BROWN & BROWN, INC. (BRO)·Q4 2025 Earnings Summary

Executive Summary

• Q4 2025 results and materials have not been published yet; the latest primary sources are Q3 2025 8-K and call, and Q2 2025 8-K. Management gave specific Q4 guardrails: Retail organic growth similar to Q3’s reported ~2.7%, Specialty Distribution organic to decline mid-single digits, Q4 contingent commissions of $30–$40m, AssuredPartners (AP) revenue of $430–$450m, amortization $110–$115m, interest expense $95–$100m, and investment/other income $20–$25m .
• Q3 showed strong top-line and margin expansion on an adjusted basis: revenue $1.61B (+35.4% YoY), adjusted EBITDAC margin 36.6% (+170 bps), and adjusted diluted EPS $1.05 (+15.4% YoY). GAAP diluted EPS was $0.68 due to integration costs and escrow mark-to-market related to AP .
• Organic growth moderated: consolidated organic +3.5% in Q3 (Retail +2.7% impacted ~100 bps by employee benefits incentive true-up; Specialty Distribution +4.6%), and +3.6% in Q2 .
• Management raised full‑year adjusted EBITDA margin outlook from “flat vs 2024” to “up modestly,” citing stronger YTD performance and mix (offset by Q4 seasonality at AP) .
• Potential stock catalysts into/through Q4 print: execution on AP integration and synergy cadence, delivery vs the Q4 guidance guardrails, Specialty Distribution trajectory given CAT and lender-placed headwinds, and any update on capital deployment (buybacks vs M&A) following new $1.5B authorization and a 10% dividend increase (32nd year) .

What Went Well and What Went Wrong

• What Went Well

  • Adjusted profitability expanded meaningfully: Q3 EBITDAC - Adjusted rose 41.8% with margin up to 36.6% (+170 bps YoY); adjusted diluted EPS grew 15.4% to $1.05 .
  • Strong cash generation: $1.0B operating cash flow in the first nine months of 2025 (+24% YoY); management targets full‑year CFO-to-revenue ratio of ~23%–25% .
  • Strategic scale and capital allocation: AP integration “progressing well”; board raised dividend by 10% (32nd consecutive year) and expanded buyback authorization to $1.5B. CEO: “We like to have options” on buybacks vs M&A .

• What Went Wrong

  • Organic growth deceleration in Retail: reported +2.7% in Q3, damped ~100 bps by employee benefits incentive adjustments; management expects Q4 Retail organic “similar” to Q3 as-reported .
  • Specialty Distribution margin mix and outlook: Q3 segment margin declined ~110 bps due to AP’s lower margin; Q4 organic growth expected to decline mid-single digits given tough comps (nonrecurring flood revenue), CAT property rate pressure, and slower lender‑placed growth .
  • GAAP EPS pressure: Q3 GAAP diluted EPS fell to $0.68 due to acquisition/integration costs ($50m) and escrow mark-to-market ($8m) tied to AP; Income Before Income Taxes margin decreased to 19.4% (from 26.7%) .

Financial Results

Note: Q4 2025 has not yet been reported.

Consolidated Organic Revenue Growth and Adjusted Profit

• Organic revenue growth %: Q2 2025: 3.6% ; Q3 2025: 3.5% .
• EBITDAC - Adjusted ($m): Q2 2025: $471 ; Q3 2025: $587 .

Segment Snapshot (Q3 2025)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are very excited to welcome over 5,000 new teammates… We are pleased with our overall growth, profitability and cash flow conversion.” – Powell Brown, CEO (Q3) .
• “For this quarter, acquisition and integration costs were approximately $50 million… we recorded approximately $8 million of a non‑cash charge related to the change in the fair value of our common stock held in escrow.” – Andrew Watts, CFO (Q3) .
• “As it relates to… Q4… we anticipate [AP] revenues to be $430–$450 million… amortization $110–$115 million… interest $95–$100 million… investment and other income $20–$25 million.” – Andrew Watts, CFO (Q3) .
• “Our pipeline looks good… we’ll remain disciplined in our capital deployment strategy so we can continue to drive long‑term shareholder value.” – Powell Brown, CEO (Q3) .
• On Retail organic growth: “We are not skirting the issue that it was 2.7%.” – Powell Brown, CEO (Q3) .

Q&A Highlights

• Organic growth vs margins: Management cautioned against directly correlating organic growth to margins due to significant contingent commissions; long‑term margin range thought of as ~30%–35% .
• Government shutdown/flood: Renewals proceed; no new NFIP policies during shutdown; backlog later; some revenue timing impacts in Specialty and Retail .
• Property pricing into year end: If CAT season is clean, late‑Q4 carriers may deploy capacity aggressively; possible additional rate pressure in December outliers .
• Employee benefits dynamics: Incentive adjustments weighed ~100 bps on Retail organic in Q3; plan design changes (e.g., GLP‑1 coverage) are key levers to manage cost trends .
• Specialty Distribution outlook: Mid‑single‑digit organic decline expected in Q4 due to tough comps (nonrecurring Q4 flood revenue in 2024), CAT property rate pressure, and slower lender‑placed growth .
• Capital allocation: $1.5B buyback authorization provides flexibility; management balances buybacks vs M&A based on intrinsic value and returns .

Estimates Context

• S&P Global consensus for Q4 2025 EPS and revenue was unavailable at time of writing due to access limits. As a result, we cannot provide S&P Global estimate comparisons for Q4 2025. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

• Watch Q4 delivery vs guidance guardrails: Retail organic “similar” to Q3 as‑reported (~2.7%), Specialty organic decline mid‑single digits, and contingent commissions $30–$40m; these will set the tone for FY25 exit velocity .
• Margin resilience remains the story: Adjusted margins expanded in Q3; FY adjusted margin outlook raised to “up modestly,” despite AP seasonality in Q4 .
• AP integration on track: Q4 AP revenue of $430–$450m and 3‑year synergy program underpin medium‑term EBITDAC scaling; monitor synergy pacing and any cost-to-achieve .
• Property market nuance: Potential late‑Q4 capacity deployment could pressure property rates; Specialty Distribution outlook already embeds CAT and lender‑placed headwinds .
• Employee benefits: Incentive calibration and plan design (e.g., GLP‑1 coverage) remain important to growth cadence and profitability in Retail .
• Cash generation and capital allocation: Strong cash flow conversion supports deleveraging toward targets and optionality between M&A and buybacks following the expanded authorization and higher dividend .
• Into the print: With Q4 estimates unavailable from S&P Global, framing will rely on management’s specific Q4 ranges and qualitative cues from Q3; execution against these should be the primary near‑term stock driver.

Appendix: Sources Reviewed

• Q3 2025 8‑K (Press release; full financial statements and non‑GAAP reconciliations) .
• Q2 2025 8‑K (Press release; full financial statements and non‑GAAP reconciliations) .
• Q4 2024 8‑K (for YoY baseline and non‑GAAP reconciliations) .
• Q3 2025 Earnings Call Transcript (prepared remarks and Q&A) .

Note on Q4 2025 materials: We searched for Q4 2025 8‑K (Item 2.02), earnings call transcript, and press releases dated Jan–Mar 2026 but found none in the document system at this time. We therefore based this recap on the most recent reported quarter (Q3 2025), management’s explicit Q4 guidance, and prior-quarter trends, and we will update once Q4 2025 primary sources are published [ListDocuments returned no Q4 2025 entries].