BRP Group, Inc. (BRP) reported Q3 2022 results, surpassing consensus estimates. BRP’s Q3 2022 adjusted Earnings Per Share (EPS) was $0.18 and revenue was $259.4 million, an increase of 91% year-over-year (YoY). Here are five things you should know about this call:
- BRP posted Q3 2022 organic growth of 28% vs. Q2 2022’s 24%, with double-digit organic growth across all sectors. The MainStreet segment reported organic growth of 23% in Q3 2022 vs. 33% in Q2 2022. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased 118% to $41.9 million while adjusted EBITDA margin was 16%, an increase from 14% in Q3 2021.
- The MGA of the Future segment’s organic revenue grew 80% YoY in Q3 2022, its best quarter ever, above Q2 2022’s 70% YoY. BRP noted that MGA’s pipeline of new distribution partners remains strong. CEO & Director Trevor L. Baldwin said, “Our home insurance product rollout continues to meaningfully impact our organic growth results, and we’re seeing solid results from our newer MGA partner firms that have started to roll into our organic growth numbers and will fully be in our results in the fourth quarter and over the course of 2023.”
- BRP sees their prudent investments into the business and the durability of their business model resulting in strong organic growth through the fourth quarter and into 2023. While BRP sees global economic conditions continuing to be a challenge, the company sees its business as very resilient and well positioned.
- Mergers & Acquisitions (M&A): Baldwin commented: “We’d also note that these expectations conservatively assume no acquired revenue in 2023. We will continue to engage with prospective partners. But given the combination of much higher cost of capital, which has not worked its way into pricing and return models industry-wide and still buoyant private market valuations, we are entering the year with measured expectations.”
- BRP provided a preliminary look at 2023 ahead of their Investor Day next week. The company sees 2023 organic growth at the high end of their 10%-15% range, revenue of $1.14-$1.17 billion and adjusted EBITDA of $250-$260 million. BRP expects to bring net leverage down near the high end of their 3.5x to 4.5x long-term range through organic growth and free cash flow generation.
To learn more visit – BRP Announces Third Quarter 2022 Results
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