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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