Why did revenue jump 35% if organic growth was flat?

The increase was almost entirely attributable to the acquisition of Accession, which contributed about $435 million of commissions and fees in the quarter. Organic Revenue, which excludes acquisitions, dispositions, currency effects, and litigation-related impacts, was unchanged at $1,348 million versus the prior year.

Why did GAAP diluted EPS decline while adjusted EPS increased?

GAAP diluted EPS fell to $1.06 from $1.15, mainly because of higher amortization of acquired intangibles ($116 million vs. $53 million), higher interest expense, and a larger share count after the Accession financing. Adjusted EPS excludes amortization, acquisition and integration costs, and earn-out and escrow mark-to-market effects, which is why it rose to $1.39.

Is the $64 million escrow mark-to-market gain a concern for earnings quality?

It is a non-cash item tied to changes in BRO's share price over the quarter, applied to shares held in escrow to secure indemnification obligations for Accession's run-off businesses. It inflated GAAP pre-tax income and EPS in Q1 2026, so investors should treat GAAP results with caution and focus on operating metrics such as Organic Revenue and EBITDAC - Adjusted margin.

How has the company's leverage changed after the Accession deal?

Total debt rose to roughly $7.8 billion at March 31, 2026, from about $7.6 billion at year-end, and interest expense more than doubled year over year to $99 million. Goodwill and amortizable intangibles now total about $19.9 billion, making the balance sheet significantly more acquisition-heavy.

Is the dividend and buyback program still supported by cash flow?

Operating cash flow was $262 million in the quarter, which covered $57 million of dividends, but the company also spent $250 million on share repurchases and $150 million on acquisition earn-out payments, funded partly by $225 million of revolver borrowings. Sustaining shareholder returns at this pace will depend on improving organic growth and cash conversion.

BRO 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 27, 2026. Cited figures are marked; the original filing is the authoritative source.

Brown & Brown (BRO) reported first quarter 2026 results that were headline-inflated by the Accession acquisition.

Total revenues rose 35.4% to $1.9 billion^a, but Organic Revenue was flat at 0.0%, and Organic Revenue with Contingents grew only 2.2%. The growth gap reflects the roughly $435 million of acquired commissions and fees, so the underlying organic business was essentially stagnant in the quarter. Management described the environment as "challenging," which investors will want to probe on the April 28 call.

Profitability is more mixed than the top line. GAAP diluted EPS fell 7.8% to $1.06^b, while Diluted EPS - Adjusted rose 7.8% to $1.39. Income before taxes increased 24.8% to $533 million, but its margin compressed to 28.0% from 30.4%, largely because interest expense more than doubled to $99 million and amortization nearly doubled to $116 million.

A $64 million^c non-cash mark-to-market gain on escrowed Accession shares flattered GAAP results, and EBITDAC - Adjusted margin improved only modestly to 38.5% from 38.1%. Balance sheet leverage increased materially. Goodwill and intangibles are now about $19.9 billion against $29.7 billion of total assets, and total debt rose to roughly $7.8 billion including $1.2 billion current.

The company repurchased $250 million^d of stock and paid $57 million in dividends in the quarter, while declaring a regular quarterly dividend of $0.165 per share payable May 20, 2026. Investors should watch free cash flow relative to the expanded debt load and the pace at which Accession's earnings translate into organic growth.

02—Key points

Key Highlights

Total revenues of $1,901 million, up 35.4% year over year, driven by the Accession acquisition (approximately $435 million of acquired commissions and fees).
Organic Revenue was flat (0.0%), and Organic Revenue with Contingents grew 2.2%, indicating weak underlying organic momentum.
GAAP diluted EPS fell 7.8% to $1.06, while Diluted EPS - Adjusted rose 7.8% to $1.39, a wide gap driven by amortization and acquisition costs.
Income before income taxes rose 24.8% to $533 million, but the margin declined to 28.0% from 30.4%, reflecting higher interest and amortization expense.
GAAP results include a $64 million non-cash mark-to-market gain on escrowed Accession shares, which is excluded from the adjusted metrics.
Interest expense rose to $99 million from $46 million, and total debt increased to roughly $7.8 billion, including $1.2 billion current.
The company repurchased $250 million of treasury stock and declared a quarterly dividend of $0.165 per share, payable May 20, 2026.

03—Questions

Frequently Asked Questions

Why did revenue jump 35% if organic growth was flat?
The increase was almost entirely attributable to the acquisition of Accession, which contributed about $435 million of commissions and fees in the quarter. Organic Revenue, which excludes acquisitions, dispositions, currency effects, and litigation-related impacts, was unchanged at $1,348 million versus the prior year.
Why did GAAP diluted EPS decline while adjusted EPS increased?
GAAP diluted EPS fell to $1.06 from $1.15, mainly because of higher amortization of acquired intangibles ($116 million vs. $53 million), higher interest expense, and a larger share count after the Accession financing. Adjusted EPS excludes amortization, acquisition and integration costs, and earn-out and escrow mark-to-market effects, which is why it rose to $1.39.
Is the $64 million escrow mark-to-market gain a concern for earnings quality?
It is a non-cash item tied to changes in BRO's share price over the quarter, applied to shares held in escrow to secure indemnification obligations for Accession's run-off businesses. It inflated GAAP pre-tax income and EPS in Q1 2026, so investors should treat GAAP results with caution and focus on operating metrics such as Organic Revenue and EBITDAC - Adjusted margin.
How has the company's leverage changed after the Accession deal?
Total debt rose to roughly $7.8 billion at March 31, 2026, from about $7.6 billion at year-end, and interest expense more than doubled year over year to $99 million. Goodwill and amortizable intangibles now total about $19.9 billion, making the balance sheet significantly more acquisition-heavy.
Is the dividend and buyback program still supported by cash flow?
Operating cash flow was $262 million in the quarter, which covered $57 million of dividends, but the company also spent $250 million on share repurchases and $150 million on acquisition earn-out payments, funded partly by $225 million of revolver borrowings. Sustaining shareholder returns at this pace will depend on improving organic growth and cash conversion.

04—Continue

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