01—Abstract
Summary
Summary of the 8-K filed January 27, 2025. Cited figures are marked; the original filing is the authoritative source.
Brown & Brown reported fourth-quarter 2024 results that were strong on the operating metrics it emphasizes.
Total revenues rose 15.4% to $1.184 billiona and Organic Revenue grew 13.8%. Adjusted EBITDAC margin expanded to 32.9% from 31.0%, and Diluted Net Income Per Share - Adjusted rose 24.6% to $0.86. GAAP results declined sharply because Q4 2023 included a $134.6 million gain on the disposal of third-party claims administration and adjusting businesses.
As a result, GAAP income before income taxes fell 22.8% to $275 millionb, net income attributable to the Company fell 21.9% to $210 million, and diluted EPS fell 22.3% to $0.73. Investors should read the year-over-year GAAP declines as largely a comparison effect rather than operating deterioration. For full-year 2024, total revenues grew 12.9% to $4.8 billion, Organic Revenue grew 10.4% to $4.39 billion, and net income attributable to the Company rose 14.0% to $993 million.
Diluted EPS was $3.46c (up 13.4%) and Diluted EPS - Adjusted was $3.84 (up 18.2%). Adjusted EBITDAC margin improved to 35.2% from 33.9%. Operating cash flow reached $1.17 billion, up from $1.01 billion, while the company spent $890 million on acquisitions.
The balance sheet grew substantially, with goodwill rising to $7.97 billion and total assets to $17.6 billiond. Reinsurance recoverables and loss reserves both increased sharply, from about $125 million to $1.53 billion and from $131 million to $1.54 billion, respectively. The filing does not explain the driver of that change, so investors should review it in the full annual report.
The figures are unaudited and preliminary. The forward-looking statements explicitly note that final fourth-quarter and full-year 2024 results could differ from the numbers in this release.
The company also changed its non-GAAP definitions effective January 1, 2024: it stopped excluding foreign currency translation and began excluding amortization from Diluted EPS - Adjusted. Prior periods were recast, but investors comparing against older company materials should account for these changes.
02—Key points
Key Highlights
- Q4 2024 total revenues rose 15.4% to $1.184 billion, with Organic Revenue growth of 13.8% and commissions and fees up 15.4%.
- GAAP Q4 results declined because Q4 2023 included a $134.6 million disposal gain. Income before taxes fell 22.8% to $275 million and diluted EPS fell 22.3% to $0.73.
- Adjusted metrics improved: Q4 EBITDAC - Adjusted rose 22.6% to $390 million (margin 32.9% vs. 31.0%), and Diluted EPS - Adjusted rose 24.6% to $0.86.
- Full-year 2024 revenue reached $4.8 billion (up 12.9%), with Organic Revenue up 10.4% to $4.39 billion, which CEO J. Powell Brown called a highlight of the year.
- Full-year diluted EPS was $3.46 (up 13.4%) and Diluted EPS - Adjusted was $3.84 (up 18.2%). Adjusted EBITDAC margin expanded to 35.2% from 33.9%.
- Cash generation was solid: operating cash flow was $1.17 billion (vs. $1.01 billion), and the company deployed $890 million on acquisitions and paid $154 million in dividends.
- Balance sheet changes to monitor: reinsurance recoverables and loss reserves rose to about $1.5 billion each from roughly $130 million, and goodwill rose to $7.97 billion. Results are unaudited and could change in the final filing.
03—Questions
Frequently Asked Questions
Why did GAAP net income and EPS decline in Q4 2024 if revenue grew 15%?
Q4 2023 included a $134.6 million gain on the sale of certain third-party claims administration and adjusting businesses, which boosted that prior-year period. Q4 2024 had only a $1 million gain. Excluding these items, operating performance improved: Adjusted EBITDAC rose 22.6% and Diluted EPS - Adjusted rose 24.6%.
What is Organic Revenue, and how did it perform?
Organic Revenue is core commissions and fees (excluding profit-sharing contingent commissions) after removing revenue from newly acquired operations in their first 12 months, divested businesses, and foreign currency translation. It grew 13.8% in Q4 2024 to $1.078 billion and 10.4% for the full year to $4.393 billion, a key measure of underlying growth.
Is this an audited or final result, and could it change?
No. The press release states the figures are unaudited. The forward-looking statements say the company may finalize its fourth-quarter and full-year 2024 results differently from the preliminary numbers presented. Investors should check the company's subsequent annual report on Form 10-K for final figures.
What changed in how the company calculates non-GAAP earnings measures?
Effective January 1, 2024, Brown & Brown stopped excluding foreign currency translation from EBITDAC - Adjusted and Diluted EPS - Adjusted, arguing that its effects largely offset in revenue and expenses. It also began excluding amortization of intangible assets from Diluted EPS - Adjusted. Prior periods were recast on the same basis, so the comparisons shown are consistent, but they may not match figures from earlier company releases.
What is the outlook, and when is the earnings call?
The filing does not provide 2025 guidance. The company will hold a conference call on Tuesday, January 28, 2025, at 8:00 AM EST, with a slide presentation available on its Investor Relations website at bbinsurance.com. Management's commentary on 2025 expectations is likely to come on that call.
04—Continue