The Baldwin Insurance Group Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 28, 2024

There are 9 speakers on the call.

Operator

Greetings, and welcome to the BRP Group Inc. 4th Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

Operator

It is now my pleasure to introduce your host, Bonnie Bishop. Thank you. You may begin.

Speaker 1

Thank you, operator. Welcome to the BRP Group's 4th quarter 2023 earnings call. Today's call is being recorded. 4th quarter and full year financial results, supplemental information and Form 10 ks were issued earlier this afternoon and are available on the company's website at ir.baldwinriskpartners.com. Please note that remarks made today may include forward looking statements subject to various assumptions, risks and uncertainties.

Speaker 1

The company's actual results may differ materially from those contemplated by such statements. For a more detailed discussion, please refer to the note regarding forward looking statements in the company's earnings release and to our most recent Form 10 ks, both of which are available on the VRP website. During the call today, the company may also discuss certain non GAAP financial measures. For a more detailed discussion of these non GAAP financial measures and historical reconciliation to the most closely comparable GAAP measures, please refer to the company's earnings release and supplemental information, both of which have been posted on the company's website at ir.baldwinriskpartners.com. I will now turn the call over to Trevor Baldwin, Chief Executive Officer of VRP Group.

Speaker 2

Good afternoon and thank you for joining us to discuss our 4th quarter results reported earlier today. I'm joined this afternoon by Brad Hale, Chief Financial Officer and Bonnie Bishop, Executive Director of Investor Relations. For the Q4, the contributions from the significant as we generated organic growth of 15%, our 15th straight quarter of double digit organic growth as a public company. For the year, we achieved industry pacing organic growth of 19%, including double digit organic growth across all three of our segments grew adjusted EBITDA by $54,000,000 a 27% year over year increase and expanded our margin by approximately 50 basis points. As a result of the investments we've made over the past few years, our business remains well positioned to continue delivering double digit organic growth, ongoing margin expansion, rapid growth of free cash flow from operations and continued strengthening of our balance sheet.

Speaker 2

In IES, we generated organic growth of 9% in the 4th quarter, in line with expectations we previewed on our Q3 earnings call. As forecasted, while growth was robust in most areas of our IIS platform, we saw select weakness in profit sharing revenue and project based work in sectors such as construction, where increased client sensitivity to continued higher interest rates and insurance rate increases had an impact in Q4. Despite the headwinds in Q3 and Q4, IES organic growth for the full year was 12%, in line with our long term target of 10% to 15%. There will always be puts and takes to the underlying momentum of our in client industry sectors, but early signs are pointing to an ebbing of these negative impacts that persisted during the second half of twenty twenty three. Job starts in our construction practice are seeing a normalization as we start the year and our clients in general across the IS business are exhibiting resiliency consistent with the continued growth seen in the broader U.

Speaker 2

S. Economy. Our UCTS segment grew organic revenue 22% in the Q4 due to continued strength in our multifamily homeowners and commercial umbrella programs, which has persisted into the Q1. And the commercial property and high net worth homeowners products we launched in late 2023 continue to gain momentum. UCTS organic revenue growth for the year was 31%, thanks to broad based strength across our platform and due to the significant growth in our homeowners platform in 2023.

Speaker 2

Our MIS segment grew revenue 21% organically for the quarter and 23% for the year. Thanks to continued strength from Westwood and a growing contribution from our national mortgage and real estate operation. Additionally, investments in our sales and distribution capabilities at Westwood have led to 3 more top 35 builders signing with us in the last 6 months. We expect sustained strength in new business along with higher attachment rates and meaningful insurance rate to drive continued momentum for Westwood in 2024. As a part of our efforts to streamline operations, increase margin and focus on our core businesses, we have executed a definitive agreement for the sale of our wholesale brokerage platform Connected Risk Solutions to Amlands.

Speaker 2

We expect the transaction to close on March 1, generating cash proceeds of approximately 59,000,000 dollars In addition, this transaction is expected to be neutral to 2024 adjusted EPS and accretive to both 2024 organic growth and adjusted EBITDA margin. As the nation's largest independent wholesale broker, Amwinds has been one of our trusted and preferred trading partners for many years and they will be an outstanding home for Connected's clients and colleagues. Brad will cover the anticipated financial impact of this transaction in a few moments. As we move forward with our strategic roadmap, we are deepening our focus on efficiency and execution through our recent work to simplify and optimize our operating model and business operations. To that end, in January, we announced the promotions of Dan Galbraith, formerly Chief Operating Officer and Jim Roche, formerly Chief Insurance Innovation Officer to Co Presidents of BRP Group with shared firm wide responsibility for BRP's continued performance and operations.

Speaker 2

Dan will also serve as CEO of Retail Brokerage Operations, which includes the Insurance Advisory Solutions segment and the Medicare and Main Street Personal Insurance Businesses in the Main Street Insurance Solutions segment. Jim will also serve as CEO of the businesses in the Underwriting Capacity and Technology Solutions segment as well as of Westwood, which resides in the Main Street Insurance Solutions segment. Dan and Jim have delivered exceptional results and made significant contributions to BRP's growth and evolution since joining the firm. I'm excited for their contributions in these roles as they broaden their responsibilities to drive our continued success as we build the Transcendent broker of the future. In summary, we are proud of the strong results we delivered in 2023.

Speaker 2

We are executing daily on numerous strategies to drive continued industry leading organic growth, expanding margin and growth of our free cash flow, all while building on our unique culture and status as a destination for our industry's most talented professionals. I want to thank our nearly 4,000 colleagues for their unwavering dedication to all our stakeholders during a challenging year in the insurance marketplace. While growth across the economy still appears resilient, dislocation persists in large portions of the insurance marketplace, impacting many of our clients. I extend my gratitude to our clients for their continued trust in our ability help them navigate these conditions and deliver innovative and thoughtful solutions. With that, I will turn it over to Brad, who will detail our financial results.

Speaker 3

Thanks, Trevor, and good afternoon, everyone. For the Q4, we generated organic revenue growth 15% and total revenue of $285,000,000 For the full year, organic revenue growth was 19% and total revenue was $1,200,000,000 We generated organic growth in the quarter of 9% at IAS, 22% at UCTS and 21% at MIS. We recorded a GAAP net loss for the 4th quarter $62,500,000 or GAAP diluted loss per share of $0.56 GAAP net loss for the full year was $164,000,000 or $1.50 per fully diluted share. Adjusted net income for the 4th quarter which excludes share based compensation, amortization and other one time expenses was $16,200,000 or $0.14 per fully diluted share. For the full year adjusted net income was $131,100,000 or $1.12 per fully diluted share.

Speaker 3

A table reconciling GAAP net loss to adjusted net income can be found in our earnings release and our 10 ks filed with the SEC. Adjusted EBITDA for the 4th quarter rose 16 percent to $45,600,000 compared to $39,200,000 in the prior year period. Adjusted EBITDA margin was 16% for the quarter, flat versus the prior year period. Adjusted EBITDA for the full year grew 27% over the prior year to $250,000,000 Adjusted EBITDA margin was 21% for the full year and expansion of 50 basis points. Net cash provided by operating activities in our statement of cash flows was $44,600,000 for the full year 2023 compared to negative $2,500,000 in 2022.

Speaker 3

Free cash flow from operations was $60,600,000 for the full year, an increase of 6% from the prior year even in the face of a 68% or 42.7 $1,000,000 increase in cash paid for interest. For the Q4, free cash flow from operations was negative $15,400,000 compared to negative $2,000,000 in the prior year period. We incurred $15,000,000 of severance expense in the 4th quarter and took meaningful steps around selling and operating expense management to achieve the $10,000,000 of run rate savings for 2024 that we highlighted on the Q3 earnings call. We expect these expense management efforts, our continued growth of the business coupled with a decrease in one time integration costs and flattening interest expense to yield greater than a 100% expansion of free cash flow from operations in 2024. As a result of our strong organic growth and the absorption of prior year investments, our business is well positioned to accelerate the realization of significant operating leverage in 2024.

Speaker 3

As a reminder, we absorbed significant expense headwinds in Q1 and Q2 2023 from the roughly 1,000 net new colleagues that joined BRP in 2022. The absence of this headwind as well as the cost savings initiatives we executed in the Q4 to align the growth services support structure with our go to market approach and integrated platform will continue to have a positive impact on margin in 20 24 and beyond. In addition, we have completed a substantial portion of our partnership integrations as a result of which we anticipate meaningfully lower one time expenses in 2024, which should drive increased free cash flow conversion. In the 4th quarter, we paid $2,800,000 in earn outs and our remaining estimated undiscounted earn out obligations total approximately 309,000,000 dollars as of December 31, 2023. As discussed on the Q3 earnings call, several agreements pursuant to which we executed on partnerships contain provisions related to earn outs that permit the former selling shareholders to allocate portions of the earn out proceeds to partner colleagues who are not selling shareholders, but who meaningfully contributed to the partner firm's achievement of the earn out.

Speaker 3

When this determination is made, it results in compensation expense being recorded as an offset to the change in contingent consideration, which is net neutral to net income. As a result of this practice, we added back $8,000,000 of compensation expense in Q4 associated with colleague earn out pools and expect to add back approximately 7,000,000 in Q1 2024 for earn outs coming due. The vast majority of the earn outs will be paid by the end of the Q1 of 2025. Thereafter, we expect to generate significantly higher free cash flow. We expect our net leverage will continue to decline through the end of 2024 and our goal is to delever to approximately 4x or lower by the end of this year.

Speaker 3

This target includes 20.24 estimated earn out payments of approximately $135,000,000 of which roughly $80,000,000 will be paid in the Q1. As a reminder, last quarter we revised down our target net leverage range to 3 to 4 times from 3.5 to 4.5 times. Also a few incremental details with respect to our sale of Connected Risk Solutions, our wholesale brokerage business. Connected finished 2023 at approximately $34,000,000 of gross revenue $5,000,000 of adjusted EBITDA. As Trevor mentioned, we expect cash proceeds from the transaction to be approximately $59,000,000 We anticipate the transaction will be neutral to 2024 adjusted EPS and accretive to both 2024 organic growth and adjusted EBITDA margin.

Speaker 3

For the Q1 of 2024, we expect revenue of $370,000,000 to $380,000,000 and organic revenue growth at the high end of our long term range of 10% to 15%. We anticipate adjusted EBITDA between $95,000,000 to $100,000,000 and adjusted EPS of $0.51 to $0.55 per share. As we project 2024 results, I'd like to reiterate our guidance from the Q3 earnings call, but make an adjustment for the divestiture of Connected Risk Solutions. For the full year 2024, we expect revenue of 1,350,000,000 dollars to $1,400,000,000 which implies organic growth towards the upper end of our long term range of 10% to 15%. Adjusted EBITDA of $315,000,000 to $330,000,000 and expected free cash flow from operations of $165,000,000 to 190 $5,000,000 In closing, we are very pleased with our results for the Q4 and the full year of 2023, Are immensely proud of our colleagues for their grit in a year of continued difficulty in the insurance environment and grateful to our clients for their continued trust and confidence.

Speaker 3

We will now take questions. Operator?

Operator

Thank you. We will now be conducting a question and answer session. The first question we have is from Greg Peters of Raymond James. Please go ahead.

Speaker 4

Hey, good afternoon. This is Sid on for Greg.

Speaker 2

Hey, afternoon, Sid.

Speaker 4

Hey, I know you guys called out some headwinds in the IAS segment for the last couple of quarters. And just curious if your 2024 guidance assumes those headwinds persist or if you're expecting some improvements there?

Speaker 2

Yes. Hey, Sid. This is Trevor. So a few things. 1, specific to the 2024 guidance, it incorporates our expectation for a normalization of the impact of rate and exposure, which is where we see those headwinds show up relative to some of the project revenues mentioned earlier in my prepared remarks.

Speaker 2

I think to contextualize the underlying performance of the IS segment, it's important to run through a handful of stats. When we look at the impact of rate and exposure on our organic growth in the IS segment for the first half of twenty twenty three, it was a 6.6% tailwind. And when we look at the impact of rate and exposure on the IS segment in the second half of twenty twenty three, it was a negative 0.5% headwind. And in the 4th quarter specifically, it was a negative 2% headwind. And so if you look at the underlying organic growth and you normalize for the amount of transition we saw in impact from rate and exposure, the organic growth from the IS segment apples to apples would have been mid teens for the second half of the year and the fourth quarter.

Speaker 2

When you look at the underlying momentum that we're seeing in that segment, I would tell you that it's growing. We track a metric called sales velocity, which is how we measure new business revenue being generated or won from new clients as a measure of prior year commission and fee revenue. And for the full year of 2023, IES sales velocity was 17%. And more specifically, for the Q4, IES sales velocity was 21%, a notable uptick as we saw the growth and momentum in new client wins as a result of the investments we've made in talent and capabilities. And as that compares to industry average, there's a consulting firm in the industry, Reagan Consulting.

Speaker 2

They perform a quarterly study called the Growth and Profitability Study. For the full year 2023, the industry median sales velocity was 11.6% and to be in the 75th percentile, it was 15.7%. And so a long winded way of saying, we feel like momentum in the IS business continues to be very strong. We had some idiosyncratic drivers of rate and exposure compression in the back half of twenty twenty three tied to some specific dynamics with particular clients in client industry sectors. And we believe that's largely behind us and we've seen that through January with a return or more normalization of rate and exposure in that part of the business.

Speaker 4

Okay. Yes, thanks. I appreciate it. And then I was hoping maybe I know it was touched on the prepared remarks, but hoping you can discuss a little bit more in detail the drivers of the margin expansion embedded in your guidance. And I think last quarter, Trevor, you mentioned Juniper Re is expected to be negative adjusted EBITDA in 2024 and hoping maybe you could quantify that and confirm if it's still expected to be EPS accretive in 2025?

Speaker 2

Yes. So let me just take those kind of 1 by 1. From a margin accretion standpoint, it's driven by broad based discipline and operating effectiveness around payroll, operating expenses and travel and entertainment expense. But notably, it's driven by us kind of growing into and normalizing the investments that were very significant that we made in the talent in our business in 2021 2022. If you look at what the magnitude of that difference, when we started 2023, we had added 1,000 net colleagues to the business in 2020 2 and had over $40,000,000 of payroll that did not yet earn through our P and L that was going to be running through the 2023 P and L that we fully absorbed.

Speaker 2

When we look at the net hiring into the business in 2023, we net added just a hair over 40 colleagues into the business, while still adding over $187,000,000 of revenue on an organic basis. And that's not because we stopped investing in the client facing and talent side of the business, it's because we were able to rationalize our footprint and talent investments as we wrapped up the integration work across the vast majority of the partnerships we've completed over the past few years. Specific to Juniper, we're very pleased with the progress we're making there. Jeff has recruited in a fantastic team and we fully built out capabilities across reinsurance broking, actuarial services, cat modeling and operations. And we expect that business to begin contributing to revenues in the Q1.

Speaker 2

We do expect that business to have a net loss for the fiscal year 2024 and our base plan is that that business will be EBITDA and EPS positive in 2025. However, we continue to evaluate talent investments and opportunities. But in summary, I'd say we have a lot of trust and confidence in Jeff and the team that he's been able to assemble. And we're super excited for the contributions they're going to make both this year and beyond. Thanks, Ed.

Speaker 2

Next question from the next analyst, please.

Operator

The next question we have is from Charles Schenker of Bank of America. Please go ahead.

Speaker 5

Yes. Thank you for taking my question. Good afternoon, everybody. The higher end of 10% to 15% long term organic revenue guidance is very strong, but it's also lower than it's been in the past. Can you talk about some of the drivers of your outsized organic growth in retrospect?

Speaker 5

And what's changing about the outlook to the broader economy that makes you a little more conservative looking forward?

Speaker 2

Yes. Hey, Josh, this is Trevor. So as we've talked about in the past, we view there really to be 4 building blocks to organic growth. And it starts with how much of the prior year revenue did you retain? What's the impact from rate and exposure on either expansion or compression of that prior year revenue that renews?

Speaker 2

And then most importantly, how much new revenue do you win from new clients that you're bringing into the organization? And what's been consistent from us is that the preponderance of our organic growth is driven by our new business generation. Our retention tends to be in line to slightly better than industry average. The impact we have from rate and exposure actually tends to be a bit lower than the industry average. And our new business generation, our sales velocity tends to be significantly higher.

Speaker 2

As we think about those metrics, for 2024, we're not expecting any kind of material degradation. If anything, I'd say slight improvements in overall revenue retention and client retention. I would say we do anticipate an ebbing of kind of the impacts we've seen from rate overall in our businesses. And I'd say just in general coming off another year where we've had multiple segments with organic growth in excess of 20%, we're not going to plan for kind of hugely outlier performances like that. We expect really strong performance out of all three of our segments.

Speaker 2

We expect double digit organic growth out of all three of our segments. But I would say that there is some characteristic conservatism that we're just not going to forecast for 20 plus percent organic growth.

Speaker 5

That's understandable. And one other question, I was curious, what kind of success have you had onboarding other lines of business besides renters onto the MGA The Future platform?

Speaker 2

Josh, tremendous success. The MGA of the Future platform continues to be just a significant growth driver for us overall with organic growth for 2023 in excess of 30%. And while our renters platform, which is a mature and scaled business, continues to perform exceptionally well with growth in excess of 20%. And candidly, we're seeing growing momentum there as we head into 2024 with a number of new initiatives relative to expansions into Canada and a number of software providers we expect to bring online this year. I'd say a significant part of that growth has been driven by the new products that we've been able to develop and roll out.

Speaker 2

Homeowners and flood in particular have been a huge success generating over $360,000,000 of premium and over $65,000,000 of revenue for the MGA in 2023 alone. We now have over 12 unique products that we've built and launched off the MJ platform and an expectation that we'll launch another 4 to 5 this year. As we've talked about in the past, when we look at the lens through which we evaluate new product opportunities, that's where do we have unique and differentiated distribution? Is there an opportunity to build a product that brings kind of unique end client fit and utility? And importantly, can we see a path to scaling that product line up in excess of $100,000,000 over a reasonable timeframe?

Speaker 2

And so we could not be more excited about the momentum that we have and the success that we're seeing across the MGA.

Speaker 5

Thank you for the answers.

Operator

The next question we have is from Meyer Shields of KBW. Please go ahead.

Speaker 6

Thanks and good evening or afternoon everyone. Quick question to begin with. Is there any distinct seasonality in the revenues or earnings of the business being sold to Hamlet?

Speaker 3

No, not really, Meyer. It's relative they have some seasonality month to month, but if you look quarter to quarter, it's relatively flat.

Speaker 6

Okay, perfect. And I know that's obviously going to take care of the entire debt program, but are there specific plans for the proceeds?

Speaker 2

It just it provides continued and better financial flexibility, Meyer, and we'll continue to thoughtfully manage our balance sheet to optimize returns.

Speaker 7

Okay. And then one last one, if

Speaker 6

I can follow-up on Josh's question. It seems that there's increasing comfort with Florida's reforms with regard to people being more interested in maybe depopulating citizens or whatever. And I was hoping you could take us through what the implications of that are for Westwood for the MGA of the future?

Speaker 2

Yes. Those implications are all positive, Meyer. I mean, Westwood continues to perform exceptionally well with organic growth in excess of 20%. We added 3 new top 35 builders over the past few months as new distribution partners into the Westwood business. And as you know, a big volume of the new homes being built across the U.

Speaker 2

S. Are built in Florida. And so to the extent that more capacity opens up, that creates more optionality and puts us in a position to provide more and better choice to our ultimate clients. And so the opening up of the market will be a very good thing for us and should translate into our ability to kind of bring in further capacity into the MGA to continue to kind of meet the needs of our

Speaker 7

clients. Okay, fantastic. Thanks so much.

Speaker 2

Thanks, Meyer.

Operator

The next question we have is from Pablo Sounon of JPMorgan. Please go ahead.

Speaker 7

Hi, good evening. Just a question on margins. If you go by the guidance that you're giving, the implied EBITDA margin expansion is the largest on an annual basis would be the largest EBITDA expansion that you would have done on an annual basis, right, call it 300 points? It seems like you can explain 80 bps of that from the $10,000,000 cost saves. Was the remainder just be natural operating leverage?

Speaker 7

And is there reason to think that that kind of cadence continues beyond 24?

Speaker 2

Pablo, this is Trevor. I'd say the answer to your the question that you surmised is accurate and that margin accretion is coming from operating leverage. We're coming out of a couple of years in 2021 2022 where we invested significantly into the business. And as you know, roughly 80% of the expense base in this industry is payroll. And so we've done most of the hard work around that as a result of how we manage headcount in 2023 for 2024.

Speaker 2

We're not going to provide an outlook on what kind of margin accretion to expect in 2025 or beyond. But what I will reiterate as we consistent with what we've said in the past is the margin profile of this business is not any different than that of our peers. Result of the utilization of technology and proprietary systems that we have, the hard work that we've done over the past few years to fully integrate our platform, I would suggest that over time our margin profile will be superior to that of our peers. And as a result, we do expect margin accretion for the foreseeable future year in, year out. Some years that will be more than others.

Speaker 2

We'll continue to invest in the business and invest in talent in a thoughtful and meaningful way that enables us to continue to remain on the vanguard for our clients and continues to allow us to cultivate our status and reputation as a true destination for the most talented professionals in our industry. We're incredibly excited about how this business is positioned heading into 2024. And while 2023 was a fantastic year, it was also a year that had some challenges and required some tough decisions. And we've made those decisions and executed on those actions and positioned our business to really drive very strong and profitable growth in 2024 and beyond.

Speaker 7

Okay. Thank you.

Speaker 2

Thanks, Pablo.

Operator

The next question we have is from Elyse Greenspan of Wells Fargo. Please go ahead.

Speaker 8

Hi, thanks. Good evening. My first question, does your organic guidance for 2024, are you assuming double digit organic growth in all of your segments? And then within IS, I know you discussed earlier about some of what caused the slowdown in the second half of the year. Can you give us a sense of how that business is trending in the Q1, 2 months into the Q1 from an organic basis?

Speaker 2

Yes. Hey Elyse. So, 1, we are expecting double digit organic growth across all three of our segments in 2024. Relative to kind of early trends in the Q1 for the IS business, through January, we have seen a what I would call normalization of the impact of rate and exposure and continued strength in new business momentum as I shared on the momentum we saw in sales velocity in the 4th quarter.

Speaker 8

And then how can you just provide, I guess, some thoughts, I guess, for 2024 and 2025 as you guys think about a return to M and A? Obviously, interest rates have come down. Just give us an update on the pipeline and how you're thinking about return to M and A activity?

Speaker 2

Yes. So we continue to have active dialogues and traffic and the opportunities that exist across the industry. We believe that M and A will continue to be an important value creation lever for us. As evidenced, if you've seen our financial supplement that's posted to the IR portion of our website, you'll see that we added some new disclosure this quarter that details the success of our first large cohort of partnerships, the transactions we complete in 2020. And you'll see the significant multiple buy down that occurred as a result of both top and bottom line growth across that cohort.

Speaker 2

And so M and A, we do believe will be an ongoing and important part of our story. Consistent with our view last quarter, we don't expect any material M and A in 2024 as we focus primarily on delevering into our stated target leverage range of 3 to 4 times. And after we pay the last of the large earnouts in the Q1 of 2025, I think we would expect that M and A becomes a more prevalent part of our story again. But importantly will be more episodic in nature than it was in the 1st few years of our life as a public company. We're incredibly fortunate as a business to have a platform that knows how to grow organically double digits year in, year out throughout market and economic cycles.

Speaker 2

And that enables us to be very thoughtful about when and how to deploy capital for M and A. We don't need M and A to create value or to grow our business. As I articulated early, we grew organically our business by $190,000,000 of revenue this past year. And so when there's opportunities to align with high quality businesses that have terrific talent and bring us unique in client industry sector capabilities, expertise and risk competency centers of excellence, then those are opportunities we will pursue and execute on. But what you will not see us do is M and A just for the sake of driving growth or trying to create merger arbitrage.

Speaker 2

It's purely about creating value, enhancing capabilities and driving long term sustainability into our operating model.

Speaker 8

Thank you.

Speaker 2

Thank you, Elyse.

Operator

There are no further questions. Thank you. There are no further questions at this time. I would like to turn the floor back over to Trevor Baldwin for closing comments.

Speaker 2

I want to thank you all for joining us on the call this evening. In closing, I want to thank our colleagues for their hard work and dedication to our clients and each other. I also want to thank our clients for their continued trust and confidence. Thank you all very much and we look forward to speaking with you again next quarter.

Operator

This concludes today's conference. Thank you for joining us. You may now disconnect your lines.

Powered by Quartr

Key Takeaways

  • BRP Group delivered 15% organic growth in Q4 and 19% for full-year 2023, marking its 15th consecutive quarter of double-digit organic growth as a public company.
  • All three segments posted strong gains in Q4—IES grew 9%, UCTS 22%, and MIS 21%—with full-year organic increases of 12%, 31%, and 23% respectively, driven by broad-based strength and new product launches.
  • Adjusted EBITDA rose 27% to $250 million for the year, expanding margin by 50 basis points, while free cash flow improved to $60.6 million from operations, reflecting operating leverage and expense discipline.
  • BRP agreed to sell its Connected Risk Solutions wholesale brokerage for approximately $59 million in cash, a deal that is neutral to 2024 adjusted EPS and accretive to both organic growth and adjusted EBITDA margin.
  • For 2024, BRP expects revenue of $1.35–1.40 billion, organic growth at the high end of its 10–15% long-term range, adjusted EBITDA of $315–330 million, and free cash flow from operations of $165–190 million.
AI Generated. May Contain Errors.
Earnings Conference Call
The Baldwin Insurance Group Q4 2023
00:00 / 00:00