Summary
Brown & Brown, Inc. (BRO) reported strong financial performance for the third quarter and first nine months of 2022, demonstrating significant revenue growth driven by both organic expansion and strategic acquisitions. Total revenues increased by 20.4% for the quarter and 15.5% year-to-date, primarily from core commissions and fees. The company successfully integrated recent acquisitions, contributing substantially to revenue growth. Despite an increase in expenses, particularly employee compensation and benefits, and interest expenses due to higher debt levels, net income saw a healthy increase of 10.0% for the quarter and 8.5% year-to-date, reflecting effective cost management and strong operational execution. The company's strategic focus on acquisitions continues to be a key growth driver, evidenced by significant investments in businesses like GRP and Orchid. While this has led to increased debt levels and associated interest expenses, the company maintains a strong liquidity position and access to credit facilities. Management highlights the resilience of its diversified business model across its four segments—Retail, National Programs, Wholesale Brokerage, and Services—which collectively contributed to the overall positive performance, even amidst broader economic conditions and the impact of Hurricane Ian on certain segments.
Financial Highlights
51 data points| Revenue | $770.30M |
| Operating Expenses | $573.80M |
| Interest Expense | $16.20M |
| Net Income | $146.40M |
| EPS (Basic) | $0.52 |
| EPS (Diluted) | $0.52 |
| Shares Outstanding (Basic) | 276.20M |
| Shares Outstanding (Diluted) | 277.50M |
Key Highlights
- 1Total revenues increased by 20.4% to $927.6 million for the three months ended September 30, 2022, and by 15.5% to $2,672.0 million for the nine months ended September 30, 2022, driven by a 22.0% and 16.2% increase in core commissions and fees, respectively.
- 2Net income for the third quarter of 2022 rose by 10.0% to $161.1 million ($0.57 per diluted share), and for the nine months ended September 30, 2022, increased by 8.5% to $526.6 million ($1.85 per diluted share).
- 3The company completed 21 acquisitions during the first nine months of 2022 for a total cash consideration of $2,504.7 million, significantly expanding its operations and market reach.
- 4Employee compensation and benefits expense increased by 19.1% for the quarter and 9.9% year-to-date, largely due to the integration of acquired businesses and salary inflation, but as a percentage of revenue, it remained relatively stable or decreased.
- 5Interest expense saw a substantial increase of 156.2% for the quarter and 96.3% year-to-date, driven by higher average debt balances from recent financing activities to support acquisitions.
- 6Total assets grew significantly by 41.8% to $13,658.3 million as of September 30, 2022, primarily due to the substantial goodwill and intangible assets arising from acquisitions.
- 7The company ended the period with a strong liquidity position, evidenced by $579.5 million in cash and cash equivalents and access to a $650.0 million revolving credit facility.