BRP Group, Inc.(US:BWIN)2025-11-04 21:42Financial Performance - Total revenues for Q3 2025 reached $365.4 million, a 7.5% increase from $338.9 million in Q3 2024[22]. - Commissions and fees contributed $362.3 million to total revenues in Q3 2025, up from $335.2 million in Q3 2024, reflecting an 8.1% growth[22]. - Operating income for Q3 2025 was $3.2 million, a significant decrease from $15.4 million in Q3 2024, indicating a decline of 79.1%[22]. - Net loss attributable to Baldwin for Q3 2025 was $18.7 million, compared to a loss of $8.4 million in Q3 2024, representing a 122.5% increase in losses[22]. - Basic and diluted loss per share for Q3 2025 was $0.27, compared to $0.13 in Q3 2024, reflecting a 107.7% increase in loss per share[22]. - Total operating expenses for Q3 2025 were $362.2 million, up from $323.5 million in Q3 2024, marking a 12% increase[22]. - The company reported a comprehensive loss of $29.2 million for Q3 2025, compared to a comprehensive loss of $14.5 million in Q3 2024[22]. - For the nine months ended September 30, 2025, total revenues were $1.16 billion, an increase of 9.3% from $1.06 billion in the same period of 2024[22]. - The company experienced a net loss of $10.5 million for the nine months ended September 30, 2025, compared to a loss of $6.2 million for the same period in 2024[22]. - The Baldwin Insurance Group reported a net loss of $10,480,000 for the nine months ended September 30, 2025, compared to a net loss of $6,242,000 for the same period in 2024, indicating a year-over-year increase in losses of approximately 68%[32]. Assets and Liabilities - Total assets increased to $3.794 billion as of September 30, 2025, up from $3.535 billion at December 31, 2024, representing a growth of approximately 7.3%[15]. - Current assets reached $1.106 billion, compared to $1.026 billion at the end of 2024, indicating an increase of about 7.8%[15]. - Total liabilities rose to $2.666 billion, up from $2.526 billion, reflecting an increase of approximately 5.5%[15]. - The company reported a total stockholders' equity of $1.128 billion, an increase from $1.008 billion, marking a growth of around 11.9%[15]. - Cash and cash equivalents at the end of the period were $325,944,000, down from $344,716,000 at the end of the same period in 2024, representing a decrease of approximately 5.5%[32]. - The Baldwin Insurance Group's total stockholders' equity increased to $1,036,234,000 as of September 30, 2024, from $1,018,488,000 at the end of 2023, reflecting a growth of approximately 1.7%[29]. - Total accrued expenses and other current liabilities rose from $160,631,000 at December 31, 2024 to $221,665,000 at September 30, 2025, an increase of about 38.1%[95]. Cash Flow and Expenditures - Cash flows from operating activities resulted in a net cash used of $39,687,000 for the nine months ended September 30, 2025, contrasting with net cash provided of $53,754,000 in 2024[32]. - The company incurred capital expenditures of $29,174,000 during the nine months ended September 30, 2025, compared to $28,897,000 in the same period of 2024, reflecting a slight increase of 1%[32]. - The Company reported share-based compensation expense of $51,772,000 for the nine months ended September 30, 2025, compared to $46,764,000 in 2024, marking an increase of about 11%[32]. - The Company recorded share-based compensation expense of $22.0 million for the three months ended September 30, 2025, compared to $17.9 million for the same period in 2024, representing a 22.9% increase[115]. Business Combinations and Acquisitions - The Company completed two business combinations for an aggregate purchase price of $129.1 million during the nine months ended September 30, 2025[72]. - The Company acquired assets and equity interests of MultiStrat Group effective April 1, 2025, enhancing its capability to source alternative reinsurance capital[75]. - The Company acquired all outstanding equity interests of Hippo's Homebuilder Distribution Network effective July 1, 2025, improving its distribution capabilities for property and casualty insurance solutions[75]. - Total revenues from business combinations for the three months ended September 30, 2025, were $12.2 million, with net income of $2.7 million[77]. - The total consideration for Hippo's Homebuilder Distribution Network acquisition was $129.078 million, including cash consideration of $87.399 million[80]. - Recognized amounts of identifiable net assets acquired totaled $122.879 million, with goodwill recognized at $104.119 million[80]. Debt and Financing Activities - The 2025 Term Loan Facility has a principal amount of $1.006 billion, maturing on May 24, 2031[12]. - The revolving line of credit stands at $66 million, maturing on May 24, 2029[12]. - The company’s long-term debt as of December 31, 2024 was $1.44 billion, which included a term loan facility of $840 million and a revolving credit facility of $600 million[96]. - As of September 30, 2025, the outstanding borrowings under the 2025 Term Loans were $1.004 billion with an interest rate of 6.64%[101]. - The Company’s net cash provided by financing activities was $182,439,000 for the nine months ended September 30, 2025, compared to $38,390,000 in 2024, indicating a substantial increase in financing activities[32]. - The Company provided for $75.0 million of incremental term B loans as part of the amendments to the 2024 Credit Agreement[285]. - The aggregate principal amount of the 2025 Term Loans was increased to $1.006 billion following the amendments to the 2024 Credit Agreement[288]. Risk Management - The company emphasizes the importance of risk factors that could impact future performance, as outlined in their annual report[11]. - The company utilized derivative instruments to mitigate risks related to rising interest rates on cash flows, although not for trading or speculative purposes[283]. - A floating-to-fixed interest rate swap agreement was entered into with a notional amount of $500.0 million, converting variable rate cash flows into fixed rate payments at 3.244%[286]. - The interest rate swap aims to manage exposure to interest rate risk and provides predictability in interest expense[286]. - An increase of 100 basis points on the SOFR rate would have increased annual interest expense under the 2024 Credit Facility by $5.7 million[287]. Revenue Recognition - The Company recognizes revenue from commissions based on a percentage of premiums paid by clients, with allowances for estimated policy cancellations[57]. - The Company’s profit-sharing commissions are based on underwriting results and are subject to significant reversal due to loss performance uncertainty[61]. - The Company’s investment income primarily consists of interest earnings on cash invested in treasury money market funds[65]. - The Company recognized revenue of $38.1 million related to contract liabilities balance at December 31, 2024, during the nine months ended September 30, 2025[91]. Operating Groups - The Company generated commissions from insurance placement and profit-sharing income across its three operating groups[135]. - The Insurance Advisory Solutions operating group focuses on commercial risk management and employee benefits solutions[136]. - The Underwriting, Capacity & Technology Solutions group includes a proprietary, technology-enabled insurance product platform[136]. - The Mainstreet Insurance Solutions group offers personal and commercial insurance solutions through sheltered distribution channels[136].