2024 BPS Study_Final (8.16.24)

AGENCIES WITH REVENUES OF:

AVERAGE

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

Pre-Tax Profit

25.3% 25.5%

23.3% 24.4%

24.2% 26.5%

20.4% 22.5%

20.1% 21.3%

14.0% 14.7%

Pro Forma Pre-Tax Profit

EBITDA

26.8%

26.9%

27.1%

23.8%

23.5%

19.9%

Pro Forma EBITDA 1

27.5%

28.8%

30.0%

24.8%

25.8%

21.4%

AGENCIES WITH REVENUES OF:

TOP QUARTILE

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

Pre-Tax Profit

35.3% 33.6%

32.0% 33.6%

34.5% 36.2%

31.0% 30.8%

25.7% 28.0%

21.6% 20.8%

Pro Forma Pre-Tax Profit

EBITDA

36.3%

34.6%

35.9%

31.6%

30.8%

26.2%

Pro Forma EBITDA 1

32.5%

34.4%

38.2%

31.1%

33.0%

26.3%

1 Pro Forma EBITDA excludes all administrative expenses (depreciation, amortization of intangibles, officer life, interest and other).

Rule of 20

AGENCIES WITH REVENUES OF:

<$1.25M $1.25-$2.5M $2.5-$5M $5-$10M $10-$25M >$25M

The Rule of 20:

Low

-11.4 23.4 46.1 31.5

3.8

-3.8

7.2

1.1

-1.2

Average

26.8 47.3 36.0

25.5 42.9 32.4

26.4 45.2 34.0

24.8 41.6 32.4

21.7 45.6 27.0

High

Top Quartile

The Rule of 20 measures an agency's shareholder returns. It is calculated by adding 50% of an agency's Pro Forma EBITDA margin to its organic commission and fee growth rate. An outcome of 20 or higher means an agency is likely generating, through profit distributions and / or share price appreciation, a shareholder return of approximately 15% - 17%, a typical agency / brokerage return under normal market conditions.

Rule of 20

36.0

34.0

32.4

32.4

31.5

27.0

26.9

26.8

26.4

25.5

25.3

24.8

24.5

24.3

23.4

22.4

22.3

21.7

< $1.25M

$1.25-$2.5M

$2.5-$5M

$5-$10M

$10-$25M

> $25M

2023 BPS Average 2024 BPS Average 2024 BPS Top Quartile

Cross Category Comparison

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