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Investing.com -- Brown & Brown, Inc. (NYSE:BRO) reported second-quarter adjusted earnings that exceeded analyst expectations, but shares fell 2.6% as investors focused on declining income before taxes margins despite revenue growth.
The insurance brokerage firm posted adjusted earnings per share of $1.03 for the second quarter, beating the analyst estimate of $0.99. Revenue reached $1.29 billion, slightly above the consensus estimate of $1.28 billion and representing a 9.1% increase compared to the same period last year. Organic revenue growth was 3.6% YoY.
Despite the earnings beat, income before income taxes fell 10.1% to $311 million, with margins declining to 24.2% from 29.4% in the prior-year quarter. This margin compression appeared to be the primary concern for investors, outweighing the company’s revenue growth.
"We are pleased with the earnings for the quarter and have good momentum as we head into the second half of the year," said J. Powell Brown, president and chief executive officer of the company.
On a positive note, the company’s EBITDAC-Adjusted increased 12.1% to $471 million, with EBITDAC Margin-Adjusted improving to 36.7% from 35.7% in the same quarter last year.
For the first six months of 2025, Brown & Brown reported revenue of $2.7 billion, up 10.4% compared to the same period in 2024. Organic revenue growth for the half-year period was 5.1%.
The company’s adjusted earnings per share for the six-month period increased 12.1% to $2.32 compared to $2.07 in the first half of 2024.
Brown & Brown’s results come as the company prepares for its pending acquisition of RSC Topco, Inc., with approximately $13 million of interest income earned from proceeds of the company’s follow-on common stock offering and senior notes issuance in June 2025 positively impacting the quarter’s results.
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