BROWN & BROWN, INC. (BRO)

CIK: 0000079282. SIC: 6411 Insurance Agents, Brokers & Service. Latest 10-K as of: 2026-02-12.

SIC breadcrumb: Finance, Insurance, And Real Estate > SIC Major Group 64 > SIC 6411 Insurance Agents, Brokers & Service

SEC company page: https://www.sec.gov/edgar/browse/?CIK=79282. Latest filing source: 0001193125-26-046984.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000079282.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

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Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-12. Report date: 2025-12-31.

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Company Overview

The following discussion should be read in conjunction with our Consolidated Financial Statements and the related Notes to those Financial Statements included elsewhere in this Annual Report on Form 10-K, which are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In addition, see “Information Regarding Non-GAAP Financial Measures” below regarding important information on non-GAAP financial measures contained in our discussion and analysis.

We are a diversified insurance agency, wholesale brokerage, insurance programs, specialty insurance business and service organization headquartered in Daytona Beach, Florida. As an insurance intermediary, our principal sources of revenue are commissions paid by insurance companies and, to a lesser extent, fees paid directly by customers. Commission revenues generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, sales or payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control. We also participate in captive insurance facilities for the purpose of having additional capacity to place coverage, driving additional revenues and to participate in underwriting results. We limit the Company's exposure to claims expenses through reinsurance or by only participating in certain tranches of the underwriting. We also operate registered insurance companies to support our national flood insurance program and to support our cross-collateralized segregated captive cell businesses. We do not participate in earnings of the collateralized segregated captive cells.

We have increased revenues every year from 1993 to 2025, with the exception of 2009, when our revenues declined 1.0%. Our revenues grew from $95.6 million in 1993 to $5.9 billion in 2025, reflecting a compound annual growth rate of 14.2%. In the same 32-year period, we increased net income from $8.1 million to over $1.0 billion in 2025, a 16.9% compound annual growth rate.

The volume of business from new and existing customers, fluctuations in insurable exposure units, changes in premium rate levels, changes in general economic and competitive conditions, a reduction of purchased limits, or the occurrence of catastrophic weather events all affect our revenues. For example, higher levels of inflation, an increase in the value of insurable exposure units or a general decline in economic activity, could increase or decrease the value of insurable exposure units. Conversely, increasing costs of litigation settlements and awards could cause some customers to seek higher levels of insurance coverage. Historically, we have grown our revenues as a result of our focus on new business, customer retention and acquisitions. We foster a strong, decentralized sales and service culture, which enables responsiveness to changing business conditions and drives accountability for results.

The term “core commissions and fees” excludes profit-sharing contingent commissions, and therefore, it represents the revenues earned directly from specific insurance policies sold, and specific fee-based services rendered. The net change in core commissions and fees reflects the aggregate changes attributable to: (i) net new and lost accounts; (ii) net changes in our customers’ exposure units, deductibles or insured limits; (iii) net changes in insurance premium rates or the commission rate paid to us by our carrier partners; (iv) the net change in fees paid to us by our customers and (v) any businesses acquired or disposed of.

We also earn profit-sharing contingent commissions, which are commissions based primarily on underwriting results, but in select situations may reflect additional considerations for volume, growth and/or retention. These commissions, which are included in our commissions and fees in the Consolidated Statements of Income, are estimated and accrued throughout the year based on actual premiums written and knowledge, to the extent it is available, of losses incurred. Payments are primarily received in the first and second quarters of each subsequent year, based upon the aforementioned considerations for the prior year(s), but may differ from the amount estimated and accrued due to the lack of complete visibility regarding loss information until they are received. Over the last three years, profit-sharing contingent commissions have averaged approximately 4.4% of commissions and fees.

Fee revenues primarily relate to services other than securing coverage for our customers, and for fees negotiated in lieu of commissions. Fee revenues are generated by: (i) our Specialty Distribution segment, which earns fees primarily for the issuance of insurance policies on behalf of insurance carriers and (ii) our Retail segment in our large-account customer base, where we primarily earn fees for securing insurance for our customers, in our F&I businesses where we earn fees for assisting our customers with creating and selling warranty and service risk management programs, and fees for Medicare Set-aside services, Social Security disability services and Medicare benefits advocacy services. Fee revenues as a percentage of our total commissions and fees, represented 22.2% in 2025 and 21.1% in 2024.

For the year ended December 31, 2025, our commissions and fees growth rate was 22.5% and our consolidated Organic Revenue growth rate was 2.8%.

Historically, investment and other income has consisted primarily of interest earnings on operating cash and where permitted, on premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy as it relates to the Company’s capital is to invest available funds in high-quality, short-term money-market funds and fixed income investment securities. Investment income also includes gains and losses realized from the sale of investments. Other income primarily reflects other miscellaneous revenues.

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Income before income taxes for the year ended December 31, 2025, increased by $68 million, or 5.2% over 2024, driven by Organic Revenue growth, increased profit-sharing contingent commissions, leveraging our expense base, increased investment income, acquisitions completed in the past twelve months and the change in mark-to-market of escrow liability. This growth was partially offset by Acquisition/Integration Costs and the change in estimated acquisition earn-out payables.

Information Regarding Non-GAAP Financial Measures

In the discussion and analysis of our results of operations, in addition to reporting financial results in accordance with generally accepted accounting principles (“GAAP”), we provide references to the following non-GAAP financial measures as defined in Regulation G of the SEC rules: Organic Revenue, EBITDAC, EBITDAC Margin, EBITDAC - Adjusted and EBITDAC Margin - Adjusted. We present these measures because we believe such information is of interest to the investment community. We believe they provide additional meaningful methods to evaluate the Company’s operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis due to the impact of certain items that have a high degree of variability, that we believe are not indicative of ongoing performance and that are not easily comparable from period to period. This non-GAAP financial information should be considered in addition to, not in lieu of, the Company’s consolidated income statements and balance sheets as of the relevant date. Consistent with Regulation G, a description of such information is provided below and tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in this Annual Report on Form 10-K under “Results of Operations - Segment Information.”

We view Organic Revenue and Organic Revenue growth as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our two segments, because they allow us to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that were a part of our business in both the current and prior year and that are expected to continue in the future. We also view EBITDAC, EBITDAC - Adjusted, EBITDAC Margin and EBITDAC Margin - Adjusted as important indicators when assessing and evaluating our performance, as they present more comparable measurements of our operating margins in a meaningful and consistent manner. As disclosed in our most recent proxy statement, we use Organic Revenue growth, and EBITDAC Margin - Adjusted as key performance metrics for our short-term and long-term incentive compensation plans for executive officers and other key employees.

Non-GAAP Revenue Measures

•
Organic Revenue is our core commissions and fees less: (i) the core commissions and fees earned for the first twelve months by newly acquired operations; (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period) and (iii) Foreign Currency Translation (as defined below). The term “core commissions and fees” excludes profit-sharing contingent commissions; and therefore, represents the revenues earned directly from specific insurance policies sold and specific fee-based services rendered. Organic Revenue can be expressed as a dollar amount or a percentage rate when describing Organic Revenue growth.

Non-GAAP Earnings Measures

•
EBITDAC is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables.

•
EBITDAC Margin is defined as EBITDAC divided by total revenues.

•
EBITDAC - Adjusted is defined as EBITDAC, excluding (i) (gain)/loss on disposal (as defined below), (ii) Acquisition/Integration Costs (as defined below) and (iii) mark-to-market of escrow liability (as defined below).

•
EBITDAC Margin - Adjusted is defined as EBITDAC - Adjusted divided by total revenues.

Definitions Related to Certain Components of Non-GAAP Measures

•
“Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings; costs for third-party professional services, including legal, accounting, consulting, financial advisory and due diligence; costs and fees associated with entry into the bridge financing commitment; costs of integrating or streamlining processes and information technology systems, including data migration and system integration; costs associated with optimizing vendor agreements and leased office space, including exit costs related to location combinations; and employment-related costs, including severance payments, costs associated with the transition of certain legacy compensation programs, retention-related compensation expenses, and incentive payments) arising out of our acquisition of Accession and acquisitions previously completed by Accession, which are not considered to be normal, recurring or part of ongoing operations.

•
“Foreign Currency Translation” means the period-over-period impact of foreign currency translation, which is calculated by applying current-year foreign exchange rates to the various functional currencies in our business to our reporting currency of U.S. dollars for the same period in the prior year.

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•
“(Gain)/loss on disposal” is a caption on our consolidated statements of income which reflects net proceeds received as compared to the net book value related to sales of books of business and other divestiture transactions.

•
“Mark-to-market of escrow liability” is a caption on our consolidated statements of income which reflects the non-cash change in the fair value associated with certain shares of the Company’s common stock held in escrow. The change is driven by fluctuations in our stock price between the beginning of the period and the end of the period. These escrowed shares represent a portion of the merger consideration payable in connection with our acquisition of Accession. The escrowed shares secure certain indemnification obligations of the Accession equity holders related to businesses that are in run-off or discontinued.

Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments and; therefore, comparability may be limited. This supplemental non-GAAP financial information should be considered in addition to, and not in lieu of, the Company's Consolidated Financial Statements.

Acquisitions

Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 1993 through the fourth quarter of 2025, we acquired 717 insurance intermediary operations.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We continually evaluate our estimates, which are based upon a combination of historical experience and assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for our judgments about the recognition of revenues, expenses, carrying values of our assets and liabilities, of which values are not readily apparent from other sources. Actual results may differ from these estimates.

We believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue recognition, business combinations and purchase price allocations, intangible asset impairments, non-cash stock-based compensation and reserves for litigation. In particular, the accounting for these areas is subject to uncertainty, because it requires significant use of judgment to be made by management. Different assumptions in the application of these policies could result in material changes in our consolidated financial position or consolidated results of operations.

Revenue Recognition

The majority of our revenue is commissions derived from our performance as agents and brokers, acting on behalf of insurance carriers to sell products to customers that are seeking to transfer risk; and conversely, acting on behalf of those customers in negotiating with insurance carriers seeking to acquire risk in exchange for premiums. In the majority of these arrangements, our performance obligation is complete upon the effective date of the bound policy; as such, that is when the associated revenue is recognized. In some arrangements, where we are compensated through commissions, we also perform other services for our customer beyond binding of coverage. In those arrangements we apportion the commission between binding of coverage and other services based on their relative fair value and recognize the associated revenue as those performance obligations are satisfied. Where the Company’s performance obligations have been completed, but the final amount of compensation is unknown due to variable factors, we estimate the amount of such compensation. We refine those estimates upon our receipt of additional information or final settlement, whichever occurs first.

To a lesser extent, the Company earns revenues in the form of fees. Like commissions, fees paid to us in lieu of commission, are recognized upon the effective date of the bound policy. When we are paid a fee for service; however, the associated revenue is recognized over a period of time that coincides with when the customer simultaneously receives and consumes the benefit of our work, which characterizes most of our claims processing arrangements and various services performed in our property and casualty, and employee benefits practices. Other fees are typically recognized upon the completion of the delivery of the agreed-upon services to the customer.

To a much lesser extent, the Company earns revenues in the form of net retained earned premiums in connection with the Captives. These premiums are reported net of the ceded premiums for reinsurance and recognized ratably over the associated policy periods.

Management determines a cancellation reserve based upon historical cancellation experience adjusted in accordance with known circumstances.

See Note 2 to our Consolidated Financial Statements for additional information regarding the nature and timing of our revenues.

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Business Combinations and Purchase Price Allocations

In connection with acquisitions, we record the estimated fair value of net tangible assets purchased, the estimated fair value of identifiable intangible assets purchased, which primarily consist of purchased customer accounts, and the excess of purchase prices over the fair value of identifiable net assets acquired (goodwill). The recorded purchase prices include an estimation of the fair value of liabilities associated with any potential contingent consideration provisions (such as earn-out obligations). The allocation of purchase price to intangible assets, the determination of the related estimated useful lives and the estimated fair value of earn-out payables require significant estimates and assumptions and affects the amount of future expense recognized. For certain large or complex acquisitions, we retain the services of certified valuation specialists to assist with assigning estimated values to certain acquired assets and assumed liabilities.

Purchased customer accounts include the right to represent insureds or claimants supported by the physical records and files obtained from acquired businesses that contain information about insurance policies, customers and other matters essential to policy renewals and delivery of services. Their value primarily represents the present value of the underlying net cash flows expected to be received over the estimated future duration of the acquired customer relationships. Purchased customer accounts are amortized on a straight-line basis over the related estimated lives which generally average approximately 15 years.

Typically, an income approach is used to estimate the present value of the expected future cash flows associated with the purchased customer accounts. Critical estimates used in the model include forecasting future performance such as projected revenue growth and profit margins, selection of attrition rates and selection of discount rates. To evaluate these assumptions, management considers historical data, operating strategies, expected synergies and available relevant market data. Useful life is estimated as the period over which substantially all of the future cash flows from the purchased customer accounts will be received.

Many of the acquisitions we complete contain provisions for potential earn-out obligations. The amounts recorded as earn-out payables are based upon the terms of the purchase agreements and the present value of expected future payments to be made to the sellers resulting from estimated future operating results of the acquired entities over a period subsequent to the acquisition date, typically one to three years. The earn-out payables are measured at estimated fair value as of the acquisition date and are included in purchase price consideration. Subsequent changes in the fair value of earn-out obligations are recorded in the Consolidated Statement of Income as a result of updated expectations for the performance of the associated businesses.

The expected future payments are estimated based on the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These estimates are then discounted to a present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made. For certain acquisitions, we also utilize a Monte Carlo simulation to estimate the fair value of earnout obligations. Critical estimates used in the valuation of earn-out liabilities include forecasting future performance such as projected revenue growth and profit margins and selection of risk premiums, volatility and discount rates. To evaluate these assumptions, management considers historical data, operating strategies, expected synergies and relevant market data from comparable public companies.

These estimates and assumptions require significant judgment. While management believes the estimates and assumptions are reasonable, they are inherently uncertain. Changes in these estimates and assumptions could affect the carrying value of purchased customer accounts, earnout obligations, and the related future expenses.

Intangible Assets Impairment

Management assesses the recoverability of our goodwill and our amortizable intangible assets annually and whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Any of the following factors are examples, that if present, may trigger an impairment review: (i) a significant underperformance relative to historical or projected future operating results, (ii) a significant negative industry or economic trend, and (iii) a significant decline in our market capitalization. If the recoverability of these assets is unlikely because of the existence of one or more of the above-referenced factors, an impairment analysis is performed.

Goodwill is subject to at least an annual assessment for impairment. To determine if there is potential impairment of goodwill, we compare the fair value of each reporting unit with its carrying value. The Company may elect to first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If the Company does not perform a qualitative assessment, or if, as a result of the qualitative assessment, it determines that a quantitative analysis is required, the Company will estimate the fair value of the reporting unit for comparison against the carrying value. If the estimated fair value of the reporting unit is less than its carrying value, an impairment loss would be recorded for the amount of carrying value in excess of fair value.

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We typically use a combination of market and income approach methodologies to estimate the fair value of our reporting units. The income approach is generally based on a discounted cash flow analysis, which estimates the present value of the projected cash flows to be generated by the reporting unit. Critical estimates and assumptions used in the analysis include forecasting future performance such as projected revenue growth, profit margins and capital expenditures as well as tax rates, cost of capital and risk premiums used in the selection of discount rates. To evaluate these assumptions, management considers historical data, operating strategies and available relevant market data from comparable public companies. The market approach estimates the value of our reporting units by comparing to comparable public companies. Various valuation multiples of companies that are economically and operationally similar are used as data points for selecting multiples for the reporting units. We will from time to time retain the services of certified valuation specialists to assist with the valuation of certain reporting units.

Amortizable intangible assets are amortized over their useful lives and are subject to an impairment review, whenever events or changes in circumstances indicate the carrying value may not be recoverable. The review compares the carrying value of the assets, or asset groups, to an estimate of the undiscounted future cash flows resulting from the use of the assets. An impairment is indicated if the estimated future cash flows are less than the carrying value of the asset. An impairment loss would be recognized for the excess of the carrying value over the fair value of the asset.

These estimates and assumptions require significant judgment. While management believes the estimates and assumptions are reasonable, they are inherently uncertain. If our actual results are not consistent with our expectations, we may be required to revise the assessment and, if appropriate, record an impairment charge. That impairment charge could have a material impact on our financial results.

We completed our most recent evaluation of impairment for goodwill as of November 30, 2025, and determined that the fair value of goodwill exceeded the carrying value for each reporting unit. Additionally, there have been no impairments recorded for amortizable intangible assets for the years ended December 31, 2025, 2024 or 2023.

Non-Cash Stock-Based Compensation

We grant non-vested stock awards to our employees, with the related compensation expense recognized in the financial statements over the associated service period based upon the grant-date fair value of those awards, subject to any performance modification. During the performance measurement period, we review the probable outcome of the performance conditions associated with our performance awards and adjust the expense recognition accruals with the expected performance outcome.

With respect to time-based-only restricted stock awards, the grantees are eligible to receive payments of dividends and exercise voting privileges from the date of grant, and the awarded shares are included as issued and outstanding common stock shares and included in the calculation of basic and diluted net income per share. With respect to time-based-only restricted stock units, the grantees are eligible to receive payments of dividend equivalents from the date of grant, and the awarded restricted stock units are included in the calculation of basic and diluted net income per share but are not included as issued and outstanding common stock shares until the awarded restricted stock units vest.

With respect to performance-based restricted stock awards that become awarded, the grantees are eligible to receive payments of dividends and exercise voting privileges from the awarded date, and the awarded shares are included as issued and outstanding common stock shares and included in the calculation of basic and diluted net income per share. With respect to performance-based restricted stock units that become awarded, the grantees are eligible to receive payments of dividend equivalents from the awarded date, and the awarded restricted stock units are included in the calculation of basic and diluted net income per share but are not included as issued and outstanding common stock shares until the awarded restricted stock units vest.

Litigation and Claims

We are subject to various litigation and claims that arise in the ordinary course of business. If it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss is estimable, an accrual for the costs to resolve these claims is recorded in accrued expenses in the accompanying financial statements. Professional fees related to these claims are included in other operating expenses in the accompanying Consolidated Statement of Income as incurred. Management, with the assistance of in-house and outside counsel, determines whether it is probable that a liability has been incurred and estimates the amount of loss based upon analysis of individual issues. New developments or changes in settlement strategy in dealing with these matters may significantly affect the required reserves and affect our net income.

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RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in conjunction with the accompanying Consolidated Financial Statements and related Notes. For a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023, see Part II, Item 7 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 13, 2025.

Financial information relating to our Consolidated Financial Results is as follows:

(in millions, except percentages)

2025

% Change

2024

REVENUES

Core commissions and fees

$

5,508

21.3

%

$

4,539

Profit-sharing contingent commissions

255

53.6

%

166

Investment income and other income

139

39.0

%

100

Total revenues

5,902

22.8

%

4,805

EXPENSES

Employee compensation and benefits

2,935

22.0

%

2,406

Other operating expenses

959

35.1

%

710

(Gain)/loss on disposal

2

(106.5

)%

(31

)

Amortization

312

75.3

%

178

Depreciation

55

25.0

%

44

Interest

297

53.9

%

193

Change in estimated acquisition earn-out payables

25

NMF

2

Mark-to-market of escrow liability

(54

)

NMF

—

Total expenses

4,531

29.4

%

3,502

Income before income taxes

1,371

5.2

%

1,303

Income taxes

304

1.0

%

301

Net income before non-controlling interests

1,067

6.5

%

1,002

Less: Net income attributable to non-controlling interests

13

44.4

%

9

Net income attributable to the Company

$

1,054

6.1

%

$

993

Income Before Income Taxes Margin (1)

23.2

%

27.1

%

EBITDAC - Adjusted (2)

$

2,121

25.6

%

$

1,689

EBITDAC Margin - Adjusted (2)

35.9

%

35.2

%

Organic Revenue growth rate (2)

2.8

%

10.4

%

Employee compensation and benefits relative

   to total revenues

49.7

%

50.1

%

Other operating expenses relative to total revenues

16.2

%

14.8

%

(1)
“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)
A non-GAAP financial measure

NMF = Not a meaningful figure

Commissions and Fees

Commissions and fees, including profit-sharing contingent commissions and earned premiums for 2025, increased $1,058 million to $5,763 million, or 22.5% over 2024. Core commissions and fees in 2025 increased $969 million, composed of: (i) approximately $126 million of net new and renewal business, which reflects an Organic Revenue growth rate of 2.8%; (ii) $836 million from acquisitions that had no comparable revenues in the same period of 2024; (iii) an increase from the impact of Foreign Currency Translation of $18 million and (iv) an offsetting decrease of $11 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months. Profit-sharing contingent commissions for 2025 increased by $89 million, or 53.6%, compared to the same period in 2024. This increase was driven primarily by (i) improved underwriting results, increased premium volume and qualifying for certain profit-sharing contingent commissions that we did not qualify for in the prior year and (ii) recent acquisitions.

Investment and Other Income

Investment and other income for 2025 was $139 million, compared with $100 million in 2024. The increase was driven by approximately $42 million of interest income earned from the proceeds of the Company’s follow-on common stock offering and senior notes issuance in June 2025, which was held in preparation for the closing of the Transaction. The increase year over year was partially offset by lower average interest rates as compared to the prior year.

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Employee Compensation and Benefits

Employee compensation and benefits expense as a percentage of total revenues was 49.7% for the year ended December 31, 2025 as compared to 50.1% for the year ended December 31, 2024, and increased 22.0%, or $529 million. This increase included $448 million of compensation costs related to acquisitions that had no comparable costs in the same period of 2024. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2025 and 2024 increased by $81 million. This underlying employee compensation and benefits expense increase was primarily related to: (i) an increase in staff costs attributable to new hires; (ii) the increased cost of health insurance; (iii) an increase in producer compensation associated with revenue growth and (iv) the year-over-year increase of approximately $12 million in the value of deferred compensation liabilities driven by changes in the market prices of our deferred compensation plan, with such amount substantially offset within other operating expenses as we hold assets to fund these liabilities.

Other Operating Expenses

Other operating expenses represented 16.2% of total revenues for 2025 as compared to 14.8% for the year ended December 31, 2024. Other operating expenses for 2025 increased $249 million, or 35.1%, from the same period of 2024. This change includes: (i) $161 million of other operating expenses related to acquisitions that had no comparable costs in the same period of 2024; (ii) $113 million of Acquisition/Integration Costs that had no comparable costs in the same period of 2024; and (iii) increased information technology-related costs, partially offset by (iv) lower claims costs within our captives and (v) the year-over-year decrease of approximately $12 million in the value of assets held to fund the associated liabilities within our deferred compensation plan, which was substantially offset within employee compensation and benefits, as noted above.

Gain or Loss on Disposal

The Company recognized a net loss on disposal of $2 million in 2025 and a net gain on disposal $31 million in 2024. The amount for 2024 was primarily attributable to the prior year finalization of the gain associated with selling certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023. Although we do not routinely sell businesses or customer accounts, we periodically sell an office or a book of business (one or more customer accounts) that we believe does not produce reasonable margins or demonstrate a potential for adequate growth, or because doing so is in the Company’s best interest.

Amortization

Amortization expense for 2025 increased $134 million to $312 million, or 75.3% over 2024. This change reflects the amortization of new intangibles from businesses acquired within the past twelve months, net of certain intangible assets becoming fully amortized or written off in the (gain)/loss on disposal.

Depreciation

Depreciation expense for 2025 increased $11 million to $55 million, or 25.0% over 2024. Changes in depreciation expense reflect net additions of fixed assets resulting from businesses acquired in the past twelve months and the addition of fixed assets resulting from business initiatives, partially offset by the impact of fixed assets that became fully depreciated or written off in the (gain)/loss on disposal.

Interest Expense

Interest expense for 2025 increased $104 million to $297 million, or 53.9%, from 2024. The increase is due to higher debt balances resulting from debt issuance in the second quarter of 2025 to fund the Transaction, which was partially offset by decreases in the floating-rate benchmark used on our adjustable-rate debt.

Change in Estimated Acquisition Earn-Out Payables

Accounting Standards Codification (“ASC”) 805 - Business Combinations is the authoritative guidance requiring an acquirer to recognize 100% of the fair value of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase price arrangements) at the acquisition date must be included in the purchase price consideration. The recorded purchase price for acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations are required to be recorded in the Consolidated Statements of Income when incurred or reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years.

The net charge or credit to the Consolidated Statements of Income for the period is the combination of the net change in the estimated acquisition earn-out payables liability, and the accretion of the present value discount on those liabilities.

37

As of December 31, 2025, the fair values of the estimated acquisition earn-out payables were reevaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820 - Fair Value Measurement. The resulting net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended December 31, 2025 and 2024 were as follows:

(in millions)

2025

2024

Change in fair value

$

16

$

(6

)

Interest expense accretion

9

8

Net change in earnings from estimated acquisition

   earn-out payables

$

25

$

2

For the years ended December 31, 2025 and 2024, the fair value of estimated earn-out payables was reevaluated and increased by $16 million for 2025 and decreased by $6 million for 2024, which are charges and credits, exclusive of interest expense accretion, to the Consolidated Statements of Income for 2025 and 2024.

As of December 31, 2025, the estimated acquisition earn-out payables were $541 million, of which $281 million was recorded as accounts payable and $260 million was recorded as other non-current liabilities. As of December 31, 2024, the estimated acquisition earn-out payables were $167 million, of which $75 million was recorded as accounts payable and $92 million was recorded as other non-current liabilities.

Income Taxes

The effective tax rate on income from operations was 22.2% in 2025 and 23.1% in 2024.

RESULTS OF OPERATIONS — SEGMENT INFORMATION

As discussed in Note 15 “Segment Information” of the Notes to Consolidated Financial Statements, we operate two reportable segments: Retail and Specialty Distribution. On a segmented basis, changes in amortization, depreciation and interest expenses generally result from activity associated with acquisitions. Likewise, other income consists primarily of miscellaneous income and therefore can fluctuate between comparable periods. As such, management primarily focuses on the Organic Revenue growth rate and EBITDAC Margin when evaluating the operational efficiency of a segment.

The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2025 are as follows:

2025

Retail(1)

Specialty Distribution

Total

(in millions)

2025

2024

2025

2024

2025

2024

Commissions and fees

$

3,384

$

2,720

$

2,379

$

1,985

$

5,763

$

4,705

Total change

$

664

$

394

$

1,058

Total growth %

24.4

%

19.8

%

22.5

%

Profit-sharing contingent

   commissions

(72

)

(44

)

(183

)

(122

)

(255

)

(166

)

Core commissions and

   fees

$

3,312

$

2,676

$

2,196

$

1,863

$

5,508

$

4,539

Acquisitions

(559

)

(277

)

(836

)

Dispositions

(11

)

—

(11

)

Foreign currency translation

14

4

18

Organic Revenue(2)

$

2,753

$

2,679

$

1,919

$

1,867

$

4,672

$

4,546

Organic Revenue

   growth(2)

$

74

$

52

$

126

Organic Revenue growth rate(2)

2.8

%

2.8

%

2.8

%

(1)
The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 15 of the Notes to the Consolidated Financial Statements, which includes corporate and consolidation items.

(2)
A non-GAAP financial measure.

38

The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2024, by segment, are as follows:

2024

Retail(1)

Specialty Distribution

Total

(in millions)

2024

2023

2024

2023

2024

2023

Commissions and fees

$

2,720

$

2,500

$

1,985

$

1,699

$

4,705

$

4,199

Total change

$

220

$

286

$

506

Total growth %

8.8

%

16.8

%

12.1

%

Profit-sharing contingent

   commissions

(44

)

(50

)

(122

)

(80

)

(166

)

(130

)

Core commissions and fees

$

2,676

$

2,450

$

1,863

$

1,619

$

4,539

$

4,069

Acquisitions

(81

)

(65

)

(146

)

Dispositions

(6

)

(95

)

(101

)

Foreign currency translation

8

2

10

Organic Revenue(2)

$

2,595

$

2,452

$

1,798

$

1,526

$

4,393

$

3,978

Organic Revenue growth(2)

$

143

$

272

$

415

Organic Revenue growth rate(2)

5.8

%

17.8

%

10.4

%

(1)
The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 15 of the Notes to the Consolidated Financial Statements, which includes corporate and consolidation items.

(2)
A non-GAAP financial measure.

The reconciliation of income before income taxes, included in the Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the year ended December 31, 2025, including by segment, is as follows:

(in millions)

Retail

Specialty Distribution

Other

Total

Total Revenues

$

3,406

$

2,409

$

87

$

5,902

Income before income taxes

707

865

(201

)

1,371

Income Before Income Taxes Margin(1)

20.8

%

35.9

%

NMF

23.2

%

Amortization

219

93

—

312

Depreciation

31

19

5

55

Interest

28

38

231

297

Change in estimated acquisition

   earn-out payables

8

17

—

25

EBITDAC(2)

$

993

$

1,032

$

35

$

2,060

EBITDAC Margin(2)

29.2

%

42.8

%

NMF

34.9

%

(Gain)/loss on disposal

2

—

—

2

Acquisition/Integration Costs

27

6

80

113

Mark-to-market of escrow liability

—

—

(54

)

(54

)

EBITDAC - Adjusted(2)

$

1,022

$

1,038

$

61

$

2,121

EBITDAC Margin - Adjusted(2)

30.0

%

43.1

%

NMF

35.9

%

(1)
“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)
A non-GAAP financial measure.

NMF = Not a meaningful figure

39

The reconciliation of income before income taxes, included in the Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the year ended December 31, 2024, including by segment, is as follows:

(in millions)

Retail

Specialty Distribution

Other

Total

Total Revenues

$

2,729

$

2,016

$

60

$

4,805

Income before income taxes

602

778

(77

)

1,303

Income Before Income Taxes Margin(1)

22.1

%

38.6

%

NMF

27.1

%

Amortization

119

59

—

178

Depreciation

21

18

5

44

Interest

71

41

81

193

Change in estimated acquisition

   earn-out payables

8

(6

)

—

2

EBITDAC(2)

$

821

$

890

$

9

$

1,720

'EBITDAC Margin(2)

30.1

%

44.1

%

NMF

35.8

%

(Gain)/loss on disposal

(3

)

(28

)

—

(31

)

Acquisition/Integration Costs

—

—

—

—

Mark-to-market of escrow liability

—

—

—

—

EBITDAC - Adjusted(2)

818

862

9

1,689

EBITDAC Margin - Adjusted(2)

30.0

%

42.8

%

NMF

35.2

%

(1)
“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)
A non-GAAP financial measure

NMF = Not a meaningful figure

40

Retail Segment

The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers, and non-insurance risk-mitigating products through our F&I businesses. Approximately 77% of the Retail segment’s commissions and fees revenue is commission based.

Financial information relating to our Retail segment for the 12 months ended December 31, 2025 and 2024 is as follows:

(in millions, except percentages)

2025

% Change

2024

REVENUES

Core commissions and fees

$

3,314

23.8

%

$

2,676

Profit-sharing contingent commissions

72

63.6

%

44

Investment and other income

20

122.2

%

9

Total revenues

3,406

24.8

%

2,729

EXPENSES

Employee compensation and benefits

1,848

26.4

%

1,462

Other operating expenses

563

25.4

%

449

(Gain)/loss on disposal

2

(166.7

)%

(3

)

Amortization

219

84.0

%

119

Depreciation

31

47.6

%

21

Interest

28

(60.6

)%

71

Change in estimated acquisition earn-out payables

8

—

8

Total expenses

2,699

26.9

%

2,127

Income before income taxes

$

707

17.4

%

$

602

Income Before Income Taxes Margin (1)

20.8

%

22.1

%

EBITDAC - Adjusted (2)

$

1,022

24.9

%

$

818

EBITDAC Margin - Adjusted (2)

30.0

%

30.0

%

Organic Revenue growth rate (2)

2.8

%

5.8

%

Employee compensation and benefits relative to total revenues

54.3

%

53.6

%

Other operating expenses relative to total revenues

16.5

%

16.5

%

(1)
“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)
A non-GAAP financial measure

NMF = Not a meaningful figure

The Retail segment’s total revenues in 2025 increased 24.8%, or $677 million, over 2024, to $3,406 million. The $638 million increase in core commissions and fees was driven by the following: (i) approximately $559 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2024; (ii) an increase of $74 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $14 million; and (iv) an offsetting decrease of $11 million related to commissions and fees recorded in 2024 from businesses since divested. Profit-sharing contingent commissions in 2025 increased 63.6%, or $28 million, over 2024, to $72 million. This increase was due primarily to acquisitions completed within the last twelve months. The Retail segment’s total commissions and fees increased 24.5% and the Organic Revenue growth rate was 2.8% for 2025. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth on renewals of existing customers. Renewal business was impacted by timing of certain nonrecurring revenue items, slowing rate increases, rate decreases for certain lines of coverage, certain adjustments to incentive commissions and a regulatory change for one of our UK businesses.

Income before income taxes for 2025 increased 17.4%, or $105 million, over the same period in 2024, to $707 million. The primary factors driving this increase were: (i) the profit associated with the net increase in revenue as described above and (ii) a decrease in intercompany interest expense, partially offset by (iii) increased amortization and depreciation expense; and (iv) Acquisition/Integration Costs.

EBITDAC - Adjusted for 2025 increased 24.9%, or $204 million, from the same period in 2024, to $1,022 million. EBITDAC Margin - Adjusted for 2025 remained flat at 30.0% as compared to the same period in 2024. EBITDAC Margin - Adjusted was primarily driven by (i) the net increase in revenue as described above and (ii) leveraging our expense base, offset by (iii) the timing of revenues associated with recent acquisitions.

Specialty Distribution Segment

The Specialty Distribution Segment is composed of three divisions; our programs business, known as Arrowhead Programs; our wholesale brokerage business, known as Bridge Specialty Group; and our specialty program business, known as Arrowhead Specialty.

41

Arrowhead Programs manages a diverse portfolio of professional liability, personal lines, commercial lines, public entity and specialty programs supported by over 100 well-capitalized insurance carriers. In most cases, the insurance carriers that support these programs have delegated underwriting and, in many instances, claims-handling authority These programs are generally distributed through a global network of independent agents and brokers, including Brown & Brown retail agents, and offer targeted products and services designed for businesses, individuals, specific industries, trade groups, professions, public entities, municipalities, and niche markets. This division also operates our write-your-own flood insurance carrier, WNFIC and participates in a quota share captive and an excess of loss layer captive. WNFIC’s underwriting business consists of policies written on behalf of and fully ceded to the NFIP, as well as excess flood policies, which are fully reinsured in the private market.

Bridge Specialty Group offers global wholesale brokerage and delegated binding/underwriting capabilities across multiple lines, to independent agents and brokers, including Brown & Brown retail agents. Our teams across the globe provide industry knowledge and expertise, for placements across multiple lines of coverage based on access to admitted, excess and surplus lines carriers, as well as the Lloyd’s markets in the United Kingdom.

Arrowhead Specialty is composed of our newly acquired specialty businesses from One80 Intermediaries, a segment of Accession, which offer solutions across affinity organizations, administrative services, captives, reinsurance, travel/accident, warranty, and life & health.

Arrowhead Programs' and Arrowhead Specialty's captives businesses provide additional underwriting capacity that enables growth in core commissions and fees and allow us to participate in underwriting results with limited exposure to claims expenses. The Company has traditionally participated in underwriting profits through profit-sharing contingent commissions. These captives purchase reinsurance or participate in limited tranches of the underwriting risk in order to limit the Company's exposure to claims expenses.

Approximately 81% of the Specialty Distribution segment’s commissions and fees revenue is commission based.

Financial information relating to our Specialty Distribution segment for the 12 months ended December 31, 2025 and 2024 is as follows:

(in millions, except percentages)

2025

% Change

2024

REVENUES

Core commissions and fees

$

2,196

17.9

%

$

1,863

Profit-sharing contingent commissions

183

50.0

%

122

Investment and other income

30

(3.2

)%

31

Total revenues

2,409

19.5

%

2,016

EXPENSES

Employee compensation and benefits

919

19.0

%

772

Other operating expenses

458

19.9

%

382

(Gain)/loss on disposal

—

(100.0

)%

(28

)

Amortization

93

57.6

%

59

Depreciation

19

5.6

%

18

Interest

38

(7.3

)%

41

Change in estimated acquisition earn-out payables

17

NMF

(6

)

Total expenses

1,544

24.7

%

1,238

Income before income taxes

$

865

11.2

%

$

778

Income Before Income Taxes Margin (1)

35.9

%

38.6

%

EBITDAC - Adjusted (2)

$

1,038

20.4

%

$

862

EBITDAC Margin - Adjusted (2)

43.1

%

42.8

%

Organic Revenue growth rate (2)

2.8

%

17.8

%

Employee compensation and benefits relative to total revenues

38.1

%

38.3

%

Other operating expenses relative to total revenues

19.0

%

18.9

%

(1)
“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)
A non-GAAP financial measure

NMF = Not a meaningful figure

The Specialty Distribution segment’s total revenue for 2025 increased 19.5%, or $393 million, as compared to the same period in 2024, to $2,409 million. The $333 million increase in core commissions and fees revenue was driven by: (i) approximately $277 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2024; (ii) approximately $52 million of net new business, renewal business and fee revenues; and (iii) an increase from the impact of Foreign Currency Translation of $4 million. Profit-sharing contingent commissions in 2025 increased 50.0%, or $61 million, from 2024, to $183 million which was primarily driven by favorable loss ratios, increased premiums, and acquisitions completed in the past twelve months.

42

Total commissions and fees increased 19.8% and the Organic Revenue growth rate was 2.8% for 2025. The Organic Revenue growth was driven by net new and retained business and exposure unit expansion; and was partially offset by non-recurring flood claims processing revenue in the prior year and declining rates on catastrophic ("CAT") property.

Income before income taxes for 2025 increased 11.2%, or $87 million, from 2024, to $865 million. Income before income taxes increased due to: (i) the drivers of EBITDAC - Adjusted described below; partially offset by: (ii) increased amortization expense; (iii) a gain on disposal recorded in the prior year; (iv) an increase in estimated acquisition earn-out payables; and (v) Acquisition/Integration Costs.

EBITDAC - Adjusted for 2025 increased 20.4%, or $176 million, from the same period in 2024, to $1,038 million. EBITDAC Margin - Adjusted for 2025 increased to 43.1% from 42.8%. EBITDAC Margin - Adjusted increased due to: (i) the increase in profit-sharing contingent commissions; (ii) Organic Revenue growth; and (iii) leveraging our expense base; while being partially offset by (iv) businesses acquired within the last twelve months that have lower margins than our average segment margins.

Other

As discussed in Note 15 of the Notes to Consolidated Financial Statements, in the Segment Information tables “Other” includes any income and expenses not allocated to reportable segments, and corporate-related items, including the intercompany interest expense charges to reporting segments.

LIQUIDITY AND CAPITAL RESOURCES

The Company seeks to maintain a conservative balance sheet and strong liquidity profile. Our capital requirements to operate as an insurance intermediary are low, and we have been able to grow and invest in our business through a combination of cash that has been generated from operations, the disciplined use of debt and the issuance of equity as part of the purchase price consideration to acquire certain businesses. We have the ability to utilize our Revolving Credit Facility, which as of December 31, 2025 provided capacity for up to $700 million in additional available cash. We believe that we have access to additional funds, if needed, through the capital markets or private placements to obtain further debt financing under the current market conditions. The Company believes that its existing cash, cash equivalents, short-term investment portfolio and funds generated from operations, together with the funds available under the Revolving Credit Facility and the Loan Agreement (the “Loan Agreement"), will be sufficient to satisfy its normal liquidity needs, including principal payments on our long-term debt, for the next 12 months and in the long term.

The Revolving Credit Facility contains an expansion option for up to an additional $500 million of borrowing capacity, subject to the approval of participating lenders. Additionally, the Company may, subject to satisfaction of certain conditions, including receipt of additional term loan commitments by new or existing lenders, increase either Term Loan Commitment under the existing Loan Agreement or the term loans issued thereunder or issue new tranches of term loans in an aggregate additional amount of up to $400 million. Including the expansion options under all existing credit agreements, the Company has access to up to $1,600 million of incremental borrowing capacity as of December 31, 2025.

On February 10, 2026, the Company drew down on the Revolving Credit Facility by $225 million, and the proceeds will be used for general corporate purposes, which may include, among other things, funding for working capital, capital expenditures, repurchases of our capital stock, acquisitions and repayment of our existing debt.

Cash and cash equivalents totaled $1,079 million at December 31, 2025 reflecting an increase of $404 million from the $675 million balance at December 31, 2024. This increase is due to the cash generated during the year and cash assumed in connection with the Transaction.

At December 31, 2025, the Company had approximately $228 million of cash and cash equivalents outside of the U.S. From time to time, the Company will evaluate the repatriation of available funds from our non-U.S. operating subsidiaries or permanently reinvest a portion of those funds in those various territories.

Operating Cash Flows

Our operating cash flows are primarily derived from the net income generated during the period adjusted for non-cash expenses, which include depreciation, amortization, changes in estimated earnout payables, mark-to-market of escrow liability, non-cash stock-based compensation and deferred income taxes while excluding gains and losses on sales/disposals of investments, businesses, fixed assets and customer accounts, payments on acquisition earn-outs in excess of original estimated payables and changes in working capital which relate primarily to the timing of payments of accrued liabilities and receipts of receivables from commissions and fees related to our revenues. Our ratio of current assets to current liabilities (the “current ratio”) was 1.04 and 1.10 for December 31, 2025 and December 31, 2024, respectively.

Cash flows generated from operating activities totaled $1,450 million and $1,174 million for the years ended December 31, 2025 and 2024, respectively, representing an increase of $276 million. Operating cash flows generated in 2025 included $1,067 million from net income before non-controlling interests with $430 million of non-cash adjustments, offset by $47 million from changes in working capital. The growth in cash from operations is primarily due to increased operating margins from organic revenue growth, acquisitions and improved working capital changes.

43

Investing Cash Flows

Cash flows used for investing activities were $7,914 million and $898 million for the years ended December 31, 2025 and 2024, respectively, an increase of $7,016 million.

Acquisitions

During 2025, the Company completed 43 acquisitions (including book purchases) and paid $7,854 million, net of cash, and cash and cash equivalents held in a fiduciary capacity acquired, most notably for the purchases of Accession and Poulton Associates, LLC for $7,463 million and $168 million, respectively. Net cash paid for acquisitions increased $6,964 million in 2025, up from $890 million in 2024.

Dispositions

The Company received cash proceeds from the sale of businesses, fixed assets and customer accounts totaling $9 million and $70 million in 2025 and 2024, respectively. The decrease is attributed to the proceeds received during the second quarter of 2024 of $57 million from the settlement of two of the contingent payments related to the sale of certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023.

Capital Expenditures

Capital expenditures amounted to $68 million and $82 million in 2025 and 2024, respectively, and included purchases of furniture and fixtures, leasehold improvements related to office moves and hardware and software purchases related to information technology investments.

Financing Cash Flows

Cash flows sourced from financing activities totaled $7,713 million and a use of $64 million in 2025 and 2024, respectively, an increase of $7,777 million.

Fiduciary Receivables and Liabilities

Fiduciary cash represents funds in the Company's possession collected from customers to be remitted to insurance companies and funds from insurance companies to be distributed to insureds for the settlement of claims or refunds. The net change in fiduciary cash is represented by the net change in fiduciary liabilities and fiduciary receivables and is presented as cash flows from financing activities in the statement of cash flows. Financing cash flows reflect an increase of $53 million and $191 million in 2025 and 2024, respectively, related to fiduciary receivables and liabilities.

Acquisition Earn-outs

Payments on acquisition earn-outs related to the original acquisition date estimates totaled $143 million and $117 million in 2025 and 2024, respectively.

Dividends

During 2025 and 2024, the Company paid cash dividends of $193 million and $154 million, respectively, an increase of $39 million, 25.3%. On January 21, 2026, the board of directors approved a quarterly cash dividend of $0.165 per share to be paid on February 11, 2026.

Debt

Net proceeds from long-term debt totaled $3,781 million in 2025, compared to net proceeds of $25 million in 2024.

Total debt at December 31, 2025 was $7,613 million net of unamortized discount and debt issuance costs, which was an increase of $3,789 million compared to December 31, 2024. The increase includes the issuance of $4,192 million of senior notes net of the unamortized debt discounts and the amortization of discounted debt related to our various unsecured senior notes and debt issuance cost amortization of $8 million, offset by the addition of deferred debt issuance costs of $36 million, $225 million of payments on outstanding term loan balances and net payments on the Revolving Credit Facility of $150 million.

During the twelve months ended December 31, 2025, the Company repaid $25 million of principal related to the Second Amended and Restated Credit Agreement term loan through the quarterly scheduled principal payments. The Second Amended and Restated Credit Agreement term loan had an outstanding balance of $169 million as of December 31, 2025. The Company's next scheduled principal payment is due in March 2026 and is equal to $6 million.

During the second quarter, the Company repaid the outstanding balance on the Revolving Credit Facility of $400 million with cash on hand. During the third quarter, the Company drew $300 million on the Revolving Credit Facility in connection with the closing of the acquisition of Accession and repaying $100 million during the same quarter, and $100 million during the fourth quarter. There is an outstanding balance of $100 million on the Revolving Credit Facility as of December 31, 2025.

44

The outstanding amounts under the Revolving Credit Facility and associated term loan in total are $269 million in total, and are classified as current liabilities as of December 31, 2025, as the facilities mature within twelve months of the balance sheet date. Although the Company intends to refinance or extend these facilities, no such agreements were in place as of period end.

During the twelve months ended December 31, 2025, the Company repaid $50 million of principal related to the Term Loans issued under the Term A-2 Loan Commitment (“Term A-2 Loans”) through quarterly scheduled principal payments. The Term A-2 Loans had an outstanding balance of $363 million as of December 31, 2025. The Company’s next scheduled principal payment is $13 million due in March 2026.

During the twelve months ended December 31, 2025, the Company repaid the outstanding balance on the Term A-1 Loan Commitment (the “Term A-1 Loan Commitment”) of $150 million related to the Loan Agreement, in accordance with the terms of the Loan Agreement using proceeds from the Revolving Credit Facility in connection with the Second Amended and Restated Credit Agreement.

On June 11, 2025, the Company entered into an Underwriting Agreement with BofA Securities, Inc. and J.P. Morgan Securities LLC, as representatives of the several underwriters named therein, with respect to the offer and sale by the Company of $400 million principal amount of its 4.600% Senior Notes due 2026 (the “2026 Notes”), $500 million principal amount of its 4.700% Senior Notes due 2028 (the “2028 Notes”), $800 million principal amount of its 4.900% Senior Notes due 2030 (the “2030 Notes”), $500 million principal amount of its 5.250% Senior Notes due 2032 (the “2032 Notes”), $1,000 million principal amount of its 5.550% Senior Notes due 2035 (the “2035 Notes”) and $1,000 million principal amount of its 6.250% Senior Notes due 2055 (the “2055 Notes” and, together with the 2026 Notes, the 2028 Notes, the 2030 Notes, the 2032 Notes, and the 2035 Notes, the “Notes”). The Company used the net proceeds of the offering of the Notes, together with the proceeds from the offering of shares of common stock and cash on hand, to fund the cash consideration payable under the Merger Agreement, and to pay fees and expenses associated with the foregoing. As of December 31, 2025, the aggregate outstanding balance of these notes was $4,200 million exclusive of the associated discount balance.

The $400 million principal amount of the Company’s 4.600% Senior Notes due in 2026 is classified as current as of December 31, 2025, reflecting the scheduled maturity within twelve months. The Company expects to repay the notes at maturity.

Total debt at December 31, 2024 was $3,824 million net of unamortized discount and debt issuance costs, which was an increase of $28 million compared to December 31, 2023. The increase includes: the issuance of $600 million senior notes, $150 million of net additions to the Revolving Credit Facility and the amortization of discounted debt related to our various unsecured senior notes and debt issuance cost amortization of $4 million; offset by the repayment of $719 million in senior notes and floating-rate debt balances net of Revolving Credit Facility activity and the addition of deferred financing costs and discount on debt of $7 million.

On October 27, 2021, the Company entered into an amended and restated credit agreement (the “Second Amended and Restated Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S. Bank National Association, Fifth Third Bank, National Association, Wells Fargo Bank, National Association, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc. and Citizens Bank, N.A. as co-documentation agents. The Second Amended and Restated Credit Agreement amended and restated the credit agreement dated April 17, 2014, among certain of such parties, as amended by that certain amended and restated credit agreement dated June 28, 2017 (the “Original Credit Agreement”). The Second Amended and Restated Credit Agreement, among other certain terms, extended the maturity of the Revolving Credit Facility of $800 million and unsecured term loans associated with the agreement of $250 million to October 27, 2026.

During the twelve months ended December 31, 2024, the Company repaid $25 million of principal related to the Second Amended and Restated Credit Agreement term loan through the quarterly scheduled principal payments. The Second Amended and Restated Credit Agreement term loan had an outstanding balance of $194 million as of December 31, 2024.

During the twelve months ended December 31, 2024, the Company repaid $44 million of principal related to the Term Loans issued under the Term A-2 Loan Commitment (“Term A-2 Loans”) through quarterly scheduled principal payments. The Term A-2 Loans had an outstanding balance of $412 million as of December 31, 2024.

During the twelve months ended December 31, 2024, the Company repaid $150 million of principal related to the Term Loans issued under the Term A-1 Loan Commitment (“Term A-1 Loans”). The Term A-1 Loans had an outstanding balance of $150 million as of December 31, 2024.

On February 13, 2024, the Company drew down on the Revolving Credit Facility by $150 million, and the proceeds were used for general corporate purposes. During the nine months ended September 30, 2024, the Company repaid $250 million of the outstanding balance on the Revolving Credit Facility. On October 23, 2024, the Company drew down on the Revolving Credit Facility by $350 million in connection with the acquisition of Quintes Holding B.V. The Company repaid $100 million thereafter, leaving an outstanding balance of $250 million on the Revolving Credit Facility as of December 31, 2024.

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On June 11, 2024, the Company completed the issuance of $600 million aggregate principal amount of 5.650% senior notes due 2034 (the “2034 Senior Notes”). The net proceeds to the Company from the issuance of the 2034 Senior Notes, after deducting underwriting discounts and estimated offering expenses, were approximately $593 million. The 2034 Senior Notes were given investment grade ratings of BBB- stable outlook and Baa3 positive outlook. The 2034 Senior Notes will mature in June 2034. Interest on the 2034 Senior Notes is payable semi-annually in arrears. The 2034 Senior Notes are senior unsecured obligations of the Company and rank equal in right of payment to all of the Company’s existing and future senior unsecured indebtedness. The Company may redeem the 2034 Senior Notes in whole or in part at any time and from time to time, at the “make whole” redemption prices specified in the prospectus supplement for the 2034 Senior Notes being redeemed, plus accrued and unpaid interest thereon. In September 2024, the Company used a portion of the proceeds from the 2034 Senior Notes to repay $500 million of the 4.200% senior notes due September 2024. In June 2024, the Company also used $100 million of the proceeds to repay a portion of an outstanding term loan balance. As of December 31, 2024 there was a total outstanding debt balance of $600 million exclusive of the associated discount balance on the 2034 Senior Notes.

Common Stock

On June 10, 2025, the Company entered into an Underwriting Agreement with J.P. Morgan Securities LLC and BofA Securities, Inc., as representatives of the several underwriters named therein, with respect to the offer and sale by the Company of 43,137,254 shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”) at a per share offering price of $102.00 for an aggregate purchase price for net proceeds of $4,315 million after underwriting discounts and fees and expenses. The Company closed the offering of the shares of Common Stock on June 12, 2025. The Company used the net proceeds of the offerings of the shares of Common Stock and the Notes, together with cash on hand, to fund the cash consideration payable under the Merger Agreement and to pay fees and expenses associated with the foregoing.

As part of the consideration for the Transaction, the Company issued approximately $1,045 million of its common stock, par value $0.10 per share, to the selling shareholders, a portion of which is held in escrow, based on the market value of the shares at closing. The number of shares issued was calculated using the Company’s closing stock price of $110.57 per share on June 6, 2025.

Excluding the shares issued to the selling shareholders as consideration for the Accession acquisition, during 2025, the Company issued 271,532 shares valued at $21 million associated with business combinations. During 2024, the Company did not issue shares associated with business combinations.

On October 22, 2025, the board of directors approved an additional $1,251 million increase to our existing share repurchase authorization, bringing our total remaining repurchase capacity at that time to approximately $1,500 million of the Company's outstanding common stock.

During 2025, the Company repurchased 1,255,970 shares at an average price of $79.62 for a total of $100 million. During 2024, the Company did not repurchase any shares.

Contractual Cash Obligations

As of December 31, 2025, our contractual cash obligations were as follows:

Payments Due by Period

(in millions)

Total

Less Than

1 Year

1-3 Years

4-5 Years

After 5

Years

Long-term debt

$

7,682

$

719

$

813

$

1,150

$

5,000

Other liabilities(1)

903

32

657

37

177

Operating leases(2)

377

74

129

83

91

Interest obligations

4,181

376

649

561

2,595

Maximum future acquisition contingency payments(3)

842

405

437

—

—

Total contractual cash obligations(4)

$

13,985

$

1,606

$

2,685

$

1,831

$

7,863

(1)
Includes the escrow liability which is included within “Other Long-Term Liabilities” issued in connection with the Transaction. The liability reflects the fair value of shares and cash held in escrow to secure certain indemnification obligations of the Accession equityholders related to businesses that are in run-off or discontinued. Once all claims related to certain indemnification matters described in the Merger Agreement are resolved, the remaining amount in the escrow account will be released to the equityholders. The fair value of the escrow liability is remeasured at each reporting date, with changes recognized in earnings. The timing and amount of any future settlement remains subject to the achievement of contractual milestones and may vary from the amounts disclosed. The value as of December 31, 2025 was $616 million.

(2)
Includes $37 million of future lease commitments expected to commence in 2026.

(3)
Includes $541 million of current and non-current estimated earn-out payables. Earn-out payables for acquisitions not denominated in U.S. dollars are measured at the current foreign exchange rate. Certain acquisition agreements include provisions with no maximum potential earn-out amount. The amount recorded for these acquisitions as of December 31, 2025 is $385 million.

(4)
Does not include approximately $56 million of current liability for a dividend of $0.165 per share approved by the board of directors on January 21, 2026 and paid on February 11, 2026.

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