10-QPeriod: Q2 FY2024

BROWN & BROWN, INC. Quarterly Report for Q2 Ended Jun 30, 2024

Filed July 22, 2024For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) reported strong financial performance for the second quarter and the first half of 2024, demonstrating robust revenue growth and profitability. Total revenues increased by 12.5% in the quarter and 12.6% for the first half, primarily driven by a significant rise in commissions and fees. This growth was fueled by a combination of net new business, contributions from recent acquisitions, and favorable investment income. Net income attributable to the Company saw a substantial increase of 35.3% for the quarter and 29.1% for the first half, reaching $257 million and $550 million, respectively. This strong earnings performance, coupled with a solid organic revenue growth rate of 10.0% in the quarter, underscores the company's effective execution of its growth strategy. The company also maintained a healthy liquidity position and continued to execute its capital allocation strategy through dividends and share repurchases.

Financial Highlights

51 data points
Beta

Revenue

$1.05B

Net Income

$190.00M

18.1% Net Margin

EPS (Diluted)

$0.67

Total Assets

$14.07B

Cash & Equivalents

$628.00M

Free Cash Flow

$314.70M

Financial Statements
Beta
Revenue$1.05B
Operating Expenses$793.00M
Interest Expense$48.00M
Net Income$190.00M
EPS (Basic)$0.67
EPS (Diluted)$0.67
Shares Outstanding (Basic)279.00M
Shares Outstanding (Diluted)280.00M

Key Highlights

  • 1Total revenues grew by 12.5% to $1,178 million for the three months ended June 30, 2024, and by 12.6% to $2,435 million for the six months ended June 30, 2024.
  • 2Net income attributable to the Company increased by 35.3% to $257 million for the three months ended June 30, 2024, and by 29.1% to $550 million for the six months ended June 30, 2024.
  • 3Organic Revenue growth rate was strong at 10.0% for the quarter and 9.3% for the first half of 2024, indicating solid performance from existing operations.
  • 4Diluted earnings per share increased to $0.90 for the quarter and $1.92 for the first half, up from $0.67 and $1.50, respectively, in the prior year periods.
  • 5The company reported a gain on disposal of $31 million in the second quarter related to the sale of certain businesses.
  • 6Cash and cash equivalents, inclusive of fiduciary cash, increased significantly to $2,974 million as of June 30, 2024, up from $2,263 million in the prior year.
  • 7The company issued $600 million of 5.650% Senior Notes due 2034 and intends to use the proceeds to redeem existing notes and for general corporate purposes.

Frequently Asked Questions

The primary driver of revenue growth was a significant increase in commissions and fees, which rose by 11.5% for the quarter and 11.5% for the first half of 2024. This growth was supported by net new business, contributions from recent acquisitions, and strong organic revenue growth.

Profitability showed a substantial improvement. Net income attributable to the Company increased by 35.3% to $257 million for the quarter and by 29.1% to $550 million for the first half of 2024 compared to the same periods in the prior year. Diluted EPS also saw a significant increase.

Acquisitions remain a key part of Brown & Brown's strategy. In the first six months of 2024, the company completed 18 acquisitions. These acquisitions contributed positively to revenue growth, with $44 million and $85 million in acquisitions adding to revenues in the second quarter and first half, respectively.

Brown & Brown maintains a conservative balance sheet. Total debt increased slightly due to the issuance of new senior notes, but the company also reported a significant increase in cash and cash equivalents, reaching $2,974 million inclusive of fiduciary cash. They have substantial available borrowing capacity under their credit facilities and believe current resources are sufficient for their liquidity needs.