarily through insurance brokerage commissions and fees, with additional revenue from investment income

Revenue Sources

• Commissions and fees (97.4% of Q3 2024 revenue)
• Investment income (2.6% of Q3 2024 revenue)

Revenue Distribution by Channel

• Retail Segment: $641M (54.0% of total revenue)
• Programs Segment: $353M (29.8% of total revenue)
• Wholesale Brokerage: $171M (14.4% of total revenue)

Income Statement Analysis

• Revenue growth of 11.0% driven by organic growth of 9.5% and acquisitions
• Income before income taxes margin improved to 26.7% from 22.7%
• EBITDAC margin improved to 35.0% from 34.7%

Balance Sheet Analysis

• Strong balance sheet with continued growth in assets and equity
• Goodwill and intangible assets remain significant components of total assets

Capital Allocation

Management maintains disciplined capital allocation approach focused on M&A opportunities while returning capital to shareholders through dividends (increased 13% to $0.13 per share)

Management Commentary

Our teammates delivered another outstanding quarter, and we have great momentum

Balance sheet and cash generation in great position for high-quality acquisitions

Expecting a good finish to the year

Overall Sentiment: Positive and confident about business momentum and execution capabilities

Recommendation

Rating: Buy

Reason for Rating: Strong execution, margin expansion, and robust organic growth support positive outlook

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/28/2025, 4:09:57 AM