On November 7, 2023, BRP Group Inc (BRP, Financial), a leading independent insurance distribution firm, disclosed its financial results for the third quarter ending September 30, 2023. The company reported a significant increase in revenue, achieving an 18% year-over-year growth, totaling $306.3 million. This performance was bolstered by an impressive 19% organic revenue growth.
Financial Highlights and Performance
Despite the revenue upswing, BRP Group faced a GAAP net loss of $32.0 million, which translates to a GAAP diluted loss per share of $0.29. However, the Adjusted Net Income, a non-GAAP measure, was $33.8 million, or $0.29 per fully diluted share, indicating the company's robust core financial health. Adjusted EBITDA saw a 53% year-over-year increase to $64.0 million, with the Adjusted EBITDA Margin expanding by 480 basis points to 21% compared to 16% in the same quarter of the previous year.
"The robust underlying health, momentum and operating leverage in our business was evident in this quarter’s results, as we generated organic growth of 19% and approximately 480 basis points of margin accretion versus the third quarter of 2022, on the back of continued execution, growing contribution from prior investments and ongoing efforts to drive greater free cash flow from the business," said Trevor Baldwin, Chief Executive Officer of BRP Group.
Liquidity and Capital Resources
As of September 30, 2023, BRP Group maintained a solid liquidity position with $79.0 million in cash and cash equivalents and an additional $276.0 million of borrowing capacity under its revolving credit facility.
Year-to-Date Financials
For the nine months ended September 30, 2023, BRP Group's revenue increased by 27% year-over-year to $933.9 million, with organic revenue growth of 20%. The GAAP net loss for the period was $101.5 million, with a diluted loss per share of $0.93. Adjusted Net Income for the nine months was significantly higher at $114.9 million, or $0.98 per fully diluted share. Adjusted EBITDA for the same period grew by 30% year-over-year to $204.6 million, with an Adjusted EBITDA Margin of 22%.
Analysis of Financial Statements
The balance sheet as of September 30, 2023, shows total assets of $3.42 billion, with liabilities at $2.35 billion. The company's equity stood at $1.07 billion, indicating a stable financial structure. The cash flow statement highlights a net cash provided by operating activities of $22.8 million for the nine months ended September 30, 2023, despite the net loss reported.
Outlook and Positioning
BRP Group's CEO expressed confidence in the company's positioning for sustainable double-digit top-line organic growth and consistent margin accretion. The focus remains on creating long-term value for shareholders, with a strategic goal of rapidly reducing leverage, which now sits at 4.8x.
BRP Group will host a webcast and conference call to discuss the third quarter 2023 results, providing an opportunity for investors to gain deeper insights into the company's performance and strategies moving forward.
For detailed financial tables and a reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures, please refer to the full earnings release.
BRP Group Inc (BRP, Financial) continues to demonstrate its ability to grow and manage its operations effectively, as reflected in the strong revenue and Adjusted EBITDA growth. The company's strategic initiatives and operational leverage are key drivers of its financial performance, despite the GAAP net loss reported for the quarter.
Investors and stakeholders are encouraged to review the full details of BRP Group's financial results and to participate in the upcoming webcast for a comprehensive understanding of the company's trajectory and future prospects.
Explore the complete 8-K earnings release (here) from BRP Group Inc for further details.
