Financial Data and Key Metrics Changes - The company reported total revenues of $1.3 billion for the second quarter, representing a growth of 9.1% year-over-year and 3.6% organically [6][17] - Adjusted EBITDAC margin improved by 100 basis points to 36.7%, and adjusted earnings per share grew over 10% to $1.03 [6][18] - Income before income taxes increased by 13.6%, and EBITDAC grew by 12.1% [17] Business Line Data and Key Metrics Changes - The Retail segment grew total revenues by 7.9% with organic growth of 3%, impacted by slowing admitted and cat property rates [19] - The Programs segment delivered organic growth of 4.6%, with total revenues increasing by 6.1% driven by higher contingent commissions [20] - The Wholesale Brokerage segment had total revenues increasing by 14.5% and organic growth of 3.9%, with EBITDAC margin increasing by 80 basis points to 34.1% [21] Market Data and Key Metrics Changes - Insurance pricing rates for most lines moderated further in the second quarter, with notable exceptions in auto, casualty, and cat property [8][9] - Rates in the admitted P&C market continued to moderate, with increases of 1% to 5% compared to the prior year [9] - The E&S property market saw rates down 15% to 30%, indicating continued pressure on rates [11] Company Strategy and Development Direction - The company is focused on integrating the acquisition of RSC Topco (Ascession) and plans to remain active in the M&A space [4][25] - The company aims to deploy capital in a disciplined manner to ensure long-term growth and profitability [27] - A new division called Specialty Distribution will be formed by combining the Programs and Wholesale segments starting in the third quarter [22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic environment, noting that customers are generally investing in their businesses despite some delays in decision-making [7][24] - The company expects admitted rates to continue to moderate in the second half of the year, with cat property rates likely to decrease further [25] - Management remains confident in the company's ability to grow and deliver profitable results, with a strong cash flow conversion [27] Other Important Information - The company completed 15 acquisitions with estimated annual revenues of $22 million during the quarter [6] - Cash flow from operations increased by $164 million year-over-year to $537 million [22] - The company successfully issued $4.4 billion in equity and $4.2 billion in debt to support the acquisition [22] Q&A Session Summary Question: Retail organic growth fluctuations - Management noted that over half the discrepancy in retail organic growth was due to downward pressure on rates and lower new business [30][31] Question: Growth in contingent commissions - Management indicated that overall profitability for carriers is up, contributing to strong growth in contingent commissions [33][34] Question: Financials of Ascension Strategies - Management confirmed that revenue and expense synergies from the acquisition are expected to be realized over the next three and a half years [40][41] Question: Impact of lower new business - Management clarified that the lower new business was not indicative of a market trend but rather a temporary fluctuation [72][74] Question: E&S pricing and competition - Management acknowledged that some admitted markets are regaining business but emphasized that it is not significant enough to impact overall performance [76][78] Question: Margin expectations for acquired businesses - Management stated that it typically takes 12 to 36 months to achieve targeted margins for acquired businesses, depending on the specific business [85][86] Question: Economic growth and pricing impact on organic growth - Management indicated that organic growth is influenced by both economic growth and pricing, with a historical split of approximately two-thirds from economic growth and one-third from pricing [90][92]

Financial Performance - Total revenue reached $1.285 billion, reflecting a 9.1% increase compared to $1.178 billion in the second quarter of 2024[23] - Organic revenue grew by 3.6%, reaching $1.162 billion compared to $1.122 billion in the same period last year[16, 23] - Adjusted EBITDAC increased by 12.1% to $471 million, up from $420 million in the second quarter of 2024[23] - Adjusted EBITDAC margin improved by 100 basis points to 36.7%[16, 23] - Adjusted diluted net income per share increased by 10.8% to $1.03, compared to $0.93 in the prior year[16, 23] Segment Performance - Retail segment organic revenue grew by 3.0%[20] - Programs segment organic revenue increased by 4.6%[21] - Wholesale Brokerage segment experienced an organic revenue growth of 3.9%[22] Market Overview and Strategic Initiatives - The company closed 15 transactions in M&A during the quarter[18] - The acquisition of Accession is on track to close on August 1st[41]

Core Insights - Brown & Brown (BRO) reported $1.29 billion in revenue for the quarter ended June 2025, a year-over-year increase of 9.1% and an EPS of $1.03 compared to $0.93 a year ago, exceeding Zacks Consensus Estimates [1] - The reported revenue was a surprise of +0.69% over the consensus estimate of $1.28 billion, while the EPS surprise was +4.04% over the consensus estimate of $0.99 [1] Financial Performance Metrics - Total organic growth was 3.6%, below the estimated 5.7% by five analysts [4] - Revenues from commissions and fees were $1.25 billion, slightly below the average estimate of $1.26 billion, representing an 8.2% year-over-year increase [4] - Investment income reached $35 million, significantly above the estimated $18.51 million, marking a 59.1% year-over-year increase [4] - Core commissions and fees totaled $1.2 billion, slightly below the average estimate of $1.22 billion, with a year-over-year change of 7.7% [4] - Profit-sharing contingent commissions were $45 million, exceeding the estimated $41.21 million, reflecting a 25% year-over-year increase [4] - Core commissions and fees from programs were $344 million, below the average estimate of $351.83 million, with a year-over-year change of 4.9% [4] - Core commissions and fees from retail were $687 million, slightly below the estimate of $695.13 million, showing an 8% year-over-year increase [4] - Core commissions and fees from wholesale brokerage were $173 million, above the average estimate of $165.56 million, representing a 12.3% year-over-year increase [4] - Total revenues from other sources were $25 million, significantly above the estimated $9.75 million [4] - Total revenues from wholesale brokerage were $182 million, exceeding the average estimate of $172.12 million [4] - Total revenues from programs were $381 million, slightly below the average estimate of $385.14 million [4] - Total revenues from retail were $697 million, compared to the average estimate of $711.35 million [4] Stock Performance - Shares of Brown & Brown have returned -5.7% over the past month, contrasting with the Zacks S&P 500 composite's +4.9% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Brown & Brown (BRO) reported quarterly earnings of $1.03 per share, exceeding the Zacks Consensus Estimate of $0.99 per share, and showing an increase from $0.93 per share a year ago, resulting in an earnings surprise of +4.04% [1] - The company achieved revenues of $1.29 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.69% and up from $1.18 billion year-over-year [2] - Brown & Brown has outperformed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times in the same period [2] Earnings Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.92 on revenues of $1.27 billion, and for the current fiscal year, it is $4.19 on revenues of $5.2 billion [7] Industry Context - The Insurance - Brokerage industry, to which Brown & Brown belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements for Brown & Brown, Inc. for Q2 2025, with detailed notes [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Six-month revenues increased to **$2.69 billion**, net income to **$563 million**; Q2 net income decreased Condensed Consolidated Statements of Income (Six Months Ended June 30) | (in millions, except per share data) | 2025 | 2024 | | :--- | :--- | :--- | | **Total revenues** | $2,689 | $2,435 | | Total expenses | $1,951 | $1,723 | | Income before income taxes | $738 | $712 | | **Net income attributable to the Company** | **$563** | **$550** | | Diluted net income per share | $1.93 | $1.92 | Condensed Consolidated Statements of Income (Three Months Ended June 30) | (in millions, except per share data) | 2025 | 2024 | | :--- | :--- | :--- | | **Total revenues** | $1,285 | $1,178 | | Total expenses | $974 | $832 | | Income before income taxes | $311 | $346 | | **Net income attributable to the Company** | **$231** | **$257** | | Diluted net income per share | $0.78 | $0.90 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$25.6 billion** due to higher cash and debt, with equity growing to **$11.6 billion** Balance Sheet Highlights (as of June 30, 2025 vs. Dec 31, 2024) | (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $8,893 | $675 | | Goodwill | $8,365 | $7,970 | | **Total assets** | **$25,636** | **$17,612** | | **Long-term debt** | $7,470 | $3,599 | | **Total equity** | **$11,617** | **$6,437** | | Total liabilities and equity | $25,636 | $17,612 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$538 million**; financing provided **$7.98 billion** for acquisitions, leading to **$8.4 billion** cash increase Cash Flow Summary (Six Months Ended June 30, 2025) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $538 | $373 | | Net cash used in investing activities | ($187) | ($77) | | Net cash provided by financing activities | $7,981 | $375 | | **Net increase in cash and cash equivalents** | **$8,417** | **$671** | - Major financing activities included **$4.315 billion** from a common stock issuance and **$4.192 billion** from new long-term debt, primarily to fund the pending Accession acquisition[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment operations, revenue, business combinations (Accession acquisition), goodwill, debt, and equity - The company's business is divided into three reportable segments: Retail, Programs, and Wholesale Brokerage. These segments market and sell property, casualty, and employee benefits insurance products and services[28](index=28&type=chunk) - On June 10, 2025, the Company entered into an agreement to acquire RSC Topco, Inc. ("Accession") for an aggregate purchase price of **$9.825 billion**. The transaction is expected to close in Q3 2025[48](index=48&type=chunk) - To fund the Accession acquisition, the company issued **$4.2 billion** in new senior notes and raised **$4.315 billion** in net proceeds from a common stock offering in June 2025[60](index=60&type=chunk)[92](index=92&type=chunk) - During the first six months of 2025, the company completed **29** smaller acquisitions for a total consideration of **$210 million**[47](index=47&type=chunk)[53](index=53&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 financial results, highlighting revenue growth, Q2 income decrease due to Accession acquisition costs, segment performance, and liquidity Q2 2025 Key Performance Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $1,285M | $1,178M | | Income Before Income Taxes | $311M | $346M | | Organic Revenue Growth | 3.6% | 10.0% | | EBITDAC Margin - Adjusted | 36.7% | 35.7% | - Q2 2025 total commissions and fees grew **8.2%**, with a consolidated Organic Revenue growth rate of **3.6%**[102](index=102&type=chunk) - Q2 2025 income before income taxes decreased by **10.1%** year-over-year, impacted by a **$31 million** gain on disposal in Q2 2024 and **$37 million** in Acquisition/Integration Costs for the pending Accession deal in Q2 2025[104](index=104&type=chunk)[105](index=105&type=chunk)[120](index=120&type=chunk) [Results of Operations — Segment Information](index=44&type=section&id=Results%20of%20Operations%20%E2%80%94%20Segment%20Information) Details Q2 2025 segment performance: Retail organic growth **3.0%**, Programs **4.6%**, Wholesale Brokerage **3.9%**; Programs had highest EBITDAC Margin - Adjusted Q2 2025 Organic Revenue Growth by Segment | Segment | Organic Revenue Growth Rate | | :--- | :--- | | Retail | 3.0% | | Programs | 4.6% | | Wholesale Brokerage | 3.9% | | **Total** | **3.6%** | Q2 2025 EBITDAC Margin - Adjusted by Segment | Segment | EBITDAC Margin - Adjusted | | :--- | :--- | | Retail | 27.5% | | Programs | 52.8% | | Wholesale Brokerage | 34.1% | | **Total** | **36.7%** | [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity strengthened with cash increasing to **$8.9 billion** due to **$8.5 billion** raised from debt and equity for Accession acquisition; total debt rose - Cash and cash equivalents increased by **$8.2 billion** during the first six months of 2025, reaching **$8.9 billion**[178](index=178&type=chunk) - Total debt increased by **$3.7 billion** to **$7.5 billion** as of June 30, 2025, primarily from the issuance of **$4.2 billion** in senior notes to fund the Accession acquisition[191](index=191&type=chunk)[195](index=195&type=chunk) - The company raised net proceeds of **$4.315 billion** from a common stock offering of **43.1 million** shares in June 2025[197](index=197&type=chunk) Contractual Cash Obligations as of June 30, 2025 | (in millions) | Total | Less than 1 year | 1-3 years | 4-5 years | After 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $7,619 | $75 | $1,394 | $1,150 | $5,000 | | Interest obligations | $4,369 | $379 | $682 | $588 | $2,720 | | Maximum future acquisition contingent payments | $429 | $133 | $291 | $5 | $— | | **Total** | **$12,972** | **$656** | **$2,490** | **$1,829** | **$7,997** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Company faces market risk from interest rates, foreign exchange, and equity prices, but management deems these risks immaterial - The company has **$569 million** in outstanding debt tied to the Secured Overnight Financing Rate (SOFR), exposing it to floating interest rate risk[207](index=207&type=chunk) - The company is subject to translational foreign exchange rate risk from operations in currencies like the British pound, Canadian dollar, and euro, but does not believe the risk is material[208](index=208&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls and procedures are effective as of June 30, 2025, with no material changes to internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[209](index=209&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025[210](index=210&type=chunk) [PART II. OTHER INFORMATION](index=64&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) No new material legal proceedings or developments occurred in Q2 2025, and existing proceedings are not expected to materially affect financials - No new material legal proceedings or developments occurred in the quarter ended June 30, 2025[215](index=215&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) New material risks related to Accession acquisition include non-completion, failure to realize benefits, increased indebtedness, and specific business risks - The acquisition of Accession may not be completed within the expected timeframe, or at all, which could adversely affect business and financial results[217](index=217&type=chunk) - Financing the transaction will significantly increase the company's indebtedness from its June 30, 2025 level of **$7.5 billion**, potentially reducing business flexibility and increasing interest expense[219](index=219&type=chunk) - The company will be subject to risks from Accession's business, including underwriting risk from its captive insurance companies and potential litigation or regulatory scrutiny from the IRS regarding its 831(b) captive advisory services[222](index=222&type=chunk)[223](index=223&type=chunk)[225](index=225&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Company repurchased **5,046** shares at **$111.16** in Q2 2025 for tax withholding, with **$249 million** remaining for repurchases Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | — | $— | | May 2025 | 4,963 | $111.16 | | June 2025 | 83 | $111.53 | | **Total** | **5,046** | **$111.16** | - All shares purchased were attributable to shares withheld for taxes related to vesting of employee stock awards[230](index=230&type=chunk) - The company has approximately **$249 million** available for share repurchases under its authorized plan[230](index=230&type=chunk) [Item 5. Other Information](index=68&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q2 2025 - No officers or directors adopted or terminated any Rule 10b5-1 trading arrangements in Q2 2025[228](index=228&type=chunk) [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including Accession Merger Agreement, debt indentures, and CEO/CFO certifications

[Financial Highlights](index=1&type=section&id=Brown%20%26%20Brown%2C%20Inc.%20announces%20second%20quarter%202025%20results) Brown & Brown, Inc. reported strong revenue growth for Q2 and H1 2025, with adjusted diluted net income per share increasing despite a GAAP decrease [Q2 and Six-Month 2025 Performance Summary](index=1&type=section&id=Q2%20and%20Six-Month%202025%20Performance%20Summary) Brown & Brown reported strong revenue growth for the second quarter and first six months of 2025, with Q2 total revenues increasing 9.1% to $1.3 billion and adjusted diluted net income per share rising 10.8% to $1.03 Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Change | | :--- | :--- | :--- | | Total Revenues | $1.3 billion | +9.1% | | Organic Revenue Growth | 3.6% | N/A | | Income Before Income Taxes | $311 million | -10.1% | | Net Income | $231 million | -10.1% | | Diluted Net Income Per Share (GAAP) | $0.78 | -13.3% | | Diluted Net Income Per Share (Adjusted) | $1.03 | +10.8% | | EBITDAC - Adjusted | $471 million | +12.1% | Six Months Ended June 30, 2025 Key Financial Metrics (vs. 2024) | Metric | H1 2025 | Change | | :--- | :--- | :--- | | Total Revenues | $2.7 billion | +10.4% | | Organic Revenue Growth | 5.1% | N/A | | Income Before Income Taxes | $738 million | +3.7% | | Net Income | $563 million | +2.4% | | Diluted Net Income Per Share (GAAP) | $1.93 | +0.5% | | Diluted Net Income Per Share (Adjusted) | $2.32 | +12.1% | | EBITDAC - Adjusted | $1.0 billion | +13.6% | - The President and CEO, J. Powell Brown, expressed satisfaction with the quarterly earnings and noted positive momentum for the second half of the year[4](index=4&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the company's consolidated income statements, balance sheets, and cash flow statements for the reported periods [Consolidated Statements of Income](index=4&type=section&id=Brown%20%26%20Brown%2C%20Inc.%20Consolidated%20Statements%20of%20Income) For Q2 2025, total revenues increased to $1,285 million, but net income attributable to the company decreased to $231 million, while H1 2025 saw total revenues grow to $2,689 million and net income slightly increase to $563 million Income Statement Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,285 | $1,178 | $2,689 | $2,435 | | Total Expenses | $974 | $832 | $1,951 | $1,723 | | Income Before Income Taxes | $311 | $346 | $738 | $712 | | Net Income Attributable to Company | $231 | $257 | $563 | $550 | | Diluted Net Income Per Share | $0.78 | $0.90 | $1.93 | $1.92 | [Consolidated Balance Sheets](index=5&type=section&id=Brown%20%26%20Brown%2C%20Inc.%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets significantly increased to $25,636 million, driven by a substantial rise in cash and cash equivalents to $8,893 million and long-term debt to $7,470 million, largely for the pending Accession acquisition Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $8,893 | $675 | | Total Assets | $25,636 | $17,612 | | Long-term debt | $7,470 | $3,599 | | Total Equity | $11,617 | $6,437 | | Total Liabilities and Equity | $25,636 | $17,612 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Brown%20%26%20Brown%2C%20Inc.%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was $538 million, with a significant net cash inflow of $7,981 million from financing activities, primarily due to debt and stock issuance Six Months Ended June 30 Cash Flow Summary (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $538 | $373 | | Net cash used in investing activities | ($187) | ($77) | | Net cash provided by financing activities | $7,981 | $375 | | **Net increase in cash** | **$8,417** | **$671** | - Financing activities were dominated by proceeds from long-term debt (**$4.19 billion**) and issuance of common stock (**$4.32 billion**), significantly boosting the company's cash position[18](index=18&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=2&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides reconciliations of GAAP financial measures to non-GAAP metrics, including Organic Revenue, Adjusted Diluted EPS, and Adjusted EBITDAC, used for performance evaluation [Reconciliation of Commissions and Fees to Organic Revenue](index=2&type=section&id=Reconciliation%20of%20Commissions%20and%20Fees%20to%20Organic%20Revenue) This section reconciles GAAP commissions and fees to Organic Revenue, reporting growth of 3.6% for Q2 and 5.1% for the first six months of 2025 Organic Revenue Growth | Period | Organic Revenue Growth % | | :--- | :--- | | Three Months Ended June 30, 2025 | 3.6% | | Six Months Ended June 30, 2025 | 5.1% | [Reconciliation of Diluted Net Income Per Share to Diluted Net Income Per Share - Adjusted](index=2&type=section&id=Reconciliation%20of%20Diluted%20Net%20Income%20Per%20Share%20to%20Diluted%20Net%20Income%20Per%20Share%20-%20Adjusted) GAAP Diluted Net Income Per Share is adjusted for specific items to arrive at Diluted Net Income Per Share - Adjusted, which was $1.03 for Q2 2025 (up 10.8%) and $2.32 for H1 2025 (up 12.1%) Diluted EPS Reconciliation (GAAP to Adjusted) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Diluted net income per share (GAAP) | $0.78 | $0.90 | $1.93 | $1.92 | | **Diluted Net Income Per Share - Adjusted** | **$1.03** | **$0.93** | **$2.32** | **$2.07** | [Reconciliation of Income Before Income Taxes to EBITDAC and EBITDAC - Adjusted](index=3&type=section&id=Reconciliation%20of%20Income%20Before%20Income%20Taxes%20to%20EBITDAC%20and%20EBITDAC%20-%20Adjusted) This table reconciles Income Before Income Taxes to EBITDAC and EBITDAC - Adjusted, showing Q2 2025 Adjusted EBITDAC increased to $471 million with a margin improvement to 36.7%, positively impacted by interest income from funds for the Accession acquisition EBITDAC - Adjusted and Margin (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Income before income taxes | $311 | $346 | $738 | $712 | | **EBITDAC - Adjusted** | **$471** | **$420** | **$1,005** | **$885** | | **EBITDAC Margin - Adjusted** | **36.7%** | **35.7%** | **37.4%** | **36.3%** | - 2025 results were positively impacted by approximately **$13 million** in interest income from proceeds of a recent stock offering and senior notes issuance, held in preparation for the pending acquisition of RSC Topco, Inc. ("Accession")[10](index=10&type=chunk) [Definitions of Non-GAAP Measures](index=9&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company defines its non-GAAP financial measures, including Organic Revenue, EBITDAC, and Diluted Net Income Per Share - Adjusted, which are used by management for evaluating operating performance and executive compensation - The company uses non-GAAP measures to provide additional meaningful methods to evaluate operating performance by excluding items with high variability that are not indicative of ongoing performance[23](index=23&type=chunk) - Key non-GAAP measures are defined as: - **Organic Revenue:** Core commissions and fees adjusted for the first 12 months of acquisitions, divested businesses, and foreign currency translation - **EBITDAC:** Income before interest, taxes, depreciation, amortization, and change in estimated acquisition earn-out payables - **Diluted Net Income Per Share - Adjusted:** Diluted EPS excluding the after-tax impact of changes in earn-out payables, gains/losses on disposal, acquisition/integration costs, and amortization[25](index=25&type=chunk)[31](index=31&type=chunk) - Organic Revenue growth, Diluted Net Income Per Share - Adjusted, and EBITDAC Margin - Adjusted are used as key performance metrics for short-term and long-term incentive compensation plans[24](index=24&type=chunk) [Other Information](index=8&type=section&id=Other%20Information) This section provides details on the upcoming conference call, an overview of Brown & Brown, Inc., and important forward-looking statements [Conference Call Information](index=8&type=section&id=Conference%20call%2C%20webcast%20and%20slide%20presentation) The company will host a conference call and webcast on Tuesday, July 29, 2025, at 8:00 AM (EDT) to discuss the second quarter 2025 financial results, with a slide presentation available online - A conference call to discuss Q2 2025 results is scheduled for Tuesday, July 29, 2025, at 8:00 AM (EDT)[19](index=19&type=chunk) [About Brown & Brown, Inc.](index=8&type=section&id=About%20Brown%20%26%20Brown) Brown & Brown, Inc. is a leading insurance brokerage firm established in 1939, providing customer-focused risk management solutions through a global network of over 500 locations and more than 17,000 professionals - Brown & Brown is a leading insurance brokerage firm providing risk management solutions since 1939, with over **17,000 professionals** across **500+ locations**[20](index=20&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-looking%20statements) This section provides a safe harbor statement cautioning that the press release contains forward-looking statements subject to numerous factors that could cause actual results to differ materially, including risks related to the pending Accession acquisition, financing, cybersecurity, economic conditions, and regulatory changes - The report contains forward-looking statements that are subject to a number of risks and uncertainties which could cause actual results to differ materially[21](index=21&type=chunk) - Key risks include: final financial results differing from preliminary numbers, risks related to the timing and completion of the Accession acquisition, failure to realize anticipated benefits from the transaction, increased indebtedness from financing, cybersecurity attacks, and adverse economic or political conditions[21](index=21&type=chunk)[22](index=22&type=chunk)

Core Insights - Brown & Brown, Inc. reported second quarter 2025 revenues of $1.3 billion, a 9.1% increase from the previous year, driven by an 8.2% rise in commissions and fees and a 3.6% growth in Organic Revenue [2][3] - The company's income before income taxes was $311 million, down 10.1% year-over-year, with the income before income taxes margin decreasing to 24.2% from 29.4% [2][3] - Net income attributable to the company was $231 million, a decrease of $26 million or 10.1%, with diluted net income per share falling to $0.78, a 13.3% decline [2][3] Financial Performance - For the first half of 2025, revenues reached $2.7 billion, up 10.4% compared to the same period in 2024, with commissions and fees increasing by 10.2% and Organic Revenue rising by 5.1% [3] - EBITDAC - Adjusted for the second quarter was $471 million, a 12.1% increase from the prior year, with an EBITDAC margin - Adjusted of 36.7%, up from 35.7% [2][3] - The company’s net income for the first half of 2025 was $563 million, a 2.4% increase, with diluted net income per share rising to $1.93, a 0.5% increase [3] Revenue Breakdown - Commissions and fees for the second quarter of 2025 totaled $1.249 billion, compared to $1.154 billion in the same quarter of 2024 [4][9] - Organic Revenue for the second quarter was $1.162 billion, reflecting a growth of 3.6% year-over-year [4][9] - The company experienced a profit-sharing contingent commissions decrease, impacting overall revenue growth [4] Expense Analysis - Total expenses for the second quarter were $974 million, up from $832 million in the previous year, with employee compensation and benefits rising to $640 million [9] - The income before income taxes margin for the first half of 2025 was 27.4%, down from 29.2% in the same period of 2024 [3][9] - Amortization expenses increased to $103 million for the first half of 2025, compared to $86 million in the prior year [12] Cash Flow and Balance Sheet - The company reported net cash provided by operating activities of $538 million for the first half of 2025, compared to $373 million in 2024 [12] - Cash and cash equivalents at the end of the period were $10.919 billion, significantly up from $2.974 billion at the end of June 2024 [12][10] - Total assets increased to $25.636 billion as of June 30, 2025, compared to $17.612 billion at the end of 2024 [10][11] Management Commentary - J. Powell Brown, the president and CEO, expressed satisfaction with the earnings for the quarter and noted positive momentum heading into the second half of the year [4]

Core Insights - Brown & Brown, Inc. (BRO) is anticipated to show improvements in both revenue and earnings for the second quarter of 2025, with revenue expected to reach $1.28 billion, reflecting an 8.3% increase year-over-year [1] - The consensus estimate for earnings per share is set at 99 cents, indicating a 6.4% year-over-year growth, although this estimate has decreased by 1.9% in the last 30 days [2] Revenue and Earnings Estimates - The Zacks Consensus Estimate for BRO's second-quarter revenues is $1.28 billion, which is an 8.3% growth from the previous year [1] - The expected earnings per share is 99 cents, which shows a year-over-year increase of 6.4% [2] Earnings Prediction Model - The current Earnings ESP for BRO is -3.76%, indicating that the most accurate estimate of 95 cents is lower than the consensus estimate of 99 cents, suggesting a lack of conclusive evidence for an earnings beat [3] - BRO holds a Zacks Rank of 2, indicating a "Buy" recommendation [4] Factors Influencing Q2 Results - Core commissions and fees are expected to benefit from net new and renewal business, with estimates pegged at $1.2 billion [5] - Profit-sharing contingent commissions are projected to increase to $59.8 million, significantly higher than the Zacks Consensus Estimate of $41.2 million, due to improved underwriting results and business growth [6] - Net investment income is expected to reach $22.9 million, benefiting from higher average interest rates and cash balances, compared to the Zacks Consensus Estimate of $18.5 million [7] Segment Performance - Organic revenues in the Retail segment are expected to be $614.9 million, driven by net new business and renewals [7] - Organic revenues in the Wholesale Brokerage segment are anticipated to be $163.7 million, supported by net new business and exposure unit increases [8] - Total expenses are projected to rise to $960.8 million due to increased employee compensation, operating expenses, and other costs [8]

Core Insights - Wall Street analysts forecast that Brown & Brown (BRO) will report quarterly earnings of $0.99 per share, reflecting a year-over-year increase of 6.5% [1] - Anticipated revenues are projected to be $1.28 billion, indicating an 8.3% increase compared to the same quarter last year [1] Earnings Estimates - The consensus EPS estimate has been revised downward by 5.4% in the past 30 days, indicating a reassessment by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions to the stock [3] Revenue Projections - Analysts estimate 'Revenues- Commissions and fees' to be $1.26 billion, a 9.4% increase from the previous year [5] - 'Revenues- Investment income' is expected to be $18.51 million, showing a decline of 15.9% year-over-year [5] - 'Revenues- Core commissions and fees' are projected at $1.22 billion, reflecting a 9.5% increase from the prior year [5] Specific Revenue Metrics - 'Revenues- Profit-sharing contingent commissions' are expected to reach $41.21 million, a 14.5% increase from the year-ago quarter [6] - 'Core Commissions and Fees- National Programs' are forecasted at $351.83 million, indicating a 7.3% increase [6] - 'Core Commissions and Fees- Retail' are projected to be $695.13 million, reflecting a 9.3% increase [6] - 'Core Commissions and Fees- Wholesale Brokerage' is estimated at $165.56 million, a 7.5% increase [7] EBITDAC Estimates - 'Adjusted EBITDAC- Retail' is projected to be $212.15 million, up from $181.00 million in the previous year [7] - 'Adjusted EBITDAC- Wholesale Brokerage' is expected to be $52.19 million, slightly down from $53.00 million year-over-year [7] - 'Adjusted EBITDAC- National Programs' is anticipated to be $179.40 million, compared to $178.00 million in the same quarter last year [8] Stock Performance - Over the past month, shares of Brown & Brown have returned -7%, contrasting with the Zacks S&P 500 composite's +5.9% change [8] - Currently, BRO holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [8]

Company Announcement - Brown & Brown, Inc. will release its 2025 second-quarter earnings on July 28, 2025, after market close [1] - An investor update conference call will be hosted on July 29, 2025, at 8:00 a.m. EDT by the president and CEO, J. Powell Brown, and the executive vice president and CFO, R. Andrew Watts [1] - The conference call will be available for live listening on the company's website and will be archived for 14 days post-broadcast [1] Company Overview - Brown & Brown, Inc. is a leading insurance brokerage firm established in 1939, providing customer-centric risk management solutions [2] - The company operates over 500 locations globally and employs more than 17,000 professionals [2] - Brown & Brown is committed to delivering scalable and innovative strategies for customers throughout their growth journey [2]