Release Date: July 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Brown & Brown Inc BRO reported a 30.4% increase in total revenues for the second quarter, reaching $1.7 billion.
- The company achieved a 4% growth in adjusted earnings per share, reaching $1.07.
- Brown & Brown Inc (BRO) continues to focus on strategic acquisitions, having acquired six small agencies during the quarter.
- The company is leveraging partnerships with McKinsey, Accenture, and Anthropic to enhance its AI capabilities, aiming to improve customer outcomes and operational efficiency.
- Strong cash flow generation was reported, with approximately $610 million generated from operations, marking a 13% increase compared to the first half of 2025.
Negative Points
- Organic revenue decreased by 70 basis points from the prior year, although it increased by 70 basis points when including organic contingents.
- The adjusted EBITDAC margin decreased by 100 basis points to 35.7%, primarily due to lower interest income.
- Specialty distribution segment experienced a negative organic revenue growth of 1.6% with contingents and 3.5% without, impacted by delayed new business revenue.
- The company faced challenges in the competitive insurance market, with continued pressure from declining CAT property rates.
- Litigation impacts associated with individuals leaving for a startup broker resulted in a revenue adjustment of $18 million for the quarter.
Q & A Highlights
Q: On the accession integration, revenues seemed light compared to expectations. Is there a timing issue with revenues, and how should we think about the margin bridge with accession's impact?
A: R. Andrew Watts, CFO, explained that revenues are relatively balanced across quarters, with July being significant for placements. The business runs around a 35% margin, aligning with expectations, and won't significantly impact Brown & Brown's overall margins.
Q: Can you provide an update on the hiring activity and its impact on organic growth for the back half of the year?
A: J. Powell Brown, CEO, emphasized that hiring talented people is a continuous strategy, not a new initiative. The focus remains on organic growth, and while they are committed to hiring, significant investments in new talent would be highlighted separately.
Q: How do you view the current competition in the ENS space and its impact on your program business?
A: J. Powell Brown acknowledged increased competition from admitted markets and programs in the ENS space. Despite this, they remain disciplined in underwriting and expect programs to grow organically by 2% to 4% in the second half of the year.
Q: Regarding the impact of technology and AI, how do you foresee these investments affecting margins and growth in the future?
A: J. Powell Brown stated that AI and technology investments are expected to drive incremental organic growth and margin expansion over time. The benefits of AI will be more evident in years three to five, with a focus on better customer outcomes and enabling teammates.
Q: Can you elaborate on the investments being made in Europe and their expected contribution to growth?
A: J. Powell Brown mentioned that investments in Europe focus on wholesale and programs businesses, hiring new talent with specialized capabilities to drive organic growth. They see ongoing opportunities in London for both wholesale and programs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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