Brown & Brown filed its 10-Q with the SEC, and its figures are now in our data. Revenue over the twelve months to Q3 2027 was $6.9 billion, up 26.1% on the year before. That growth rate was down 8.1 percentage points on the rate a quarter earlier.
What stands out in the filings
Capital spending rose 42.6%, faster than operating cash flow’s 15.9%, leaving less of the generated cash over.
Profitability
The business is profitable, with a trailing net margin of 17.6%. Net income over the twelve months was $1.2 billion, up 21.9% on the year before.
Cash flow
Investment is rising faster than operating cash flow, squeezing what remains for shareholders. Operating cash flow over the twelve months was $1.6 billion, up 15.9% on the year before. Capital spending was $97.0 million, or 1.4% of revenue. Free cash flow, defined as operating cash flow less capital spending, was $1.5 billion, up 14.5% on the year before. This represented a free-cash-flow margin of 21.5%, down 2.2 percentage points from a year earlier.
Shares outstanding
The share count is rising, meaning each share claims a smaller slice of profit. The average diluted share count rose 12.3% over the year.
Against its own history
Set against the company’s own record, today’s free-cash-flow margin of 21.5% is higher than 23% of past quarterly readings, which have ranged from 16.4% to 29.3%. Today’s twelve-month revenue growth rate of 26.1% is higher than 97% of past readings (2.8% to 34.2%).
What it means for our valuation
These trends feed directly into what the shares are worth in our model. In that model, growth 5 percentage points lower would lower value by 26.1%, while 5 percentage points higher would raise it by 33.3%. A free-cash-flow margin 1 percentage point lower would reduce value by 4.2%.
What comes next
The next filing will show whether the trends above continue, slow or reverse.
