Insurance brokerage firm Brown & Brown (NYSE: BRO) missed Wall Street’s revenue expectations in Q2 CY2026, but sales rose 30.4% year on year to $1.68 billion. Its non-GAAP profit of $1.07 per share was in line with analysts’ consensus estimates.

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Company Overview

With roots dating back to 1939 and operations spanning 44 U.S. states and 14 countries, Brown & Brown (NYSE: BRO) is an insurance brokerage and risk management firm that markets and sells insurance products across property, casualty, and employee benefits sectors.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $6.79 billion in revenue over the past 12 months, Brown & Brown is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Brown & Brown grew its sales at an incredible 18.9% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows Brown & Brown’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Brown & Brown’s annualized revenue growth of 22.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Brown & Brown pulled off a wonderful 30.4% year-on-year revenue growth rate, but its $1.68 billion of revenue fell short of Wall Street’s rosy estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.9% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above the sector average and suggests the market sees some success for its newer products and services.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Brown & Brown has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 25.4%.

Analyzing the trend in its profitability, Brown & Brown’s operating margin decreased by 2.2 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Brown & Brown’s astounding 16.9% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Although it performed well, Brown & Brown’s two-year annual EPS growth of 15% lower than its 22.4% two-year revenue growth.

We can take a deeper look into Brown & Brown’s earnings quality to better understand the drivers of its performance. A two-year view shows Brown & Brown has diluted its shareholders, growing its share count by 18%. This has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, Brown & Brown reported adjusted EPS of $1.07, up from $1.03 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Brown & Brown’s full-year EPS to grow 4.2% from $4.44 to $4.63.

Key Takeaways from Brown & Brown’s Q2 Results

We struggled to find many positives in these results. Overall, this was a softer quarter. The stock traded down 4.2% to $66.33 immediately following the results.

Brown & Brown’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).