A month has gone by since the last earnings report for Brown & Brown (BRO). Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Brown & Brown due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Brown & Brown Q3 Earnings & Revenues Beat Estimates, Dividend Raised
Brown & Brown, Inc.’s third-quarter 2025 adjusted earnings of $1.05 per share beat the Zacks Consensus Estimate by 16.6%. The bottom line increased 15.4% year over year. The quarterly results reflected increased organic revenues, higher commission and fees, improved investment income and other income, and expanded EBITDAC margin, offset by higher expenses.
BRO’s Q3 Details
Total revenues of $1.6 billion beat the Zacks Consensus Estimate by 6.6%. The top line improved 35.4% year over year. The upside can be primarily attributed to commission and fees, which grew 34.2% year over year to $1.5 billion, as well as higher investment and other income. Our estimate for commission and fees growth was 21.9%. The Zacks Consensus Estimate is pegged at $1.4 billion.
Organic revenues improved 3.5% to $1.2 billion in the quarter under review.
Investment and other income increased 80.6% year over year to $56 million. Our estimate was $36.4 million.
Adjusted EBITDAC was $587 million, up 41.8% year over year. EBITDAC margin expanded 170 basis points (bps) year over year to 36.6%. Our estimate for adjusted EBITDAC was $483.7 million.
Total expenses increased 49% to $1.3 billion due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation, mark-to-market of escrow liability, and interest. Our estimate was $1.2 billion.
Financial Update of BRO
Brown & Brown exited the third quarter with cash and cash equivalents of $1.2 billion, which increased 76.2% from the 2024-end level. Long-term debt was $7.6 billion as of Sept. 30, 2025, more than double from the 2024-end level.
Net cash provided by operating activities in the first nine months of 2025 was $1 billion, up 23.7% year over year.
Capital Deployment
The board of directors declared a 10% increase to its quarterly dividend to 16.5 cents per share. The dividend will be paid out on Nov. 12, 2025, to shareholders of record at the close of business on Nov. 5, 2025. The dividend hike marks Brown & Brown’s 32nd consecutive annual dividend increase. The board has also authorized the purchase of up to an additional $1.25 billion of shares. With this authorization, Brown & Brown will have outstanding approval to purchase up to approximately $1.5 billion of BRO's outstanding common stock.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Brown & Brown has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Brown & Brown has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
