Greetings, welcome to the BRP Group, Inc. first quarter 2023 earnings call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bonnie Bishop, Executive Director of Investor Relations. Please go ahead, ma'am. Thank you, operator. Welcome to the BRP Group's first quarter of 2023 earnings call. Today's call is being recorded. First quarter financial results, supplemental information and Form 10-Q were issued earlier this afternoon and are available on the company's website at ir.baldwinriskpartners.com. Please note that remarks made today may include forward-looking statements subject to various assumptions, risks and uncertainties. The company's actual results may differ materially from those contemplated by such statements. For a more detailed discussion, please refer to the note regarding forward-looking statements in the company's earnings release and to our most recent Form 10-Q, both of which are available on the BRP website. During the call today, the company may also discuss certain non-GAAP financial measures. For a more detailed discussion of these non-GAAP financial measures and historical reconciliation to the most closely comparable GAAP measures, please refer to the company's earnings release and supplemental information, both of which have been posted on the company's website at ir.baldwinriskpartners.com. I would like to remind everyone that effective January 1, 2023, and as reflected in our reporting for the quarter, BRP now operates with three segments versus the four we have reported on historically as our legacy Medicare segment was merged into Main Street Insurance Solutions. Additionally, our legacy middle market segment has been rebranded to Insurance Advisory Solutions, and our legacy specialty segment has been rebranded to Underwriting, Capacity & Technology Solutions. I will now turn the call over to Trevor Baldwin, Chief Executive Officer of BRP Group. Thanks, Bonnie. Good afternoon, everyone, and thank you for joining our first quarter earnings call. I will start with a few remarks, followed by Brad, who will address select financial and business highlights from the quarter. Brad, Chris and I will answer questions. We had a strong start to the year, highlighted by organic growth of 23%, building on 16% organic growth in the first quarter of 2022, and representing the highest first quarter organic growth since our IPO, driven by outstanding performance across our business. We achieved total revenue growth of 36% year-over-year, showcasing the continued strong client demand for our advice and solutions across the platform. Adjusted EBITDA was $79 million, in line with our expectations. Insurance Advisory Solutions, formerly Middle Market, had strong organic growth of 14%, benefiting from robust new business and rate and exposure lift that exceeded expectations. Underwriting, Capacity & Technology Solutions, formerly our specialty segment, grew 56%. Our MGA of the Future platform again performed exceptionally well. Standouts included outstanding growth in our multifamily product suite, continued acceleration in the build-out of our homeowners business, and outsized growth from our habitational-focused commercial umbrella program that joined MSI via our 2021 partnership with JGS that now fully flows through organic growth. In Main Street Insurance Solutions, we saw organic growth of 20% in the first quarter. Westwood, which joined in May of 2022 as the largest acquisition in the history of BRP, continues to perform exceptionally well despite headwinds in the US residential real estate market. Through the end of April, which represents their first full year with BRP, Westwood generated approximately $112 million of annualized gross revenue, up 36% from the $82 million run rate that we underwrote at the time of the closing last year. Year one of the Westwood partnership has been a significant success and is a testament to the strength of the franchise Alan and his team have built. We believe the Westwood team has a very bright future ahead. Over the past three years, we've invested heavily in building capabilities that will power long-term organic growth and free cash flow generation. These investments included the addition of many talented colleagues and a significant technology build-out to position us for a more digital and tech-enabled future. To frame the significance of the scale of these investments, we more than doubled the size of our colleague base over the past two years, adding approximately 1,000 net new colleagues per year. As I shared during our call in February, we have concluded this major reinvestment cycle in our business and shortly will have fully absorbed the run rate payroll from prior year headcount growth. While we are just beginning to see the benefits of these investments in our organic growth. We expect to begin seeing these investments earning into our margin and earnings profile this year, and believe that the structural advantages these investments have enabled will yield sustainable revenue growth and operational efficiency over the long term. To give you a sense for the more normalized rate of growth in headcount necessary to sustain our top line growth momentum through the first four months of 2023, we added a net total of approximately 40 new colleagues, which represents a rate that we believe is sufficient to support our current top line growth trajectory for the next 18 to 24 months. We continue to remain opportunistic with respect to the M&A marketplace, but reaffirm that we do not currently expect to execute any material partnerships in 2023, as we remain committed to deleveraging and continue to expect the market to soften over the balance of 2023, a trend we are starting to see. Price transparency takes time, and it is our current belief that if we are patient, we will see a better environment into which we can put shareholder capital to work. In summary, we once again delivered high organic growth, a direct result of the value our colleagues continued to deliver to clients day in and day out. Despite stress in certain areas of the insurance marketplace, our diversified and resilient business model continues to allow us to execute for all our stakeholders. I'd like to thank our clients for their trust and confidence, and our colleagues for tirelessly driving the positive client outcomes that result in our strong performance. With that, Brad will detail our financial results. Thanks, Trevor. Good afternoon, everyone. For the first quarter, we generated revenue growth of 36% to $330 million. We generated organic growth in the first quarter of 23%, with all three reporting segments generating double-digit organic growth in the quarter. In Q1, we paid down the revolver by $20 million. Looking through the balance of the year, we expect the combination of our organic growth and continued free cash flow generation will reduce leverage to 4.5x or less back within our stated long-term range. We recorded a GAAP net loss for the first quarter of $25.9 million or $0.24 per fully diluted share. Adjusted Net Income for the first quarter of 2023, which excludes share-based compensation, amortization, and other one-time expenses, was $49.2 million or $0.42 per fully diluted share. A table reconciling GAAP net loss to Adjusted Net Income can be found in our earnings release and our Form 10-Q filed with the SEC. Adjusted EBITDA for the first quarter rose 8% to $79 million compared to $73 million in the prior year period. Adjusted EBITDA margin was 24% for the quarter compared to 30% in the prior year period. This margin decline was due to the change of seasonality in our business and recognizing a significant proportion of the approximately $46 million of incremental annualized payroll expense from prior year headcount growth that had not yet been fully absorbed. The changes in seasonality are primarily due to the Westwood partnership, as well as large partnerships closed in the fourth quarter of 2021 that have resulted in adjusted EBITDA margin that is now approximately six points lower in Q1, and which we expect to be higher for the remaining quarters, resulting in full year margin expansion. For the full year 2023, we now expect organic growth in the mid-teens, higher than our previous guidance of the high end of 10%-15%, and which, based on the performance we are seeing across our business year to date, includes an expectation for mid-teens organic growth in Q2. Additionally, we now expect full year revenue of $1.16 billion-$1.19 billion, higher than the previously stated range of $1.14 billion-$1.17 billion. We are raising our adjusted EBITDA expectations to $255 million-$265 million, up from $250 million-$260 million stated previously. For the second quarter of 2023, we expect adjusted EBITDA to be between $55 million-$60 million and adjusted EPS of $0.27-$0.29 per share. These expectations reflect strong growth despite our anticipation of a continued challenging macro backdrop, which includes the potential for ongoing dislocation in the banking system and potential for pullback in credit from impacted institutions, as well as higher interest rates relative to recent years. Despite these headwinds, we delivered record first quarter 2023 results, which reinforce our confidence that the investments of the last few years will drive operating leverage, revenue growth, and durable cash flow for years to come. We will now take questions. Operator? Thank you, sir. We will now be conducting a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate you are in the question queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. You may press star and then two if you would like to remove your question from the queue. Again, if you would like to ask a question, please press star and then one now. The first question we have is from Meyer Shields from KBW. Please go ahead. Great. Thank you. Trevor, if I could start, you talked about expectations of continued softening, and I was hoping you could flesh that out a little bit, because while some of that seems to be manifesting in, let's say, D&O, there are also sort of widespread expectations of a re-accelerating hard market in property. I was hoping you could break down what you're seeing right now in that context. Yeah. Hey, Meyer. Good evening. The softening was a comment specific to pricing in the M&A marketplace relative to valuation. You know, what I would say about that is that, while headline multiples being paid have not really come down meaningfully, what we have seen is that pro forma EBITDA margin that deals are transacting off of has compressed, you know, approximately 300 basis points based on the data that we've seen. While not a headline multiple compression, it does. You know, that is a reduction in price. I think to your point on insurance pricing, you know, I'd say there's some limited pockets of softening a la public D&O, you know, workers' compensation. Broadly speaking, I'd say, you know, the property insurance marketplace is the most challenging our professionals have seen in their career. You know, insurance lines, generally speaking, you know, are all seeing positive pricing pressure. Okay. I completely missed what you said then. Thanks for the clarification. On that last note, though, I was hoping you could talk a little bit about the potential for market share gains because of the complexity of the property market. I hear that as a concept a lot, and I was hoping that you could talk about what's actually going on in the marketplace. Yeah. No, it's a great question, Meyer, this is exactly the type of market that we really do exceptionally well in. Complexity and challenges in the market, they lend themselves to the benefit of larger, more sophisticated platforms. The depth and breadth of our talent, the sophistication of the tools and resources that we can bring to bear on behalf of our clients, they make a bigger difference today than they would in a more benign market. That's showing too in our results. I mean, obviously, the headline OG of 23%, you know, up meaningfully year-over-year from the prior quarter, you know. As I break down the underlying components of that organic growth, it becomes an even better story. As we've talked about in the past, we really view there to be kind of four drivers to organic growth. From my perspective, the first and the most important is new business. How many new clients did you win? What's the market share you're taking? When you look at the building blocks of our organic growth of 23.4%, 21.4 of that 23 came from winning new clients. The vast majority of our organic growth is being driven by net new client logos, and that's up from 16.4% in the prior year period. Other than that, the persistency, you know, continues to be strong and in line with year-over-year. You know, the impact from growth and contingents is relatively nominal. The impact from rate and exposure was +4.1%, up nominally from 4.0% in the prior year period. I think it's a good story and speaks to, you know, this is the type of market where we can really take share. All right. That was phenomenal. Thank you so much. Thanks, Meyer. The next question we have is from Elyse Greenspan from Wells Fargo. Please go ahead. Thanks. Good afternoon. My first question, so Trevor, you mentioned you guys hired 40 new colleagues to support your growth over the next 18 to 24 months. Does that mean that you don't expect incremental hiring from here? Was the comment meant to imply that you front-loaded the hiring, you know, given the growth that you see in front of you? Let me parse through that, Elyse. What I shared is through April, we've hired net 40 colleagues into the business, and that is a good run rate expectation of the ongoing hiring need of the business in order to support the continued high level of organic growth. The contrast is that is, you know, we're not hiring the net 1,000 plus colleagues a year that we have been for the past two and a half years. As you know, we went through a three year period of significant reinvestment program into talent and technology, building the platform for the future. Our, our platform is built, our infrastructure is ready. We've been building the solutions, the product sets, the capabilities and the intelligent automations kind of throughout our go-to-market and business processes, and we're ready to scale effectively and efficiently from here. That's helpful. You know, you guys gave this mid-teen organic growth guidance for the second quarter. Can you give us a sense of, you know, what's embedded within that guide for your, you know, three segments? Yeah. I mean, we don't provide guidance at the segment level, Elise. What I would tell you is that, you know, what's implicit in that guide is continued, you know, high-level performance across all three of our segments. You know, baked into that guide is the expectation of a continued challenging macro backdrop. You know, I think everybody's aware of the dynamics relative to the banking industry, credit capacity drying up, you know, interest rates having moved 500 basis points over the course of the past year. You know, there's known impacts and there's some unknown impacts. Largely our clients are still performing well. There's pockets of softness in a couple of industry sectors, but all that's built into that, the expectations we set for the balance of the year. You know, I think that just speaks to the kind of remarkable resiliency of this industry, and then more specifically, how well-positioned our platform is to take share and continue to add value for our clients. You guys mentioned you paid down the revolver by $20 million in the quarter. I think you guys, Brad, usually will give us, like, a sense of, you know, where interest expense should trend at current rates. Do you have a sense, do you wanna just kind of set expectations there? Yeah. There's been obviously a slight tick-up in the rate environment since our last call. Now we would project net cash interest expense of approximately $105 million-$110 million at the current base rates. Thank you. Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. The next question we have is from Adam Klauber from William Blair. Please go ahead. Thanks. Sorry if you mentioned earlier, but, you know, could you discuss, you know, how Westwood is going, you know, given, you know, it seems like housing, new housing is coming back? I guess if you could give us some indication, if you haven't. Sorry if I missed it. Yeah. No, Adam, happy to. As I'd mentioned, you know, earlier in the call, through April, Westwood generated approximately $112 million of gross revenue, up about 37% from what we underwrote when we closed on that transaction, you know, a year ago. Nothing... I mean, just absolutely exceptional performance from Alan and the team there. You know, more specifically to how's that business performing today and how do we expect it to continue to perform over the balance of the year. The short answer is we feel really good about how we're positioned and their ability to continue to deliver double-digit growth for the balance of the year. As we look at kind of, you know, the dynamics in play there, while new home closings are down slightly, our new policies sold is up mid-single digits, largely as a result of an increase in our attachment rate to the new homes that are being sold through our buyer builder partners, as well as new business premium, which is in the, you know, up mid-single digits, you know, for that same reason, as well as rates that's being taken in the book. You know, we feel well positioned, based on, you know, what we're seeing from a lead flow standpoint. You know, we would expect the business to continue to perform very strong through the balance of the year. I think it's, again, it just speaks to the resilience of our industry, the Westwood platform, more specifically in the value they're able to add at point of transaction, which is, you know, is represented in the increased attachment rates we're seeing to those new homes sold. Great. You mentioned, you know, rates. Obviously, rates are up in homeowners. I think you mentioned, is that a nice tailwind on the renewal book and, you know, even just a ballpark, how much is that, you know, that helping on the, you know, increase, you know, increase premium rates on the renewal book? Yeah, there's no doubt it's helping, Adam. You know, we're seeing policy level persistency in the mid to high 80s, we're seeing kinda low teens rate impact on the book. When you put that in a blender, you know, premium retention on our renewal book covering around 100%. Great. That's a great sign. Switching over to the margin for a second, I know there's, you know, a lot of seasonal variation, so it's a little, you know, we expect some back and forth. Any way you can give us direction on, you know, which quarters we can expect to be stronger over the next couple quarters on a margin standpoint? Yeah, Adam. It's Brad. you know, we'll continue to give a total EBITDA guide in each of the subsequent quarters similar to what we did on this call. I would just say largely we do expect margin expansion on the full year and to sort of cover up the degradation we saw because of the seasonality in Q1. Okay. Okay. Sorry, this is a real, I guess, small question. In net income to EBITDA, you had other add back of $12 million to other to net income. Last quarter was $14 million. What sort of items are going in there? Are you referencing the combination of transaction related and other, Adam? It's the item that's 12, like $12.3 million this quarter. I have other add back and adjusted EBITDA $7.3 million. On working net income. Yeah. Yeah. On EBITDA. Yeah, I think I've got. Yeah. Yeah, I think that's the same one. Yeah, I assume that's the same one. Yeah. What's captured there is, you know, one-time costs. We continue to work on advanced data strategy. We've got some outside temporary help in there as well as some recruiting fees on some significant hires we made throughout Q1, as well as some one-time legal fees and other one-time costs. Okay. Okay. That's helpful. As far as, cash, the first quarter is in the industry, it's always, you know, a more challenging quarter cash flow. That makes sense. I guess like two related questions. Do you think cash flow is gonna be start turning positive in the next couple quarters? Well maybe just start with that one, I'll ask the next one. Yeah, Adam, just wanted to direct you to page three of our supplement and walk through the free cash flow calculation a little bit. Yeah, as you mentioned, the first quarter's always a little challenging. We've got, you know, bonus payouts from prior year. In addition, we recognize large AR for our employee benefits renewals that occur in Q1, but the associated AP doesn't show up because a lot of times those are directly billed by the carrier. You do get a bit of a timing impact to Q1 and as you said, you see that across our competitors. If you look, that's one of the reasons we calculate adjusted free cash flow. You can see the adjusted is down about 70% year-over-year. That's really entirely interest driven. You can see we added a calculation this quarter just to show the impact of cash interest on our business. You can see if you back that out, we're actually up about 17%. You know, we are from a business standpoint, seeing expanded cash flow. As I mentioned, there are some timing differences there in Q1. Again, you're not looking for exact guidance, but, you know, should that, you know, should that begin turning around, you know, second, third quarter, you think? We do expect for the full year to be generating, as we said previously, between $100 million and $120 million of free operating cash flow. Okay. Okay. Next question related, but in it, you know, first quarter is weak, so it always looks a little more disproportion. You know, Cash and cash equivalents, if I'm right, around $81 million. What's the minimum that you like to operate with as far as cash and cash equivalents? Yeah. Our minimum would be about $60 million, that we could operate with comfortably. Okay. Okay. Well, I'll just ask. Well, I'll ask. Are you expecting that to come up as cash flow turns positive, or are you looking at outside sources? I mean, we'll manage working capital and utilize that free cash flow to the extent we can to pay down the revolver and reduce our interest expense and be opportunistic about that. Yeah, Adam, this is Trevor. Okay. I think the point to take there is, you know, we can run super efficiently from a working capital standpoint, our intent is to continue to, you know, sweep excess free cash flow under the revolver to reduce outstanding debt. That can, you know, we can come in and out of that working capital line as needed. Sure. Okay. Yeah. Yeah. Super helpful. Thanks, guys. Thanks, Adam. The next question we have is from Pablo Singzon from JP Morgan. Please go ahead. Hi. Thanks. First question is for Trevor. I just wanted to follow up on your comment about hiring. I was hoping you could flesh out the leverage implicit in the business model today. You know, I presume co-compensation doesn't track revenue growth one for one, and I was hoping you could provide more context on that point. I guess more broadly, do you expect leverage in the comp line as well as in the OpEx line? Thanks. Yeah. The short answer, Pablo Singzon, is we do expect leverage in both the comp and OpEx line. You know, as we've talked about, we kind of at the conclusion of a three year reinvestment cycle that was significant as we built out the talent base and the technology infrastructure to propel us forward in our vision of delivering durable double-digit organic growth and significant free cash flow and earnings leverage. We are, you know, in the beginning, early days of kind of earning in that significant reinvestment, which, you know, we'll earn in over approximately three years, and we expect to see meaningful, you know, margin accretion and productivity enhancement as we continue to grow the business onto that platform that we've built. Okay. The second question is for Brad, just to follow up on Adam's question about, I guess other expenses, right? Other expenses and M&A expenses or integration expenses, should we assume that persists through 2023? If yes, do you have a view on how much those expenses would be? Yes. Look, we are meaningfully down from Q4, but the Q1 amount, I think is a good expectation of the run rate for 2023 in terms of both integration and other type one-time expenses. Okay. Pablo- And then the last- We would expect it to come down pretty meaningfully next year. You know, that's largely tied to the, you know, the transition of Westwood out of the QBE platform. Yep, understood. The last question for me, I guess for Brad, how much cash earn outs do you expect to pay out in 2023? Thank you. Yeah. The pure cash earn out that we'd expect to pay in 2023 would be somewhere between $45 million and $50 million. Got it. Thank you. Thanks, Pablo. Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. The next question we have is from Joshua Shanker from Bank of America. Please go ahead. Yeah, thank you. I'm gonna try, Adam's questions again. Just, you know, you guys have better information than I do. Is the seasonality playing out the exact way you thought it would in terms of adjusted operating margins at the beginning of the year? I got it wrong, but you guys probably got it right. Is everything going according to plan? Yes, it is. We can look at the 1Q 2023 seasonality and move that forward to 1Q 2024 as we think about how it's gonna... its role in the play out of how you earn the expenses and the revenues? Yes. Given that and the lightness of the margin in 1Q, is that because expenses are heavy at Westwood or expenses are heavy and, revenues are lighter than the rest of the year? It is both. It's both. Okay. Are there any, I guess as we think forward, which quarter do you expect to have the highest, I guess, adjusted margins in the year? Yeah, Josh, we're not gonna provide quarter by quarter guidance yet. As Brad shared, we'll continue to share an EBITDA, and growth expectation for the following quarter on each call. Okay. I tried my best. Thank you. Thank you. The last question we have is from Weston Bloomer, from UBS. Please go ahead. Hi. Thank you. I was hoping you could expand on the growth that you saw in Specialty this quarter. I'm not sure if you're giving organic specifically for MGA or other lines, but maybe could you break out how much of the business is currently renters today versus, you know, from other lines of business? I think at your investor day, you said the umbrella and residential was around $300 million in premium. Any updates there would be great. Thank you. Hey, Weston. What I would tell you is, I mean, renters is certainly represents a minority of the premium and revenue that we're generating in the MGA. You know, while it's still continuing to grow exceptionally well, the good news is some of the recent products we've brought online are growing even faster, which is, you know, really proving out our strategy of building that conveyor belt of new products that we can be launching each and every year to continue to drive a growth factory as we build more and more proprietary products. I would expect renters to continue to become, you know, a smaller proportion of the overall premium we place and the revenue we generate, but continue to be a meaningful and important source of growth and value in the MGA overall. Great. On your comment, that 21% of the organic was from winning new clients, is that pretty broad-based by segment or is it specialized in one segment or any geographic focus? That's pretty broad-based. If you look at kind of new business, you know, and its contribution to OG as a relative kind of proportion, that's fairly consistent across the segments. You know, that's really the story of how we drive the outsized organic growth we do, is we take market share, and we just win more new business than our peers do. Got it. I know Medicare is within the broader Mainstreet segment now, but with 1 Q being kind of in the active enrollment season, can you just give an update on the success of that business? Yeah. They had a good, you know, real solid annual enrollment period and, you know, we continue to expect strong results out of that part of the Main Street Insurance Solutions segment. Great. Thank you. Thank you, sir. There are no further questions at this time. I would now like to turn the floor back over to Trevor Baldwin for closing comments. Please go ahead, sir. I'd like to thank everyone for joining us on the call this evening. I wanna thank our 4,000 colleagues for their commitment, their hard work and dedication to Baldwin's Partners. I look forward to speaking with all of you next quarter. Thank you, sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.