10-QPeriod: Q2 FY2019

BROWN & BROWN, INC. Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 30, 2019For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) reported strong financial results for the quarter and six months ended June 30, 2019, demonstrating robust revenue growth and improved profitability. Total revenues increased by 21.6% for the quarter and 22.6% for the six-month period, primarily driven by a significant rise in commissions and fees. This growth was fueled by a combination of acquisitions and organic growth, with core commissions and fees from new businesses and net new/renewal business contributing substantially. Net income saw a healthy increase of 25.3% for the quarter and 25.4% for the six-month period. This improved profitability was supported by strong revenue growth, effectively managed operating expenses, and a slightly lower effective tax rate compared to the prior year. The company continues to execute its acquisition strategy effectively, integrating new businesses while maintaining solid operational performance across its diverse segments.

Financial Highlights

50 data points
Beta

Revenue

$473.19M

Net Income

$73.92M

15.6% Net Margin

EPS (Diluted)

$0.26

Total Assets

$5.70B

Cash & Equivalents

$477.93M

Free Cash Flow

$188.29M

Financial Statements
Beta
Revenue$473.19M
Operating Expenses$372.28M
Interest Expense$10.05M
Net Income$73.92M
EPS (Basic)$0.27
EPS (Diluted)$0.26
Shares Outstanding (Basic)270.08M
Shares Outstanding (Diluted)275.91M

Key Highlights

  • 1Total revenues increased by 21.6% year-over-year for the three months ended June 30, 2019, reaching $575.2 million, and by 22.6% for the six months ended June 30, 2019, reaching $1.19 billion.
  • 2Net income for the three months ended June 30, 2019, rose by 25.3% to $92.6 million, translating to diluted earnings per share of $0.33.
  • 3For the six months ended June 30, 2019, net income increased by 25.4% to $206.5 million, with diluted earnings per share of $0.73.
  • 4Commissions and fees, the primary revenue driver, grew by 21.4% for the quarter and 22.4% for the six-month period, driven by both acquisitions and organic growth.
  • 5Organic Revenue growth was 3.9% for the quarter and 2.9% for the six-month period, indicating healthy underlying business expansion.
  • 6The company successfully integrated 12 acquisitions (excluding book of business purchases) in the first six months of 2019, contributing significantly to revenue growth.
  • 7Employee compensation and benefits as a percentage of total revenues remained relatively stable, indicating effective cost management despite increased investment in personnel for growth.

Frequently Asked Questions

Brown & Brown reported strong revenue growth. For the three months ended June 30, 2019, total revenues increased by 21.6% to $575.2 million compared to the same period in 2018. For the six months ended June 30, 2019, total revenues increased by 22.6% to $1.19 billion.

The primary driver of revenue growth was commissions and fees, which increased by 21.4% for the quarter and 22.4% for the six-month period. This growth was a result of both significant contributions from recent acquisitions and positive organic revenue growth.

Profitability saw a significant improvement. Net income for the three months ended June 30, 2019, increased by 25.3% to $92.6 million, and for the six months ended June 30, 2019, it rose by 25.4% to $206.5 million. This was supported by strong revenue performance and well-managed expenses.

Acquisitions remain a key component of Brown & Brown's growth strategy. The company completed 12 acquisitions in the first six months of 2019 and continues to focus on acquiring high-quality insurance intermediaries to expand its operations and market reach.