1) Financial Performance Overview
- Total revenues for Q1 2026 reached $1.9 billion, a 35.4% increase YoY. - Organic revenue growth was flat YoY, with a 2.2% increase when including contingent commissions. - Adjusted EBITDAC margin improved by 40 basis points to 38.5%. - Adjusted earnings per share rose by 7.8% to $1.39. - Cash flow from operations exceeded $260 million, marking a 23% increase from the previous year.

2) Segment Results
- Retail Segment: Revenues grew by 33.4%, with organic growth including contingents at 1.3%. EBITDAC margin decreased by 130 basis points to 36% due to integration impacts and litigation with a startup broker. - Specialty Distribution: Revenues increased by 40%, with organic growth including contingents at 3.9%. EBITDAC margin rose by 30 basis points to 40.8% driven by higher contingent commissions.

3) Market Conditions and Challenges
- The commercial insurance market remains stable, but CAT property rates have declined further, impacting organic growth metrics. - The company faced challenges from prior year flood claims processing revenue, which negatively affected organic growth by nearly 100 basis points. - Geopolitical issues and rising oil prices have led customers to adopt a more cautious outlook.

4) Operational and Strategic Initiatives
- The company is enhancing its technology and data capabilities, focusing on AI to improve customer experience and operational efficiency. - A shift in the pharmacy consulting revenue model from volume-based to a per-employee-per-month (PEPM) model is expected to negatively impact organic growth by 50 to 100 basis points in the near term. - Integration of the Accession acquisition is on track, with expected EBITDA synergies of $30 million to $40 million this year.

5) Guidance and Outlook
- The company anticipates modest organic growth improvement each quarter in 2026, with expectations for stronger growth in the second half of the year as integration efforts take effect. - The outlook for contingent commissions is positive, with expectations for overall growth compared to the previous year. - There is uncertainty regarding CAT property rates, which could impact future performance.

Bottom line: Brown & Brown delivered solid financial results in Q1 2026, with strong revenue growth driven by acquisitions and contingent commissions. However, challenges in the CAT property market and changes in the pharmacy consulting model may temper organic growth in the near term. The focus on technology and integration positions the company for improved performance in the latter half of the year, making it a potentially attractive investment for shareholders.