The Investor
27 Oct 2026, 10:02
Brown & Brown Falls 2.2% Premarket as Weak Organic Growth and Margin Compression Offset Higher Revenue
Brown & Brown (NYSE: BRO) shares fell about 2.2% in premarket trading after the insurance broker reported higher third-quarter revenue and net income, but relatively weak organic growth and lower margins.
Third-quarter revenue increased 7.4% year over year to $1.7 billion, while net income attributable to the company rose 5.7% to $240 million. Adjusted diluted EPS increased 1.9% to $1.07, although reported diluted EPS declined 1.5% to $0.67.
The softer part of the quarter was underlying growth. Organic Revenue increased only 1.2%, while Organic Revenue with Contingents rose 1.5%. Management cited a challenging rate environment even as the company continued to add customers.
Profitability also weakened. Adjusted EBITDAC increased just 1.7% to $597 million, while the adjusted EBITDAC margin fell to 34.6% from 36.6% a year earlier. Pretax margin similarly declined to 18.6% from 19.4%.
For the first nine months of 2026, total revenue rose 23.4% to $5.3 billion, helped by acquisitions including Accession, but organic revenue growth was only 0.3%. Adjusted EPS for the period increased 5.7% to $3.52.
The 2.2% premarket decline appears to reflect investor concern over sluggish organic growth and margin compression, which outweighed the benefit of higher reported revenue and earnings.
Brown & Brown (NYSE: BRO) shares fell about 2.2% in premarket trading after the insurance broker reported higher third-quarter revenue and net income, but relatively weak organic growth and lower margins.
Third-quarter revenue increased 7.4% year over year to $1.7 billion, while net income attributable to the company rose 5.7% to $240 million. Adjusted diluted EPS increased 1.9% to $1.07, although reported diluted EPS declined 1.5% to $0.67.
The softer part of the quarter was underlying growth. Organic Revenue increased only 1.2%, while Organic Revenue with Contingents rose 1.5%. Management cited a challenging rate environment even as the company continued to add customers.
Profitability also weakened. Adjusted EBITDAC increased just 1.7% to $597 million, while the adjusted EBITDAC margin fell to 34.6% from 36.6% a year earlier. Pretax margin similarly declined to 18.6% from 19.4%.
For the first nine months of 2026, total revenue rose 23.4% to $5.3 billion, helped by acquisitions including Accession, but organic revenue growth was only 0.3%. Adjusted EPS for the period increased 5.7% to $3.52.
The 2.2% premarket decline appears to reflect investor concern over sluggish organic growth and margin compression, which outweighed the benefit of higher reported revenue and earnings.
