The following is a summary of the Brown & Brown, Inc. (BRO) Q1 2024 Earnings Call Transcript:
Financial Performance:
Brown & Brown reported Q1 revenue exceeding $1.25 billion, a growth of 12.7% in total and 8.6% organically over the first quarter of 2023.
Their adjusted EBITDAC margin improved by 130 basis points to 37% and adjusted earnings per share grew by 18.8% to $1.14. The company completed six acquisitions with an estimated annual revenue of $16 million.
On the cash flow perspective, it is expected to have another strong year of cash generation and a conversion ratio of cash flow from operations to revenues in the range of 22% to 24%.
At the end of the quarter, the company had approximately $580 million of operating cash.
The company highly regards the performance of its programs and has seen considerable growth opportunities in this sector.
The decline in financial performance this year was mainly induced by incremental taxes.
Brown & Brown Inc. has experienced a decrease in its conversion ratio of cash flow from operations over the past 1.5-2 years, mainly due to higher interest expenses.
Business Progress:
Brown & Brown is expecting growth to continue this year, although it will likely moderate towards more normal levels over the coming quarters.
Based on the current view, there will be continued rate pressure for CAT property which is highly dependent on early storm activity this year.
The company is focused on delivering competitive programs for customers, positioning itself for another year of industry-leading financial results, and is building relationships with various companies for potential future acquisitions.
The company has experienced organic growth in its benefits business and is now capable of competing in any size account domestically.
Despite inventory levels in the dealer services segment not being back to pre-COVID levels, the company is steadily gaining more customers and feels positive about the outlook.
The company sees a lot of new business opportunities and is successful in capturing them, translating to an increase in their books.
Brown & Brown expects many acquisition opportunities in the coming years due to changes in distribution and the potential steps of firms backed by private equity. It had a strong quarter and feels positive about the second quarter.
More details: Brown & Brown IR
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