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October 29, 2025 • 4 min read
Today, we're diving into the latest quarterly report from Brown & Brown, Inc. (BRO), a leading insurance brokerage firm. For those unfamiliar, Brown & Brown acts as an intermediary, connecting a wide range of customers with insurance products and services. Their recent 10-Q filing for the third quarter of 2025 reveals a company in the midst of a significant expansion, posting impressive revenue growth fueled by major acquisitions, though not without some growing pains impacting the bottom line.
For the third quarter ending September 30, 2025, Brown & Brown reported total revenues of $1.61 billion, a substantial 35% increase from the $1.19 billion reported in the same period last year. However, this top-line surge didn't translate directly to higher profits, as net income saw a slight dip to $227 million from $234 million in Q3 2024.
To better understand how the company's revenue flows through its various costs to arrive at its net income, the following chart provides a visual breakdown of the quarterly results.
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In the chart, you'll notice a revenue category labeled "Unallocated." This $42 million figure represents revenue, primarily investment income, and corporate-related items that are not assigned to a specific business division.
Brown & Brown's operations are divided into two main reportable segments, each telling a different part of the company's story.
Retail Segment: This is the company's largest division, bringing in $883 million in revenue. It serves a broad clientele, including commercial businesses, public entities, and individual customers. Despite its size, it operates on a thinner margin, generating $164 million in income before taxes, which represents about 18.6% of its revenue.
Specialty Distribution Segment: This segment, which focuses on more complex and hard-to-place risks through wholesale brokerage and specialized programs, generated $681 million in revenue. It proved to be the more profitable of the two, with an income before taxes of $255 million, a strong margin of 37.4%.
The impressive performance of the Specialty Distribution segment highlights the value of its niche expertise and its crucial role in driving the company's overall profitability.
The headline story of the quarter is undoubtedly the impact of acquisitions, most notably the major purchase of Accession Risk Management Group, which closed in the third quarter. This move is the primary driver behind the surge in revenue.
However, growth of this scale comes with significant costs. Total expenses climbed to nearly $1.3 billion from $869 million a year ago. A few key expense lines tell the story:
These increased costs effectively absorbed the gains from the higher revenue, leading to the slight compression in net income.
Brown & Brown's third-quarter results paint a clear picture of a company executing an aggressive growth-by-acquisition strategy. While this is successfully scaling the business and expanding its market presence, it also brings integration challenges and financial pressures. The insurance brokerage industry is highly competitive, and consolidation is a common tactic for major players seeking to gain an edge.
Investors and market watchers will be keenly observing Brown & Brown in the coming quarters to see how effectively it integrates its newly acquired businesses and whether it can begin to leverage its larger scale to drive bottom-line profit growth alongside its impressive top-line expansion.
Last updated: October 29, 2025