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- **Revenue Growth**: 35.4% total, 3.5% organic, driven by M&A (Accession) and strong contingent commissions.
- **Margin Expansion**: EBITDAC margin +170bps to 36.6%, despite Accession seasonality. Cash flow conversion 23.5% of revenue.
- **Strategic Moves**: 10% dividend increase, $1.5B buyback, and disciplined M&A with cultural fit focus.
- **Challenges**: 1% drag on organic growth from employee benefits incentives; Specialty Distribution margin down 110bps.
- **Market Outlook**: Stable economy, cautious business investment, rising healthcare costs, and CAT property rate pressure.

**【CEO Summary Section】**
- **Revenue and Growth**: Q3 revenue of $1.6 billion, up 35.4% YoY, with 3.5% organic growth. Adjusted EBITDAC margin improved 170bps to 36.6%, and EPS rose 15% to $1.05. 7 acquisitions, including Accession ($1.7B annual revenue), drove M&A growth.
- **Leadership Changes**: Steve Hearn appointed Retail President; Barrett Brown on personal leave. Dividend increased 10%, and $1.5B share buyback authorized.
- **Market Insights**: Stable economic growth, cautious business investment, rising healthcare costs (6-8% medical, 10%+ pharmacy). CAT property rates down 5-30%, casualty rates up 5-10%, E&S casualty lines under pressure.

**【CFO Financial Commentary】**
- **Financial Performance**: GAAP net income $420M, non-GAAP EPS $1.08 (vs. expectations). $50M acquisition costs and $8M noncash escrow charge. Cash flow $1B (9M), 23.5% of revenue. Q4 guidance: Accession revenue $430-450M, EBITDAC margin slightly below full year target.
- **Leverage and Capital**: Gross debt target 0-3x EBITDA, net 0-2.5x. Plan to deleverage within 12-18 months. Balancing buybacks and M&A based on valuation.

**【Q&A Highlights】**
- **Government Shutdown Impact**: Medicare/set-aside and flood businesses face delays, but renewals backlog manageable. Q4 contingent commissions $30-40M (excluding Accession).
- **Organic Growth & Margins**: Retail organic growth 2.7% (3.7% adj. for incentives). Margins influenced by contingents, not just organic growth. Specialty Distribution margin down 110bps due to Accession seasonality.
- **Property & Casualty Trends**: CAT property rates stable, E&S casualty lines challenging. Reinsurance rates may pressure admitted primary business. Florida construction costs rising, but building activity continues.
- **Employee Benefits**: Companies modifying plans to manage rising costs (e.g., weight loss drug coverage). Health care consulting demand driven by high-cost claimants.
- **Technology & Integration**: Investing in data analytics and customer experience. Accession integration on track, with synergies expected over 3 years.

Brown & Brown, Inc. (BRO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

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Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

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Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

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Diluted EPS from Discontinued Operations

BRO

BRO fundamentals

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