A month has gone by since the last earnings report for Brown & Brown (BRO). Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Brown & Brown due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Brown & Brown, Inc. before we dive into how investors and analysts have reacted as of late.
Brown & Brown Q4 Earnings Top Estimates on Strong Investment Income
Brown & Brown, Inc.’s fourth-quarter 2025 adjusted earnings of 93 cents per share beat the Zacks Consensus Estimate by 2.1%. The bottom line increased 8.1% year over year. The quarterly results reflected higher commission and fees, improved investment income, and higher adjusted EBITDAC, offset by higher expenses and lower organic revenues.
BRO’s Q4 Details
Total revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.1%. The top line improved 35.7% year over year. The upside can be primarily attributed to commission and fees, which grew 36% year over year to $1.6 billion and improved investment and other income. The Zacks Consensus Estimate for commission and fees was pegged at $1.6 billion. Organic revenues declined 2.8% to $1 billion in the quarter under review.
Investment income and other income increased 17.3% year over year to $27 million. Adjusted EBITDAC was $529 million, up 35.6% year over year. EBITDAC margin remained unchanged year over year to 32.9%. Total expenses increased 41.4% to $1.29 billion due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest.
Full-Year Highlights
Adjusted earnings of $4.26 per share missed the Zacks Consensus Estimate by 0.2%. The bottom line increased 10.9% year over year. Total revenues of $5.9 billion missed the Zacks Consensus Estimate by 0.6%. The top line improved 22.8% year over year. Organic revenues increased 2.8%. Adjusted EBITDAC increased 25.6% to $2.1 billion, while adjusted EBITDAC margin expanded 70 bps to 35.9%.
Financial Update of BRO
Brown & Brown exited 2025 with cash and cash equivalents of $1 billion, which increased 60% from the 2024-end level. Long-term debt was $6.8 billion as of Dec. 30, 2025, up 91.5% from the 2024-end level. Net cash provided by operating activities in 2025 was $1.4 billion, up 23.5% year over year.
Capital Deployment
The board of directors declared a quarterly cash dividend of 16.5 cents per share. The dividend will be paid out on Feb. 11, 2026, to shareholders of record at the close of business on Feb. 4, 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Brown & Brown has a subpar Growth Score of D, a score with the same score on the momentum front. Following the exact same course, the stock has a score 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. It's no surprise Brown & Brown has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Brown & Brown, Inc. (BRO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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