Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the BRP Group, Inc. Fourth Quarter 2020 Earnings Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]

pleasure Investor your Relations. my Executive Bonnie now of Director is to host, introduce Bishop, It Thank you.

begin. may You

Bonnie Bishop

Thank you, are Fourth operator. XXXX Welcome earlier ir.baldwinriskpartners.com. information to the BRP were XX-K the Today's year results, issued is Company's and full at Form Earnings afternoon Group's call being on and recorded. and quarter this financial supplemental available Call. Fourth Quarter website

may made to The that remarks today materially results various Company's risks, note forward-looking subject may contemplated Please statements those uncertainties. assumptions, and actual statements. by differ from include such

note a forward-looking release discussion, For Form are detailed please more our the to in refer XX-K, earnings to Company's on the of which website. available regarding the both XXXX statements BRP and

discuss certain non-GAAP call the During financial also today, the may measures. Company

these information, detailed the financial have of to measures, more historical reconciliation comparable of supplemental most to been please ir.baldwinriskpartners.com. on refer Company's a and and both discussion the release website measures closely at GAAP the which posted earnings non-GAAP Company's For

I Chief BRP Executive to Group. will Officer Trevor Baldwin, call turn of now over the

Trevor Baldwin

financial by you who Brad, good will the Chris with thank quarter take followed everyone, will few and questions. earnings us then business and start the joining from quarter Bonnie, and and remarks our Thanks, call. on address afternoon, I will highlights year, for a fourth Brad, for and I

BRP, for solutions of groups, showcasing achieved place our since enterprise. growth deliver all record transformative growth of growth And our for in record and new and across operating across across we clients year pacing a our growth our revenue double-digit total We organic value relationships IPO. BRP a the of our advice, a execution was achieved business. the year of XX%, XXXX XX%, organic broad-based industry

income Adjusted past over the technology continue particularly at XXXX few XXXX results year. the for confluence XX% XX%, investments with our the EBITDA and made net the of pleased meaningful $X.XX we business. to I adjusted absorb am grew share, talent was per these up and in as years in

believe organic to drive continue our accelerating investments outsized business. will they efficiency season, continued these and As I and productivity across growth

we seeing underlying Given of full encouraged all and the segments. our are we're positive momentum by business delivered fourth financial quarter across the year, during the performance we

In new Middle Market, sales result wins national execution go-to-market a and in through product year our as across footprint. and adviser expertise client accelerated investments industry and capabilities the of talent, our

we of we on driven launching Our and MGA of strategy. of delivered XX% continue national growth Future expansion continued share and the outsized early as saw the take organic building fourth in platform our MainStreet, success In products. execute market the again quarter growth to new by

the first growth fourth XX% in we effective year. XXXX homeowners and in of In the the be solid U.S. season embedded housing XX% recognized of quarter the revenue fourth quarter focused annual of market new a organic during quarter not to full results, amid is productivity. challenges year, of increased selling showing grew homebuilder will the our Westwood, Medicare, exceptional durability business in date results yet during Though period channel our a agent in the over result included count as the accelerating enrollment and but largely due saw for the policies. in

dreams. and up our manage solutions colleagues clients, and and advice for We amidst exceptional result an our was navigate XXXX deliver aspirations uncertainty showed value to them enabling summary, to the broadly. our simplify business when the continue stakeholders In year complex, mattered continue more risk it volatility, direct a and pursuing for of personal help business, that clients their providing

XXXX a our of public full IPO in of to company record In marks year third BRP, October close since a XXXX. for our year addition recognizing the as

our of goal the a million revenue a of over a scale business from towards transformed have $XXX today, in we brokerage top advisory regional to We global revenue insurance platform. XX our business and of year time, to approximately our and evolving the transformed national $XXX IPO to that from building During of our business million accelerate organization. continued of

to the from cultivate of and point the advisory enhance critical exceptional future. We attracted businesses nearly leading our firm approximately culture, of talent have X,XXX and as distinctive share served our alignment grown at while all that with partnering colleagues of for insurance continuing IPO, distribution XXX has vision our building to the a time and which

and compound support our During per to we period growth since time, of a rapid share have and and growth innovation, delivered investments earnings XX%. rate external our annual this IPO, a internal of intense adjusted

the of for many in years all to assembled, these of the of to we've very accomplished time we've the what put in magnitude position team proud collectively reasons, we've our For thrive I a and short of business immensely amount am come.

the As forward elevated, insurance marketplace to our that clients, to business I for results remain large our partners incredibly of enabled XXXX, our and investors. their that confident I colleagues, have for economic be well look colleagues to I thank want the grit, positioned in to delivered to we trading XXXX. communities, am stakeholders deliver parts continues stress while insurance tenacity and during our valued company and commitment uncertainty

continue best the reason be years ahead. that are all You to BRP's

review hand of more detailed the financial to call With that, for results. will a I our Brad

Brad Hale

everyone. and afternoon, Trevor, Thanks, good

delivered fourth And organic growth $XXX in generated the of XX% generated growth the over We fourth XX% we year, of to the for million. $XXX quarter XX%. we revenue million. quarter, revenue For full growth of revenue to

full generation was our which, reducing of organic rate This achieved level X.Xx path long-term of X.X full helps and free as to since cash the mentioned, the growth EBITDA growth, the growth net growth range. along our high with was For flow along to IPO. progress year, organic revenue our XX%, highest leverage end year organic us revenue of Trevor

income or full diluted a share. GAAP $X.XX share. recorded loss fully diluted quarter which share. net of of onetime per $X.XX the net for XXXX, other a per million $XX.X for or $X.XX net Adjusted share-based fully the quarter $XX.X GAAP fully We excludes amortization, per compensation, loss fourth loss fourth $XX.X was for million and the was expenses, million diluted of year or

over the income million adjusted diluted adjusted or with year filed fourth SEC. million. EBITDA to compared XX% year, $XX.X to EBITDA income for EBITDA prior be GAAP $XXX period. earnings prior to fully Adjusted reconciling to fourth year to year Adjusted Adjusted Adjusted compared can $XX.X the net $XXX EBITDA the full $X.XX rose net our per loss A quarter of was XX% full million year for share. in margin For the XX-K found the million full for XXXX was quarter prior the in margin net and table period. XX% was the in release XX% XX% year. our the the for grew

I'm milestone. and our our we've as public previously at also environment. tireless today. a three infrastructure pleased infrastructure overall reconciliations identified IT our important accounting announce IT, teams is and of as company to their three-year reaching been This a control journey grit to to of from for in like and evolved our weaknesses I'd have company a largely internal has commitment to IPO public related life that audit this and accounting, accomplishment thank a to company the we the full material completed sustainable a remediation the significant private time

reportable going have in Insurance change Beginning XXXX, January our groups operating to our which segments groups, into affect like and I'd Solutions. will discuss forward. Now current group, in Medicare combined a MainStreet single a MainStreet operating operating our we renamed

Insurance Advisory operating we group, have Market Capacity our underwriting Group Operating Solutions Solutions. Middle renamed addition, Technology In Specialty our and and

equate groups, Corresponding XXXX are information financial segments, to with we recast and this be for operating XX-Q align three first our We reviewing will running beginning to prior with periods results. report change. reflect which operationally reportable business to how internal the will quarter

earnings for Regarding expectations I'd from call. year, communication the our to reiterate like quarter the third

revenue For our high for year at the expect year-to-date, to XX% an on business growth includes the in revenue based XXXX, full seeing the organic are we our XX% QX. across mid-teens we range, of performance which, expectation end organic growth

year full billion $X.XX anticipate million. $X.XX of $XXX $XXX billion, to to for and we million EBITDA adjusted Additionally, revenue of the

For of and million $XX EBITDA the per share. we of to to be first EPS $X.XX million adjusted to XXXX, expect quarter adjusted $X.XX between $XX

reminder, have quarter strongest a nature, seasonal with the the been adjusted our being first in historically EBITDA As margins quarter.

the fourth expected evenly more The the However, increases in adjusted year. EBITDA an for Westwood of seasonality quarter of partnerships partnership first middle-market of spread in subsequent be as several have in as shift is of to the large adjusted offset P&C by quarters. XXXX XXXX in margin quarter being resulted well balance across EBITDA the the in quarter margin each expected our

and quarter results. are with XXXX very pleased fourth In conclusion, we full year our

driving are shareholders their and outsized yielding our Our model echo force differentiated our investments appreciation who trading I are for clients, in and firm's Trevor's and colleagues and partners for recent significant for us. growth. operating profitable confidence the

We open the will Operator? up for call Q&A. now

Operator

[Operator from first Bloomer with UBS. question Instructions] Weston Our comes

Weston Bloomer

hoping one, year? hoping just kind break of was the know and of quarter My of for kind expectations. you results I those came first you those of gave how ahead first and results of your initial kind could in looking in they came I XQ expectations you highlight was guidance the out are I -- above trends can in where

Trevor Baldwin

Yes, this Trevor. is Weston,

of we all operating short and Future growth the exceptional our broad-based And growth; specialty client XX% that talent evidenced organic lead we're business. really the answer MGA our we've We're the organic in to is made investments in saw everywhere and had So on strength our wins, Group, performance as where capabilities across and from hitting business Middle seeing accelerating the rate. Market cylinders.

strategy of the up our period, mid-XXs effective from early a with expansion in financial solid results quarter. most signs and until the the of data MainStreet the enrollment policies. won't really national had annual success Medicare showing And Our first of that because XXXX albeit show quarter business of is organic

Weston Bloomer

the there Or that think just early And the guidance, XQ? momentum in quarter, should given half in any we stronger offsets the and XXXX year? into base to other Great. results stronger adjust the the of just is the are it back too maybe the given

Brad Hale

think Yes, to Brad. just it's too XXXX. I adjust early Weston, it's

seeing momentum of are business there's carry We still as a the lot But January. good in economy. into uncertainty

So our quarter. in delivered we're third as keeping the guidance

Operator

next Meyer with KBW. question comes Shields from Our

Meyer Shields

given leverage? lay question thinking the it quick you're with to on I could a strong Just and wondering was about performance go improving how if you out M&As.

Trevor Baldwin

Yes. Meyer, is this Trevor.

a so exceptionally any We'll business. we BRP would continue and opportunities, to don't on problem. think looking things. the growth a continuing opportunities I be focused small interesting, delever the some a be business that may So is performing that we're at perspective, are well, XXXX, there to not I but few Organically, from One, have M&A. model arise

marketplace the right one in M&A transition And frankly, is now.

precipitously, down of revenue If the M&A speaks is volume XXXX, while think, you in of of market the and I activity health nominal not acquired number look some reality capital which is up transition. that of meaningfully. to the was the the cost underlying at in transactions The was,

that seen yet not be fully have valuations. reflected We in

And interested leading and of industry's the as type our businesses to of a an are it's excited lot position long be not market typically to as for a we going type about. and We acquirer really good more the nature about larger, going transact come in most just term, that businesses, backdrop, episodic would in forward. that and feel be assets of the choice result, to higher-performing of a choosing

Meyer Shields

for been and in know, Are planning everyone's could -- update on how seeing in broad, but action? -- just question, Second hoping you clients I -- recession I I forever. you that guess, discussions their a your was expecting their us very is, are this

Trevor Baldwin

great a Meyer. That's question, Yes.

never tremendous recessionary the clients clients' what obviously what say, puts uncertainty So I the as of I'd lot we've as we're industries the as kind a There's on Certain our say results about to yet. seen pensive. real we're the results around very XX With being our are in in would or soft said, doing more not environment. seeing and operating been others impact are pressure, of today. conversations -- seeing future years. XX is, in that as forces There's holds environment based People we're they unsure there's are, broadly, There's takes in well the -- uncertainty of not that. just clients' ever are under But have. having. softness

Meyer Shields

to like first are are Perfect. the way everything segments is a else Okay. only models and just that ahead quarter us and sounds build MainStreet for renamed. quick Is the And being XXXX? It just Brad. that one changing our Medicare right for very the of

Brad Hale

Yes, those Meyer, that's effectively combination correct. Medicare. It's MainStreet, two a of just segments,

Operator

Our Fargo. Elyse question as next from comes Wells Greenspan

Elyse Greenspan

growth guys the the one. for Future provide First one is organic you the Did MGA quick of fourth a quarter?

Trevor Baldwin

We very was did separately, out not break but it it strong.

Elyse Greenspan

about 'XX, know conservative, the have and QX come just Okay. slowdown and guidance. you any in quarter, guide, trying growth organic XX% think for we've so the your in mid-teens you your then modeling the right, But been first build year And are conservatism? above assumes when of -- you level to quarters fourth in right, guidance set in quarter. for guys I seen then we some or business the any And when historically, for of that

Trevor Baldwin

think I of characteristically I'd say the the how marketplace transition. a right just number least, characterize there's that a influx in level M&A at one insurance I is there's in marketplace is appropriate transition, to conservatism rapid now. lot Similar experiencing but

ultimately streams. the that appropriately admitted markets doing shows insurance in does a conservative. into generation, compression property or continuing execute. it's continued in any kind commission is of -- we're exceptionally it E&S guide synthetic our of of premium to to up the just flows seeing in to appropriate challenging want market business out rate market well, higher not revenue but most seem I than the We're mid-teens. The of don't One

Elyse Greenspan

And together? that to Is helpful. be the end How about pointed That's When that by target. I of to you that to X.X would then get there you delever seeing still back right think of and you for X.X to said think kind year. plan Okay. the year, you you expectations looking the QX? come are financial your guys

Brad Hale

Yes, that's Elyse. expectation, still our

our the QX. business plan. still plan And this the We delever to QX by yet in is delever year to continued

Operator

JPMorgan. Our next with Singzon question from comes Pablo

Pablo Singzon

came The you quarter. comp past I than just detail much stock-based provide one. first in is I what to a one quick numbers compared just higher in and thought increase quarter? the Can the on I this guess,

So increase? what that drove

Brad Hale

based to with we for largely comp opportunity plans it colleagues, as the year. VRP reward and saw incentive high-performing for Pablo, our Yes. it stock their incentive was an colleagues more key under

Trevor Baldwin

practice our Company. and equity the with strong high consistent degree leaders key alignment and It's of pay across performance a with our of having executives

Pablo Singzon

And Brad, the the more future it. right, accounting $XX quarters, through carry given or Got should over, million just works, less? way the

Brad Hale

that it's hit. to vested period onetime of extent Yes, It's over a vest time the shares. will Correct. a

on So under are plans, incentive if four-year offer and award. the some vest three-year, some immediately are we it's -- vest multiple Pablo, vest depending some

all a say of over. So carries It I wouldn't is it mix.

Pablo Singzon

grows one asset a operating revenues, And percentage basis, actually of look then your basis, a cash number it last declined. actually adjusted that year-over-year flat, you contrast of flow for Got on I as roughly it. year-over-year as And me. of an margin. is rose which revenues, If it at the on percentage against EBITDA, are absolute right? sort But -- but that

cash and So what could decline your if you through expectations operating 'XX? drove for talk flow the in

Brad Hale

associated for in we million to flow an were or partnership Pablo, even cash XXX% integration well XX%, and large supplement. Yes. of million year-over-year carve-out the driven public the the cash mainly which flow paid partnerships. X% cash increased integration as with costs able provide the company as 'XX increase was And of TSA interest large which by Westwood we costs transaction, QX free increase a with was $XX calculation integration in carried our and $XX of larger of free or

as costs year-over-year up being and actually for sort you normalize if XX%. those increases flow integration was well partnership related the cash free our interest, of two Now as over

decline, see free year. continue expect to will conversion as over hopefully interest meaningfully delever interest So business, improve to do a our headwind we be cash time. us for to continue the this we rates and But

Operator

comes with from question next James. Raymond Greg Our Instructions] Peters [Operator

Greg Peters

the for the just coming In 'XX. there helpful. at comments Well, about did it made, that some about of how as like or now we context Some wondering last you you a with just it's bit? think what should revenue would the the change going has outlook color think changed seasonality, do seasonality segments. be reporting And back the new with it little look guess year I Westwood. to

Brad Hale

it's Brad. Greg, Yes.

as changed Market in So their of the EBITDA-generating months there's of that a percentage is there. the EBITDA a they're And and last One, benefits what XX or bit actually really QX revenue concentration seasonality two factors P&C And so. larger and a the then previous has become stronger of really over our has Middle is large business, year, X Westwood, in which weakest QX. the in QXs, drove is addition, X. quarter and and

we in EBITDA, shift the remarks. a seeing are and prepared we which revenue in both so And of provided seasonality

So we the X made QX year is QX, the of and year, that in prior over are comparison margin a in to up but expecting balance lower X. in

Greg Peters

helpful. actually That's Okay.

cash comments flow deleveraging, But your delever, and I'm expense flow cash there's curious, free answer, mentioned you to And two to do the debt flow delever. just as also actually way down anticipate some ways in we and EBITDA, 'XX? you On in there's interest about 'XX? and in your is should how that think cash that easy operating you just paying around cash paydown. conversion flow with grow an as debt improves, the other just

Brad Hale

Yes.

of we as going paydown drive cash as capital some flow. revolver appropriately I throughout manage generate organic aggressively us are year the story EBITDA and our in Really, meaningful to of we the as growth. model pay wouldn't to So But delevering working growth operating debt. down we can the for is and one continuing

either on less the move base sort rate, every go. rate or up base of base if X.X% we interest rates $XXX will rates, depending point interest And terms little about of take month, about move model XXX-basis you than where million that that for a $XXX,XXX of year. in current In interest, so per about down, expense expense

modeling think about So that's interest the can expense. how you

Greg Peters

of moving view the follow-up all free guess, on about given what's flow I and cash the Westwood Just parts, of 'XX? seasonality asked -- about seasonality one revenue. I your for

Brad Hale

Yes.

more think shown we past the cash concentrated. year. receipt And X I previously So strongest we've because the is sharing our see largely it's flow receive where it and in you'll actually, our X QX, when from cash of from the than a prior highly standpoint QX QX free in majority was profit

Operator

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

Trevor Baldwin

in their you to us simplify navigate BRP solutions in thank our this colleagues the complex for on to I confidence our to In Thank tenacity deliver call clients joining closing, insights help for challenging X,XXX all their and and year afternoon. grit want and and the a uncertainty. that

During XXXX, beacon of much, being of to all quarter. a and speaking we look for forward very to forward stakeholders. I opportunity Thank look next you with you our all

Operator

This concludes today's teleconference.

You for disconnect at have Thank you your and lines participation, your day. may great this time. a

The Baldwin Insurance Group, Inc. (BWIN) 28 Feb 232022 Q4 Earnings call transcript