Brown & Brown (BRO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues reached $1.2 billion, up 11% year-over-year, with 9.5% organic growth and strong performance across all segments.

• Net income attributable to the company rose 33% to $234 million, with diluted EPS up 30.6% to $0.81 and adjusted EPS up 12.3% to $0.91.

• Completed four acquisitions in Q3, contributing $7.5–8 million in annual revenue, and 22 acquisitions year-to-date.

• Maintained strong momentum and performance across all business segments, with Programs and Wholesale Brokerage leading growth.

• Board approved a 15% increase in projected dividend payments for Q4 2024, marking the 31st consecutive annual increase.

Financial highlights

• Adjusted EBITDAC for Q3 was $414 million, up 11.9%, with margin at 34.9% (up 30bps year-over-year).

• Income before income taxes rose 31% to $317 million, with margin increasing to 26.7%.

• Core commissions and fees grew 10.4% year-over-year; investment income surged 82.4% to $31 million.

• Dividends declared per share increased 13% year-over-year to $0.13.

• Weighted average diluted shares outstanding for Q3 was 284 million.

Outlook and guidance

• Full-year EBITDA margin expected to be up at least 100 basis points for 2024 versus 2023.

• Anticipate admitted lines rates in Q4 and early 2025 to be similar or slightly down versus Q3 2024; CAT property rates could be flat to down 10%.

• Management expects continued revenue growth from new business, renewals, and acquisitions, supported by strong liquidity and access to capital.

• Free cash flow conversion ratio for 2024 raised due to deferred tax payments; 2025 conversion expected to be lower.

• Pending acquisition of Quintes Holding B.V. expected to close in Q4 2024, funded by a $350 million draw on the revolving credit facility.