AI Takeaway
BRO (Brown & Brown) delivered strong Q1 FY2026 results with revenue surging 35.4% YoY to $1.90B, driven by what appears to be significant acquisition activity, while net income rose 28.7% to $426M and long-term debt more than doubled to $7.82B.
Revenue
$1.9B
++35.40% YoY
EPS (Basic)
$1.27
++9.48% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue grew 35.4% YoY from $1.40B to $1.90B in Q1 FY2026, a substantial acceleration that, combined with total assets jumping 77.2% to $29.70B, strongly suggests significant acquisition activity contributed to top-line growth alongside organic performance.
Source: Source: 10-Q Income Statement & Balance Sheet
Net income increased 28.7% YoY to $426M, with net margin of approximately 22.4%, slightly below the implied prior-year margin of ~23.6%, indicating modest margin compression despite strong absolute profit growth.
Source: Source: 10-Q Income Statement
Long-term debt more than doubled, rising 105.5% YoY from $3.81B to $7.82B, while total assets grew 77.2% to $29.70B, reflecting substantial capital deployment — likely for acquisitions — that materially changed the company's leverage profile.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlockLong-term debt surged 105.5% YoY to $7.82B, significantly increasing BRO's financial leverage. Higher debt service obligations could constrain future financial flexibility and amplify earnings sensitivity to interest rate movements or revenue shortfalls.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlockReported EPS of $1.39 versus the $1.38 analyst consensus — a +0.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.9B | $1.4B | +35.40% |
Net Income | $426M | $331M | +28.70% |
EPS (Basic) | $1.27 | $1.16 | +9.48% |
EPS (Diluted) | $1.06 | $1.15 | -7.83% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $29.7B | $16.76B | +77.21% |
Current Assets | $8.46B | $5.92B | +42.89% |
Current Liabilities | $8.32B | $4.93B | +68.68% |
Cash & Equivalents | $1B | $669M | +49.93% |
Long-Term Debt | $7.82B | $3.81B | +105.52% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $262M | $213M | +23.00% |
Investing Cash Flow | $-38M | $-79M | +51.90% |
Financing Cash Flow | $-354M | $-218M | -62.39% |
Dividends Paid | $57M | $43M | +32.56% |
Share Buybacks | $250M | $0 | — |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Margin | 22.4% | — | — |
ROA | 1.4% | — | — |
Current Ratio | $1.017 | — | — |
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BRO's revenue grew 35.4% YoY to $1.90B in Q1 FY2026, up from $1.40B in the prior-year period. The scale of growth, combined with total assets jumping 77.2% to $29.70B and long-term debt doubling to $7.82B, strongly suggests significant acquisition activity was a major contributor to the revenue increase.
The headline takeaways from BRO's Q1 FY2026 results are strong revenue growth of 35.4% to $1.90B and net income growth of 28.7% to $426M, alongside a major balance sheet transformation with total assets surging 77.2% to $29.70B. The company also returned capital to shareholders via $250M in buybacks and $57M in dividends, though long-term debt more than doubled to $7.82B, raising leverage concerns.
BRO's diluted EPS declined 7.8% YoY to $1.06 despite net income rising 28.7% to $426M because the diluted share count increased significantly — likely due to equity issued as part of acquisition financing. Basic EPS actually rose 9.5% to $1.27, confirming the gap is driven by dilution from newly issued shares rather than any deterioration in underlying profitability.
BRO's financial health shows a mixed picture: profitability is strong with a 22.4% net margin and $262M in operating cash flow, but leverage has increased substantially with long-term debt doubling to $7.82B. The current ratio of approximately 1.02x is tight, and the rapid balance sheet expansion to $29.70B in total assets reflects significant acquisition-related risk that investors should monitor.
Yes, BRO increased dividends paid by 32.6% YoY to $57M in Q1 FY2026, compared to $43M in the prior-year period. Additionally, the company initiated $250M in share buybacks during the quarter, a program that did not exist in Q1 of the prior year, signaling management's confidence in the company's cash generation capacity.