BRP Group, Inc.(US:BWIN)2026-02-26 22:25Financial Performance - Total assets increased by $327.5 million year over year, while total liabilities rose by $251.9 million[298]. - Adjusted EBITDA margin is a key metric used to assess financial performance, calculated as adjusted EBITDA divided by total revenue[309]. - Organic revenue for the year ended December 31, 2024 was $1.37 billion, adjusted to exclude commissions and fees from divestitures[312]. - Organic revenue for 2025 reached $1,470,092, a 7% increase from $1,377,116 in 2024, with organic revenue growth of $100,049[313]. - Adjusted EBITDA for 2025 was $341,472, up from $312,485 in 2024, resulting in an adjusted EBITDA margin of 22.7% compared to 22.5% in the previous year[315]. - Net loss attributable to Baldwin for 2025 was $(33,813), compared to $(24,518) in 2024, with adjusted net income increasing to $198,942 from $176,898[318]. Revenue Growth - Total revenues for the Insurance Advisory Solutions (IAS) segment increased to $727,324 in 2025, a 2% rise from $711,936 in 2024[324]. - Core commissions and fees for IAS grew by $20,304, or 3%, to $661,590, driven by organic growth despite a 380 bps headwind from softening insurance rates[326]. - UCTS reported total revenues of $549.5 million for 2025, a 16% increase from $472.9 million in 2024, driven by a $71.4 million rise in core commissions and fees[333]. - Core commissions and fees for UCTS increased by $75.7 million, or 16%, year over year, with significant contributions from MSI ($41.2 million) and the Captive business ($22.6 million)[335]. - MIS total revenues reached $297.7 million in 2025, reflecting a 6% increase from $281.3 million in 2024, with core commissions and fees growing by $14.5 million[343]. Expenses and Liabilities - Long-term debt increased by $172.2 million due to 2025 refinancings, which included an upsizing of Term Loans by $175.0 million[303]. - Colleague compensation and benefits for IAS decreased by $13,342, or 3%, primarily due to a reduction in colleague earnout incentives[327]. - Other operating expenses for IAS increased by $6,741, or 8%, mainly due to higher professional fees and legal settlement expenses[328]. - Total operating expenses for UCTS increased by $53.6 million, or 13%, primarily due to a $34.1 million rise in other operating expenses[333]. - Colleague compensation and benefits for UCTS increased by $15.0 million, or 15%, year over year, influenced by partnership activity and elevated health plan costs[336]. Cash Flow and Financing - Net cash used in operating activities increased by $80.9 million year over year, primarily due to a $62.4 million increase in payments of contingent earnout consideration[387]. - Net cash used in investing activities increased by $153.6 million year over year, driven by an $85.7 million increase in cash consideration paid for partnership activity[388]. - Net cash provided by financing activities increased by $182.8 million year over year, primarily due to a $196.6 million increase in net proceeds from borrowings on credit facilities[389]. - As of December 31, 2025, the company had senior secured credit facilities totaling $1.606 billion, including a term loan of $1.006 billion and a revolving credit facility of $600 million[361]. - The company had $107 million outstanding under the Revolving Facility and $16 million of undrawn letters of credit as of December 31, 2025[361]. Intangible Assets and Goodwill - At December 31, 2025, the company had $978.4 million of intangible assets, including $908.4 million in acquired relationships[411]. - The company performed a qualitative analysis for its intangible assets as of October 1, 2025, and determined no impairment charges were necessary[411]. - At December 31, 2025, the company had $1.5 billion of goodwill, with no impairment charges recorded during 2025, 2024, or 2023[417]. - The company evaluates its definite-lived intangible assets for impairment whenever events indicate that the carrying amount may not be recoverable[407]. Contingent Consideration - Contingent consideration arrangements are based on achieving thresholds related to future revenues, EBITDA, or retention rates, reducing the risk of overpaying for acquisitions[419]. - As of December 31, 2025, the company recorded $23.3 million in contingent consideration liabilities related to five outstanding arrangements, with a total potential maximum of $50.0 million in remaining payments[425]. - The company recognized a $5.6 million expense related to the change in fair value of contingent consideration in 2025[424]. - The fair value of contingent consideration is estimated using a Monte Carlo Simulation approach, which incorporates forecasts of revenue, EBITDA, and retention rates[421]. Tax and Valuation - The company maintains a full valuation allowance against its deferred tax assets, reassessing their realizability as it emerges from its cumulative loss position[384]. - A full valuation allowance was established for deferred tax assets as of December 31, 2025, indicating it is more likely than not that these assets will not be realized[429]. - If the deferred tax assets were deemed realizable, the company would have recognized approximately $210.7 million in deferred tax assets on its balance sheet[430]. - The company would have recognized an income tax benefit of approximately $13.7 million for the year ended December 31, 2025, if no valuation allowance had been established[431].