10-QPeriod: Q1 FY2022

BROWN & BROWN, INC. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 9, 2022For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) reported strong top-line growth in the first quarter of 2022, with total revenues increasing by 11.0% to $904.7 million, driven primarily by a 11.1% rise in commissions and fees. This revenue growth was supported by a solid organic revenue growth rate of 7.8%, demonstrating continued underlying business expansion. Net income also saw a healthy increase of 10.3% to $220.3 million, resulting in diluted earnings per share of $0.77, up from $0.70 in the prior year's quarter. The company actively pursued its growth strategy through acquisitions, with significant investments made in the quarter, as evidenced by a substantial increase in total assets and goodwill. Long-term debt also saw a significant increase, largely due to debt issuance to fund these acquisitions and general corporate purposes. Despite increased debt levels, the company maintained a strong liquidity position, indicating a robust financial footing to support its strategic initiatives and ongoing operations.

Financial Highlights

50 data points
Beta

Revenue

$815.30M

Net Income

$199.70M

24.5% Net Margin

EPS (Diluted)

$0.70

Total Assets

$8.91B

Cash & Equivalents

$1.14B

Free Cash Flow

$126.60M

Financial Statements
Beta
Revenue$815.30M
Operating Expenses$576.10M
Interest Expense$16.30M
Net Income$199.70M
EPS (Basic)$0.71
EPS (Diluted)$0.70
Shares Outstanding (Basic)275.60M
Shares Outstanding (Diluted)277.00M

Key Highlights

  • 1Total revenues increased by 11.0% to $904.7 million in Q1 2022, primarily driven by an 11.1% increase in commissions and fees.
  • 2Net income rose by 10.3% to $220.3 million, with diluted earnings per share growing to $0.77 from $0.70 year-over-year.
  • 3Organic Revenue growth rate remained strong at 7.8%, indicating healthy underlying business expansion beyond acquisitions.
  • 4The company completed multiple acquisitions during the quarter, contributing $29.3 million to core commissions and fees, and significantly increasing goodwill on the balance sheet.
  • 5Total assets grew substantially by 15.1% to $11.3 billion, reflecting the impact of acquisitions and increased cash balances.
  • 6Long-term debt increased significantly by $1.5 billion to $3.5 billion, primarily due to new debt issuances to fund acquisitions and strategic initiatives.
  • 7Employee compensation and benefits as a percentage of total revenues decreased to 50.7% from 52.7% in the prior year, indicating improved operational leverage.

Frequently Asked Questions

Brown & Brown reported a strong increase in total revenues, which grew by 11.0% to $904.7 million for the three months ended March 31, 2022, compared to $815.3 million in the same period of 2021. This growth was largely fueled by a 11.1% increase in commissions and fees.

Net income increased by 10.3% to $220.3 million for the first quarter of 2022, up from $199.7 million in the prior year. This translated to an increase in diluted earnings per share from $0.70 to $0.77.

Acquisitions are a key growth strategy for Brown & Brown. In the first quarter of 2022, acquisitions contributed $29.3 million to core commissions and fees and significantly increased goodwill on the balance sheet. The company also saw a substantial increase in its debt and assets related to these strategic investments.

Total debt increased significantly due to new debt issuances totaling $1.2 billion to fund acquisitions. However, the company maintained a strong liquidity position, with cash and cash equivalents (inclusive of fiduciary cash) increasing to $2.4 billion. The company also has substantial available borrowing capacity under its credit facilities to support its liquidity needs.