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BROWN & BROWN, INC. (BRO)·Q3 2026 Earnings Summary

Executive Summary

  • Q3 results delivered solid top-line and margin performance: revenues $1.606B (+35.4% YoY), adjusted EBITDAC $587M with margin 36.6% (+170 bps), and adjusted diluted EPS $1.05, driven by acquisitions, higher contingents and investment income .
  • Versus Wall Street, BRO beat on EPS and revenue: Q3 EPS $1.05 vs $0.93 consensus; revenue $1.55B (commissions & fees) vs $1.54B consensus; management cited $46M higher contingents and incremental interest income as supports* .
  • Segment backdrop: Retail organic +2.7% (impacted ~1% by employee benefits incentive true-ups) while Specialty Distribution organic +4.6%; consolidated organic +3.5% with strong contingents offsetting CAT property rate pressure .
  • Outlook levers: Q4 guide calls for lower specialty growth (mid‑single digit decline) on tough flood claims comps and CAT rate pressure; Retail organic growth “similar” to Q3 (as reported); AssuredPartners Q4 revenue $430–$450M with margin slightly below full-year; dividend raised 10% to $0.165 and buyback authorization lifted to ~$1.5B .

Note: As of November 20, 2025, the company has not filed Q3 2026 materials. This recap uses the most recently available quarter (Q3 2025) and management’s forward commentary. If you want a Q3 2026 placeholder, I can update immediately upon filing.

What Went Well and What Went Wrong

  • What Went Well

    • Record quarterly scale from M&A and contingents: revenues $1.606B (+35.4% YoY), with $46M YoY lift in contingent commissions (incl. $12M from Accession) and adjusted EBITDAC margin expansion to 36.6% (+170 bps) .
    • Integration and strategic scope: >5,000 new teammates joined; management emphasized enhanced global capabilities and strong cash flow conversion; “We are pleased with our overall growth, profitability and cash flow conversion.” — J. Powell Brown .
    • Capital returns and balance sheet flexibility: 10% dividend hike to $0.165 (32nd consecutive increase) and ~$1.5B repurchase authorization; operating cash flow YTD $1.006B (+24% YoY) .

  • What Went Wrong

    • GAAP earnings pressure: GAAP diluted EPS fell to $0.68 (−16.0% YoY) as integration costs, higher amortization and a non‑cash escrow mark‑to‑market weighed; adjusted EPS grew to $1.05 (+15.4% YoY) .
    • Retail organic growth moderated: +2.7% with ~1% headwind from employee benefits incentive adjustments and slower rate increases; management expects Q4 Retail organic to be similar to Q3 (as reported) .
    • Specialty headwinds ahead: Q4 specialty organic revenue expected to decline mid‑single digits on tough flood claims processing comp (~$28M in Q4’24), CAT property rate pressure, and slower lender‑placed growth; margin to be impacted accordingly .

Financial Results

Revenue, EPS and Margins (YoY and sequential context; consensus where available)

MetricQ1 2025Q2 2025Q3 2025Q3 2025 vs Est.
Total Revenues ($B)$1.404 $1.285 $1.606 —
Commissions & Fees ($B)$1.385 $1.249 $1.550 $1.539*
Diluted EPS (GAAP)$1.15 $0.78 $0.68 —
Diluted EPS – Adjusted ($)$1.29 $1.03 $1.05 $0.93*
EBITDAC – Adjusted ($M)$535 $471 $587 —
EBITDAC Margin – Adjusted (%)38.1% 36.7% 36.6% —
Organic Revenue Growth (%)6.5% 3.6% 3.5% —

*Values retrieved from S&P Global.

Segment Performance (Q3 2025 vs prior year)

SegmentRevenues ($M)YoY GrowthOrganic Growth (%)EBITDAC Margin – Adjusted
Retail$883 +37.8% 2.7% 28.0%
Specialty Distribution$681 +30.0% 4.6% 43.9%

Key KPIs and Cash

KPIQ3 2025Prior YearNotes
Profit-sharing Contingent Commissions ($M)$73 $27 +$46M YoY; driven by underwriting and volume; +$12M from Accession
Investment & Other Income ($M)$56 $31 +$25M YoY, aided by interest on June financings pending Accession close
Operating Cash Flow YTD ($M)$1,006 $813 +24% YoY; ~23.5% cash flow to revenue ratio YTD
Weighted Avg Diluted Shares (M)332 284 Higher on share issuance to Accession equity holders

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Retail Organic Growth (as reported)Q4 2025Not provided“Similar to Q3” (~2.7%) Maintained directional
Specialty Organic GrowthQ4 2025Not providedMid‑single digit decline Lower
Contingent CommissionsQ4 2025Not provided$30–$40M (ex‑Accession) Set
AssuredPartners (Accession) RevenuesQ4 2025Not provided$430–$450M Set
AssuredPartners Adjusted EBITDA MarginQ4 2025Full‑year margin discussed at announcementSlightly below full‑year due to seasonality Lower (seasonal)
Amortization ExpenseQ4 2025Not provided$110–$115M Set
Interest ExpenseQ4 2025Not provided$95–$100M Set
Investment & Other IncomeQ4 2025Not provided$20–$25M Set
DividendOngoing$0.15/qtr$0.165/qtr (+10%) Raised
Share Repurchase AuthorizationOngoing~$0.25B remainingIncreased to ~$1.5B total capacity Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
M&A and IntegrationContinued acquisition momentum; announced Accession transaction (Q2 PR) >5,000 new teammates onboarded; integration “progressing well”; pipeline healthy Positive integration; ongoing pipeline
Macro/Rate EnvironmentStable growth; rate backdrop mixed (Q2 PR) Admitted casualty/auto up; admitted property competitive; E&S property −15% to −30% YoY with potential year‑end aggressiveness Mixed; easing in E&S property
Retail Organic Growth6.5% in Q1; 3.6% in Q2 (consolidated) +2.7% retail; ~1% headwind from employee benefits incentives; Q4 similar (as reported) Moderating near‑term
Specialty DistributionStrong growth with contingents (Q1/Q2 PR) Organic +4.6%; Q4 guide mid‑single digit decline on tough comp and CAT rate pressure Near‑term deceleration
Government Programs (NFIP/flood)Routine updatesGovernment shutdown pauses new WYO policies; renewals managed; Wright Flood/private flood positioned; Poulton acquisition closed 11/1 Manageable operational headwind
Technology & AIOngoing investments (prior commentary)Focus on data analytics, underwriting, admin automation; early benefits; innovation council in place Steady execution
Leverage/CapitalConservative targetsGross leverage target 0–3x; expect back within range in 12–18 months; disciplined buyback vs M&A framework De‑leveraging path intact

Management Commentary

  • Strategic scope and integration: “We are very excited to welcome over 5,000 new teammates… We are pleased with our overall growth, profitability and cash flow conversion.” — J. Powell Brown .
  • Margin drivers and contingents: “Contingent commissions grew by an impressive $46 million… Our EBITDA margin was 36.6%, expanding by 170 basis points…” — R. Andrew Watts .
  • Retail organic mechanics: ~1% headwind from employee benefits incentive adjustments in Q3; Q4 accrual dynamics create similar headwinds; Q4 retail organic expected “as reported” similar to Q3 .
  • Rate outlook: Admitted casualty and auto up; admitted property competitive; E&S property rate pressure persists with possibility of year‑end capacity‑driven discounts .

Q&A Highlights

  • Organic vs margins: Management cautioned against a tight correlation, noting contingents and other factors are material; reiterates 30%–35% margin framework over time .
  • Government shutdown exposure: Some Medicare/SSA set‑aside businesses and new WYO flood policies affected; renewals handled; revenue typically catches up post‑resolution .
  • Admitted vs E&S migration: Some movement back to admitted possible but unlikely to offset E&S market growth; admitted interest for “good property” rising .
  • Flood/private flood: Wright Flood renewals front‑run; private flood opportunities growing (Poulton), but not a universal substitute for NFIP .
  • Capital allocation: Board authorized ~$1.5B buyback; management maintains flexible approach balancing M&A and repurchases .

Estimates Context

  • Q3 2025 vs Consensus:
    • Revenue: $1.55B commissions & fees vs $1.54B consensus — slight beat* .
    • EPS: $1.05 adjusted vs $0.93 consensus — beat, aided by contingents and investment income* .
  • Forward estimate considerations:
    • Q4 specialty organic decline and lower contingents ($30–$40M) may weigh on revenue/margins vs prior run‑rates .
    • AssuredPartners revenue contribution ($430–$450M) partially offsets seasonal margin drag; higher amortization and interest expense guided for Q4 .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q3 delivered an EPS and revenue beat with 170 bps adjusted margin expansion, supported by contingents and accretive M&A integration .
  • Near‑term (Q4) specialty growth to soften on tough flood claims comp and CAT rate pressure; Retail organic to remain similar to Q3 (as reported), tempering consolidated organic growth .
  • Strong cash generation ($1.0B YTD) underpins a 10% dividend hike and expanded $1.5B buyback authorization, even as deleveraging progresses on a 12–18 month path .
  • Rate landscape mixed: admitted casualty/auto firming; E&S property easing; watch year‑end carrier capacity behavior and 2026 property rate setting .
  • Integration of Accession on track; Q4 revenue $430–$450M with seasonally lower margin; synergy realization paced over three years through 2028 .
  • For estimate models, consider lower Q4 contingents and seasonal margin headwinds, higher amortization and interest expense, offset by Accession revenue and ongoing cost discipline .
  • Medium term, diversified revenue mix, cash conversion and disciplined capital deployment support continued EPS growth even amid rate normalization .

Sources

  • Q3 2025 press release and reconciliations .
  • Q3 2025 8‑K and exhibit .
  • Q3 2025 10‑Q, segment tables and MD&A .
  • Q3 2025 earnings call transcript .
  • Q2 2025 and Q1 2025 press releases for trend context .
  • Dividend and buyback authorization press release .

Estimates and consensus figures are from S&P Global (Capital IQ).