Arthur J.Gallagher & Co.
10/30/2025 | Press release | Distributed by Public on 10/30/2025 14:53
ARTHUR J. GALLAGHER & CO. ANNOUNCES THIRD QUARTER 2025 FINANCIAL RESULTS (Form 8-K)
ARTHUR J. GALLAGHER & CO. ANNOUNCES
THIRD QUARTER 2025 FINANCIAL RESULTS
ROLLING MEADOWS, IL, October 30, 2025 - Arthur J. Gallagher & Co. (NYSE: AJG) today reported its financial results for the quarter ended September 30, 2025. Management will host a webcast conference call to discuss these results on Thursday, October 30, 2025 at 5:30 p.m. ET/4:30 p.m. CT. To listen to the call, and for printer-friendly formats of this release and the "CFO Commentary" and "Supplemental Quarterly Data," which may also be referenced during the call, please visit ajg.com/IR. These documents contain both GAAP and non-GAAP measures. Investors and other users of this information should read carefully the section entitled "Information Regarding Non-GAAP Measures" beginning on page 9.
| Summary of Financial Results - Third Quarter | ||||||||||||||||||||||||||||||||
| Revenues Before | Diluted Net Earnings | |||||||||||||||||||||||||||||||
| Reimbursements | Net Earnings (Loss) | EBITDAC | (Loss) Per Share | |||||||||||||||||||||||||||||
|
Segment |
3rd Q 25 | 3rd Q 24 | 3rd Q 25 | 3rd Q 24 | 3rd Q 25 | 3rd Q 24 | 3rd Q 25 | 3rd Q 24 | ||||||||||||||||||||||||
| (in millions) | (in millions) | (in millions) | ||||||||||||||||||||||||||||||
|
Brokerage, as reported |
$ | 2,922.9 | $ | 2,396.4 | $ | 410.4 | $ | 383.0 | $ | 840.3 | $ | 691.5 | $ | 1.57 | $ | 1.70 | ||||||||||||||||
|
Net losses (gains) on divestitures |
8.1 | (22.5 | ) | 6.0 | (16.8 | ) | 8.1 | (22.5 | ) | 0.02 | (0.07 | ) | ||||||||||||||||||||
|
Acquisition integration |
- | - | 49.1 | 36.3 | 66.0 | 48.7 | 0.19 | 0.16 | ||||||||||||||||||||||||
|
Workforce and lease termination |
- | - | 15.9 | 36.2 | 21.3 | 48.5 | 0.06 | 0.16 | ||||||||||||||||||||||||
|
Acquisition related adjustments |
- | - | 46.9 | 1.8 | 45.9 | 31.5 | 0.18 | 0.01 | ||||||||||||||||||||||||
|
Amortization of intangible assets |
- | - | 162.8 | 120.0 | - | - | 0.63 | 0.54 | ||||||||||||||||||||||||
|
Effective income tax rate impact |
- | - | - | (2.9 | ) | - | - | - | (0.01 | ) | ||||||||||||||||||||||
|
Levelized foreign currency translation |
- | 14.1 | - | 1.6 | - | 2.5 | - | 0.01 | ||||||||||||||||||||||||
|
Brokerage, as adjusted * |
2,931.0 | 2,388.0 | 691.1 | 559.2 | 981.6 | 800.2 | 2.65 | 2.50 | ||||||||||||||||||||||||
|
Risk Management, as reported |
402.1 | 369.7 | 49.5 | 44.6 | 82.0 | 74.1 | 0.19 | 0.20 | ||||||||||||||||||||||||
|
Net (gains) on divestitures |
(0.2 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.2 | ) | (0.1 | ) | - | - | ||||||||||||||||||
|
Acquisition integration |
- | - | 1.7 | 0.6 | 2.4 | 0.9 | 0.01 | - | ||||||||||||||||||||||||
|
Workforce and lease termination |
- | - | 2.4 | 1.4 | 3.4 | 2.0 | 0.01 | 0.01 | ||||||||||||||||||||||||
|
Amortization of intangible assets |
- | - | 2.7 | 2.7 | - | - | 0.01 | 0.01 | ||||||||||||||||||||||||
|
Levelized foreign currency translation |
- | (1.5 | ) | - | (0.1 | ) | - | (0.2 | ) | - | - | |||||||||||||||||||||
|
Risk Management, as adjusted * |
401.9 | 368.1 | 56.2 | 49.1 | 87.6 | 76.7 | 0.22 | 0.22 | ||||||||||||||||||||||||
|
Corporate, as reported |
0.4 | 0.4 | (186.3 | ) | (113.5 | ) | (109.4 | ) | (74.7 | ) | (0.72 | ) | (0.51 | ) | ||||||||||||||||||
|
Transaction-related costs |
- | - | 35.7 | 6.6 | 34.2 | 8.9 | 0.14 | 0.03 | ||||||||||||||||||||||||
|
Legal & tax related |
- | - | 8.2 | 3.5 | 23.6 | - | 0.03 | 0.02 | ||||||||||||||||||||||||
|
Corporate, as adjusted * |
0.4 | 0.4 | (142.4 | ) | (103.4 | ) | (51.6 | ) | (65.8 | ) | (0.55 | ) | (0.46 | ) | ||||||||||||||||||
|
Total Company, as reported |
$ | 3,325.4 | $ | 2,766.5 | $ | 273.6 | $ | 314.1 | $ | 812.9 | $ | 690.9 | $ | 1.04 | $ | 1.39 | ||||||||||||||||
|
Total Company, as adjusted * |
$ | 3,333.3 | $ | 2,756.5 | $ | 604.9 | $ | 504.9 | $ | 1,017.6 | $ | 811.1 | $ | 2.32 | $ | 2.26 | ||||||||||||||||
|
Total Brokerage & Risk Management, as reported |
$ | 3,325.0 | $ | 2,766.1 | $ | 459.9 | $ | 427.6 | $ | 922.3 | $ | 765.6 | $ | 1.76 | $ | 1.90 | ||||||||||||||||
|
Total Brokerage & Risk Management, as adjusted * |
$ | 3,332.9 | $ | 2,756.1 | $ | 747.3 | $ | 608.3 | $ | 1,069.2 | $ | 876.9 | $ | 2.87 | $ | 2.72 | ||||||||||||||||
| * |
For third quarter 2025, the pretax impact of the Brokerage segment adjustments totals $376.8 million, mostly due to non-cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $96.1 million relating to these items. For third quarter 2025, the pretax impact of the Risk Management segment adjustments totals $9.3 million, with a corresponding adjustment to the provision for income taxes of $2.6 million relating to these items. For third quarter 2025, the pretax impact of the Corporate segment adjustments totals $57.8 million, with a corresponding adjustment to the benefit for income taxes of $13.9 million relating to these items. A detailed reconciliation of the 2025 and 2024 provision (benefit) for income taxes is shown on pages 14 and 15. |
(1 of 15)
"We had a terrific and very active third quarter!" said J. Patrick Gallagher, Jr., Chairman and CEO. "For our combined brokerage and risk management segments, we delivered 20% total revenue growth; our 19th straight quarter of double-digit top-line growth. Organic revenue growth was 4.8%, and incremental revenue from acquisitions was more than $450 million. Net earnings margin was 13.8%, adjusted EBITDAC margin was 32.1%, and adjusted EBITDAC grew 22%. Our client-centric, team-driven, and welcoming culture is thriving!
"Global insurance renewal premium changes remain in positive territory and we are not seeing indications of economic slowdown. Our two-pronged growth strategy - organic and M&A - continues to benefit from our leading niche experts, vast data and analytics offerings, extensive product expertise, outstanding service, and global reach which puts us in an enviable spot competitively for new customers and production talent.
"Overall, our businesses continue to shine and the early days of AssuredPartners professionals joining the Gallagher team is off to a terrific start!"
| Summary of Financial Results - Nine-Months ended September 30 | ||||||||||||||||||||||||||||||||
| Revenues Before | Diluted Net Earnings | |||||||||||||||||||||||||||||||
| Reimbursements | Net Earnings (Loss) | EBITDAC | (Loss) Per Share | |||||||||||||||||||||||||||||
|
Segment |
9 Mths 25 | 9 Mths 24 | 9 Mths 25 | 9 Mths 24 | 9 Mths 25 | 9 Mths 24 | 9 Mths 25 | 9 Mths 24 | ||||||||||||||||||||||||
| (in millions) | (in millions) | (in millions) | ||||||||||||||||||||||||||||||
|
Brokerage, as reported |
$ | 9,023.1 | $ | 7,637.6 | $ | 1,734.9 | $ | 1,368.4 | $ | 3,081.8 | $ | 2,408.3 | $ | 6.65 | $ | 6.10 | ||||||||||||||||
|
Net (gains) on divestitures |
(4.4 | ) | (25.0 | ) | (3.3 | ) | (18.6 | ) | (4.4 | ) | (25.0 | ) | (0.01 | ) | (0.08 | ) | ||||||||||||||||
|
Acquisition integration |
- | - | 112.4 | 112.7 | 150.7 | 151.0 | 0.43 | 0.51 | ||||||||||||||||||||||||
|
Workforce and lease termination |
- | - | 57.5 | 65.6 | 77.0 | 88.0 | 0.22 | 0.29 | ||||||||||||||||||||||||
|
Acquisition related adjustments |
- | (26.0 | ) | 96.2 | 24.3 | 126.0 | 92.5 | 0.37 | 0.11 | |||||||||||||||||||||||
|
Amortization of intangible assets |
- | - | 444.9 | 364.2 | - | - | 1.71 | 1.63 | ||||||||||||||||||||||||
|
Effective income tax rate impact |
- | - | - | (8.0 | ) | - | - | - | (0.04 | ) | ||||||||||||||||||||||
|
Levelized foreign currency translation |
- | 26.7 | - | 3.1 | - | 5.1 | - | 0.01 | ||||||||||||||||||||||||
|
Brokerage, as adjusted * |
9,018.7 | 7,613.3 | 2,442.6 | 1,911.7 | 3,431.1 | 2,719.9 | 9.37 | 8.53 | ||||||||||||||||||||||||
|
Risk Management, as reported |
1,167.4 | 1,081.1 | 133.2 | 131.7 | 228.9 | 216.9 | 0.51 | 0.59 | ||||||||||||||||||||||||
|
Net (gains) on divestitures |
(0.5 | ) | - | (0.4 | ) | - | (0.5 | ) | - | - | - | |||||||||||||||||||||
|
Acquisition integration |
- | - | 4.0 | 1.3 | 5.5 | 1.8 | 0.02 | - | ||||||||||||||||||||||||
|
Workforce and lease termination |
- | - | 7.7 | 3.4 | 10.6 | 4.6 | 0.03 | 0.02 | ||||||||||||||||||||||||
|
Acquisition related adjustments |
- | - | 1.3 | 0.2 | 1.7 | 0.2 | 0.01 | - | ||||||||||||||||||||||||
|
Amortization of intangible assets |
- | - | 11.8 | 7.2 | - | - | 0.04 | 0.03 | ||||||||||||||||||||||||
|
Levelized foreign currency translation |
- | (3.6 | ) | - | (0.6 | ) | - | (1.0 | ) | - | - | |||||||||||||||||||||
|
Risk Management, as adjusted * |
1,166.9 | 1,077.5 | 157.6 | 143.2 | 246.2 | 222.5 | 0.61 | 0.64 | ||||||||||||||||||||||||
|
Corporate, as reported |
1.2 | 1.9 | (519.4 | ) | (287.9 | ) | (342.3 | ) | (187.5 | ) | (2.00 | ) | (1.29 | ) | ||||||||||||||||||
|
Transaction-related costs |
- | - | 80.0 | 11.6 | 86.3 | 14.9 | 0.31 | 0.05 | ||||||||||||||||||||||||
|
Legal & tax related |
- | - | 8.2 | 3.5 | 23.6 | - | 0.03 | 0.02 | ||||||||||||||||||||||||
|
Corporate, as adjusted * |
1.2 | 1.9 | (431.2 | ) | (272.8 | ) | (232.4 | ) | (172.6 | ) | (1.66 | ) | (1.22 | ) | ||||||||||||||||||
|
Total Company, as reported |
$ | 10,191.7 | $ | 8,720.6 | $ | 1,348.7 | $ | 1,212.2 | $ | 2,968.4 | $ | 2,437.7 | $ | 5.16 | $ | 5.40 | ||||||||||||||||
|
Total Company, as adjusted * |
$ | 10,186.8 | $ | 8,692.7 | $ | 2,169.0 | $ | 1,782.1 | $ | 3,444.9 | $ | 2,769.8 | $ | 8.32 | $ | 7.95 | ||||||||||||||||
|
Total Brokerage & Risk Management, as reported |
$ | 10,190.5 | $ | 8,718.7 | $ | 1,868.1 | $ | 1,500.1 | $ | 3,310.7 | $ | 2,625.2 | $ | 7.16 | $ | 6.69 | ||||||||||||||||
|
Total Brokerage & Risk Management, as adjusted * |
$ | 10,185.6 | $ | 8,690.8 | $ | 2,600.2 | $ | 2,054.9 | $ | 3,677.3 | $ | 2,942.4 | $ | 9.98 | $ | 9.17 | ||||||||||||||||
(2 of 15)
| * |
For the nine-month period ended September 30, 2025, the pretax impact of the Brokerage segment adjustments totals $948.7 million, mostly due to non-cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $241.0 million relating to these items. For the nine-month period ended September 30, 2025, the pretax impact of the Risk Management segment adjustments totals $33.6 million, with a corresponding adjustment to the provision for income taxes of $9.2 million relating to these items. For the nine-month period ended September 30, 2025, the pretax impact of the Corporate segment adjustments totals $109.9 million, with a corresponding adjustment to the benefit for income taxes of $21.7 million relating to these items. A detailed reconciliation of the 2025 and 2024 provision (benefit) for income taxes is shown on pages 14 and 15. |
Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):
|
Organic Revenues (Non-GAAP) |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||
|
Base Commissions and Fees |
||||||||||||||||
|
Commissions and fees, as reported |
$ | 2,572.8 | $ | 2,123.0 | $ | 7,828.8 | $ | 6,862.7 | ||||||||
|
Less commissions and fees from acquisitions |
(417.2 | ) | - | (634.9 | ) | (26.0 | ) | |||||||||
|
Less divested operations |
- | (61.9 | ) | - | (83.0 | ) | ||||||||||
|
Levelized foreign currency translation |
- | 14.0 | - | 25.3 | ||||||||||||
|
Organic base commissions and fees |
$ | 2,155.6 | $ | 2,075.1 | $ | 7,193.9 | $ | 6,779.0 | ||||||||
|
Organic change in base commissions and fees |
3.9 | % | 6.1 | % | ||||||||||||
|
Supplemental Revenues |
||||||||||||||||
|
Supplemental revenues, as reported |
$ | 117.6 | $ | 79.1 | $ | 334.3 | $ | 261.7 | ||||||||
|
Less supplemental revenues from acquisitions |
(9.0 | ) | - | (12.3 | ) | - | ||||||||||
|
Levelized foreign currency translation |
- | 0.5 | - | 1.6 | ||||||||||||
|
Organic supplemental revenues |
$ | 108.6 | $ | 79.6 | $ | 322.0 | $ | 263.3 | ||||||||
|
Organic change in supplemental revenues |
36.4 | % | 22.3 | % | ||||||||||||
|
Contingent Revenues |
||||||||||||||||
|
Contingent revenues, as reported |
$ | 75.4 | $ | 69.3 | $ | 241.0 | $ | 215.1 | ||||||||
|
Less contingent revenues from acquisitions |
(15.2 | ) | - | (19.1 | ) | - | ||||||||||
|
Levelized foreign currency translation |
- | 0.1 | - | 0.1 | ||||||||||||
|
Organic contingent revenues |
$ | 60.2 | $ | 69.4 | $ | 221.9 | $ | 215.2 | ||||||||
|
Organic change in contingent revenues |
-13.3 | % | 3.1 | % | ||||||||||||
|
Total reported commissions, fees, supplemental revenues and contingent revenues |
$ | 2,765.8 | $ | 2,271.4 | $ | 8,404.1 | $ | 7,339.5 | ||||||||
|
Less commissions, fees, supplemental revenues and contingent revenues from acquisitions |
(441.4 | ) | - | (666.3 | ) | (26.0 | ) | |||||||||
|
Less divested operations |
- | (61.9 | ) | - | (83.0 | ) | ||||||||||
|
Levelized foreign currency translation |
- | 14.6 | - | 27.0 | ||||||||||||
|
Total organic commissions, fees, supplemental revenues and contingent revenues |
$ | 2,324.4 | $ | 2,224.1 | $ | 7,737.8 | $ | 7,257.5 | ||||||||
|
Total organic change |
4.5 | % | 6.6 | % | ||||||||||||
|
Acquisition Activity |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||
|
Number of acquisitions closed * |
6 | 3 | 25 | 27 | ||||||||||||
|
Estimated annualized revenues acquired (in millions) |
$ | 3,036.0 | $ | 32.7 | $ | 3,389.5 | $ | 173.9 | ||||||||
| * |
In the third quarter of 2025 and 2024, Gallagher issued 9,000 shares and no shares, respectively, of its common stock directly to sellers in connection with tax-free exchange acquisitions. |
(3 of 15)
Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
Acquisition of AssuredPartners
As previously disclosed, on August 18, 2025, we acquired AssuredPartners for approximately $13.8 billion. We raised $8.5 billion of cash in our December 11, 2024 follow-on common stock offering and borrowed $5.0 billion of cash in our December 19, 2024 senior notes issuance (collectively, the AssuredPartners Financing) to fund the transaction. On January 7, 2025, we received an additional $1.3 billion of cash due to the exercise by the underwriters of the overallotment provision related to the follow-on common stock offering.
|
Compensation Expense and Ratios |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||||||
|
Compensation expense, as reported |
$ | 1,649.0 | $ | 1,362.9 | $ | 4,792.4 | $ | 4,210.0 | ||||||||||||
|
Acquisition integration |
(38.2 | ) | (26.5 | ) | (85.8 | ) | (81.9 | ) | ||||||||||||
|
Workforce and lease termination related charges |
(15.4 | ) | (46.2 | ) | (68.3 | ) | (81.5 | ) | ||||||||||||
|
Acquisition related adjustments |
(45.9 | ) | (31.5 | ) | (126.0 | ) | (118.5 | ) | ||||||||||||
|
Levelized foreign currency translation |
- | 8.7 | - | 15.8 | ||||||||||||||||
|
Compensation expense, as adjusted |
$ | 1,549.5 | $ | 1,267.4 | $ | 4,512.3 | $ | 3,943.9 | ||||||||||||
|
Reported compensation expense ratios using reported revenues on pages 1 and 2 |
* | 56.4 | % | 56.9 | % | 53.1 | % | 55.1 | % | |||||||||||
|
Adjusted compensation expense ratios using adjusted revenues on pages 1 and 2 |
* | * | 52.9 | % | 53.1 | % | 50.0 | % | 51.8 | % | ||||||||||
| * |
Reported third quarter 2025 compensation expense ratio was 0.5 pts lower than third quarter 2024. This ratio was primarily benefited by higher interest income revenues earned on proceeds associated with the AssuredPartners Financing. This ratio also benefited from savings related to workforce and lease termination costs, partially offset by the impact of recent acquisitions and increased benefit costs. |
| ** |
Adjusted third quarter 2025 compensation expense ratio was 0.2 pts lower than third quarter 2024. This ratio was primarily impacted by recent acquisitions and increased benefit costs, partially offset by the benefit of higher interest income revenues earned on proceeds associated with the AssuredPartners Financing. |
|
Operating Expense and Ratios |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||||||
|
Operating expense, as reported |
$ | 433.6 | $ | 342.0 | $ | 1,148.9 | $ | 1,019.3 | ||||||||||||
|
Acquisition integration |
(27.8 | ) | (22.2 | ) | (64.9 | ) | (69.1 | ) | ||||||||||||
|
Workforce and lease termination related charges |
(5.9 | ) | (2.3 | ) | (8.7 | ) | (6.5 | ) | ||||||||||||
|
Levelized foreign currency translation |
- | 2.9 | - | 5.8 | ||||||||||||||||
|
Operating expense, as adjusted |
$ | 399.9 | $ | 320.4 | $ | 1,075.3 | $ | 949.5 | ||||||||||||
|
Reported operating expense ratios using reported revenues on pages 1 and 2 |
* | 14.8 | % | 14.3 | % | 12.7 | % | 13.4 | % | |||||||||||
|
Adjusted operating expense ratios using adjusted revenues on pages 1 and 2 |
* | * | 13.6 | % | 13.4 | % | 11.9 | % | 12.5 | % | ||||||||||
| * |
Reported third quarter 2025 operating expense ratio was 0.5 pts higher than third quarter 2024. This ratio was primarily impacted by higher integration costs and professional fees, partially offset by the benefit of higher interest income revenues earned on proceeds associated with the AssuredPartners Financing. |
| ** |
Adjusted third quarter 2025 operating expense ratio was 0.2 pts higher than third quarter 2024. This ratio was primarily benefited by higher interest income revenues earned on proceeds associated with the AssuredPartners Financing, partially offset by higher professional fees. |
(4 of 15)
Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
|
Net Earnings to Adjusted EBITDAC (Non-GAAP) |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||||||
|
Net earnings, as reported |
$ | 410.4 | $ | 383.0 | $ | 1,734.9 | $ | 1,368.4 | ||||||||||||
|
Provision for income taxes |
141.3 | 128.9 | 600.3 | 465.9 | ||||||||||||||||
|
Depreciation |
41.6 | 34.0 | 112.6 | 99.1 | ||||||||||||||||
|
Amortization |
218.5 | 161.0 | 596.4 | 487.8 | ||||||||||||||||
|
Change in estimated acquisition earnout payables |
28.5 | (15.4 | ) | 37.6 | (12.9 | ) | ||||||||||||||
|
EBITDAC |
840.3 | 691.5 | 3,081.8 | 2,408.3 | ||||||||||||||||
|
Net losses (gains) on divestitures |
8.1 | (22.5 | ) | (4.4 | ) | (25.0 | ) | |||||||||||||
|
Acquisition integration |
66.0 | 48.7 | 150.7 | 151.0 | ||||||||||||||||
|
Workforce and lease termination related charges |
21.3 | 48.5 | 77.0 | 88.0 | ||||||||||||||||
|
Acquisition related adjustments |
45.9 | 31.5 | 126.0 | 92.5 | ||||||||||||||||
|
Levelized foreign currency translation |
- | 2.5 | - | 5.1 | ||||||||||||||||
|
EBITDAC, as adjusted |
$ | 981.6 | $ | 800.2 | $ | 3,431.1 | $ | 2,719.9 | ||||||||||||
|
Net earnings margin, as reported using reported revenues on pages 1 and 2 |
* | 14.0 | % | 16.0 | % | 19.2 | % | 17.9 | % | |||||||||||
|
EBITDAC margin, as adjusted using adjusted revenues on pages 1 and 2 |
* | 33.5 | % | 33.5 | % | 38.0 | % | 35.7 | % | |||||||||||
| * |
Third quarter 2025 adjusted EBITDAC margin includes approximately $76 million of interest income revenues earned on the proceeds received in December 2024 related to the AssuredPartners Financing. The roll-in of M&A, including the AssuredPartners acquisition, which was completed during the quarter, unfavorably impacted the year over year change in third quarter adjusted EBITDAC margin by approximately 2%. |
Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):
|
Organic Revenues (Non-GAAP) |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||
|
Fees |
$ | 389.4 | $ | 359.1 | $ | 1,134.7 | $ | 1,048.0 | ||||||||
|
International performance bonus fees |
3.1 | 0.7 | 5.7 | 5.8 | ||||||||||||
|
Fees as reported |
392.5 | 359.8 | 1,140.4 | 1,053.8 | ||||||||||||
|
Less fees from acquisitions |
(13.3 | ) | - | (38.8 | ) | - | ||||||||||
|
Less divested operations |
- | (2.8 | ) | - | (7.1 | ) | ||||||||||
|
Levelized foreign currency translation |
- | (1.5 | ) | - | (3.6 | ) | ||||||||||
|
Organic fees |
$ | 379.2 | $ | 355.5 | $ | 1,101.6 | $ | 1,043.1 | ||||||||
|
Organic change in fees |
6.7 | % | 5.6 | % | ||||||||||||
|
Acquisition Activity |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||
|
Number of acquisitions closed |
- | 1 | 1 | 1 | ||||||||||||
|
Estimated annualized revenues acquired (in millions) |
$ | - | $ | 14.0 | $ | 38.2 | $ | 14.0 | ||||||||
(5 of 15)
Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
|
Compensation Expense and Ratios |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||||||
|
Compensation expense, as reported |
$ | 243.8 | $ | 224.6 | $ | 718.5 | $ | 657.7 | ||||||||||||
|
Acquisition integration |
(0.9 | ) | (0.4 | ) | (2.0 | ) | (1.0 | ) | ||||||||||||
|
Workforce and lease termination related charges |
(3.0 | ) | (1.1 | ) | (9.1 | ) | (2.8 | ) | ||||||||||||
|
Acquisition related adjustments |
- | - | (1.7 | ) | (0.2 | ) | ||||||||||||||
|
Levelized foreign currency translation |
- | (1.0 | ) | - | (2.6 | ) | ||||||||||||||
|
Compensation expense, as adjusted |
$ | 239.9 | $ | 222.1 | $ | 705.7 | $ | 651.1 | ||||||||||||
|
Reported compensation expense ratios using reported revenues (before reimbursements) on pages 1 and 2 |
* | 60.6 | % | 60.7 | % | 61.6 | % | 60.8 | % | |||||||||||
|
Adjusted compensation expense ratios using adjusted revenues (before reimbursements) on pages 1 and 2 |
* | * | 59.7 | % | 60.3 | % | 60.5 | % | 60.4 | % | ||||||||||
| * |
Reported third quarter 2025 compensation expense ratio was 0.1 pts lower than third quarter 2024. This ratio was primarily impacted by savings related to headcount controls, partially offset by increased incentive compensation and workforce and lease termination costs. |
| ** |
Adjusted third quarter 2025 compensation expense ratio was 0.6 pts lower compared to third quarter 2024. This ratio was primarily impacted by savings related to headcount controls and temporary help, partially offset by increased incentive compensation. |
|
Operating Expense and Ratios |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||||||
|
Operating expense, as reported |
$ | 76.3 | $ | 71.0 | $ | 220.0 | $ | 206.5 | ||||||||||||
|
Acquisition integration |
(1.5 | ) | (0.5 | ) | (3.5 | ) | (0.8 | ) | ||||||||||||
|
Workforce and lease termination related charges |
(0.4 | ) | (0.9 | ) | (1.5 | ) | (1.8 | ) | ||||||||||||
|
Levelized foreign currency translation |
- | (0.3 | ) | - | - | |||||||||||||||
|
Operating expense, as adjusted |
$ | 74.4 | $ | 69.3 | $ | 215.0 | $ | 203.9 | ||||||||||||
|
Reported operating expense ratios using reported revenues (before reimbursements) on pages 1 and 2 |
* | 19.0 | % | 19.2 | % | 18.9 | % | 19.1 | % | |||||||||||
|
Adjusted operating expense ratios using reported revenues (before reimbursements) on pages 1 and 2 |
* | * | 18.5 | % | 18.9 | % | 18.4 | % | 18.9 | % | ||||||||||
| * |
Reported third quarter 2025 operating expense ratio was 0.2 pts lower than third quarter 2024. This ratio primarily benefited from savings in client-related expenses, partially offset by increased integration costs and business insurance expense. |
| ** |
Adjusted third quarter 2025 operating expense ratio was 0.4 pts lower than third quarter 2024. This ratio primarily benefited from savings in client-related expenses, partially offset by increased business insurance expense. |
|
Net Earnings to Adjusted EBITDAC (Non-GAAP) |
3rd Q 2025 | 3rd Q 2024 | 9 Mths 2025 | 9 Mths 2024 | ||||||||||||
|
Net earnings, as reported |
$ | 49.5 | $ | 44.6 | $ | 133.2 | $ | 131.7 | ||||||||
|
Provision for income taxes |
17.9 | 16.1 | 48.1 | 47.6 | ||||||||||||
|
Depreciation |
10.5 | 9.6 | 29.9 | 27.3 | ||||||||||||
|
Amortization |
3.7 | 3.7 | 16.2 | 10.0 | ||||||||||||
|
Change in estimated acquisition earnout payables |
0.4 | 0.1 | 1.5 | 0.3 | ||||||||||||
|
EBITDAC |
82.0 | 74.1 | 228.9 | 216.9 | ||||||||||||
|
Net (gains) on divestitures |
(0.2 | ) | (0.1 | ) | (0.5 | ) | - | |||||||||
|
Acquisition integration |
2.4 | 0.9 | 5.5 | 1.8 | ||||||||||||
|
Workforce and lease termination related charges |
3.4 | 2.0 | 10.6 | 4.6 | ||||||||||||
|
Acquisition related adjustments |
- | - | 1.7 | 0.2 | ||||||||||||
|
Levelized foreign currency translation |
- | (0.2 | ) | - | (1.0 | ) | ||||||||||
|
EBITDAC, as adjusted |
$ | 87.6 | $ | 76.7 | $ | 246.2 | $ | 222.5 | ||||||||
|
Net earnings margin, as reported using reported revenues (before reimbursements) on pages 1 and 2 |
12.3 | % | 12.1 | % | 11.4 | % | 12.2 | % | ||||||||
|
EBITDAC margin, as adjusted using adjusted revenues (before reimbursements) on pages 1 and 2 |
21.8 | % | 20.8 | % | 21.1 | % | 20.6 | % | ||||||||
(6 of 15)
Corporate Segment Reported GAAP Information (dollars in millions):
| 2025 | 2024 | |||||||||||||||||||||||
|
3rd Quarter |
Pretax Loss |
Income Tax Benefit |
Net Earnings (Loss) Attributable to Controlling Interests |
Pretax Loss |
Income Tax Benefit |
Net Earnings (Loss) Attributable to Controlling Interests |
||||||||||||||||||
|
Components of Corporate Segment, as reported |
||||||||||||||||||||||||
|
Interest and banking costs |
$ | (161.9 | ) | $ | 42.1 | $ | (119.8 | ) | $ | (93.7 | ) | $ | 24.4 | $ | (69.3 | ) | ||||||||
|
Clean energy related |
(1.8 | ) | 0.5 | (1.3 | ) | (1.9 | ) | 0.5 | (1.4 | ) | ||||||||||||||
|
Acquisition costs (1) |
(38.5 | ) | (0.7 | ) | (39.2 | ) | (15.2 | ) | 2.6 | (12.6 | ) | |||||||||||||
|
Corporate (2) |
(70.0 | ) | 44.0 | (26.0 | ) | (58.5 | ) | 28.3 | (30.2 | ) | ||||||||||||||
|
Reported 3rd quarter |
(272.2 | ) | 85.9 | (186.3 | ) | (169.3 | ) | 55.8 | (113.5 | ) | ||||||||||||||
|
Adjustments |
||||||||||||||||||||||||
|
Transaction-related costs (1) |
34.2 | 1.5 | 35.7 | 8.9 | (2.3 | ) | 6.6 | |||||||||||||||||
|
Legal and tax related (3) |
23.6 | (15.4 | ) | 8.2 | - | 3.5 | 3.5 | |||||||||||||||||
|
Components of Corporate Segment, as adjusted |
||||||||||||||||||||||||
|
Interest and banking costs |
(161.9 | ) | 42.1 | (119.8 | ) | (93.7 | ) | 24.4 | (69.3 | ) | ||||||||||||||
|
Clean energy related |
(1.8 | ) | 0.5 | (1.3 | ) | (1.9 | ) | 0.5 | (1.4 | ) | ||||||||||||||
|
Acquisition costs |
(4.3 | ) | 0.8 | (3.5 | ) | (6.3 | ) | 0.3 | (6.0 | ) | ||||||||||||||
|
Corporate (2) |
(46.4 | ) | 28.6 | (17.8 | ) | (58.5 | ) | 31.8 | (26.7 | ) | ||||||||||||||
|
Adjusted 3rd quarter |
$ | (214.4 | ) | $ | 72.0 | $ | (142.4 | ) | $ | (160.4 | ) | $ | 57.0 | $ | (103.4 | ) | ||||||||
|
Nine Months |
||||||||||||||||||||||||
|
Components of Corporate Segment, as reported |
||||||||||||||||||||||||
|
Interest and banking costs |
$ | (480.9 | ) | $ | 125.1 | $ | (355.8 | ) | $ | (281.8 | ) | $ | 73.3 | $ | (208.5 | ) | ||||||||
|
Clean energy related |
(5.4 | ) | 1.5 | (3.9 | ) | (6.0 | ) | 1.4 | (4.6 | ) | ||||||||||||||
|
Acquisition costs (1) |
(99.0 | ) | 8.2 | (90.8 | ) | (27.2 | ) | 4.6 | (22.6 | ) | ||||||||||||||
|
Corporate (2) |
(240.2 | ) | 171.3 | (68.9 | ) | (157.0 | ) | 104.8 | (52.2 | ) | ||||||||||||||
|
Reported nine months |
(825.5 | ) | 306.1 | (519.4 | ) | (472.0 | ) | 184.1 | (287.9 | ) | ||||||||||||||
|
Adjustments |
||||||||||||||||||||||||
|
Transaction-related costs (1) |
86.3 | (6.3 | ) | 80.0 | 14.9 | (3.3 | ) | 11.6 | ||||||||||||||||
|
Legal and tax related (3) |
23.6 | (15.4 | ) | 8.2 | - | 3.5 | 3.5 | |||||||||||||||||
|
Components of Corporate Segment, as adjusted |
||||||||||||||||||||||||
|
Interest and banking costs |
(480.9 | ) | 125.1 | (355.8 | ) | (281.8 | ) | 73.3 | (208.5 | ) | ||||||||||||||
|
Clean energy related |
(5.4 | ) | 1.5 | (3.9 | ) | (6.0 | ) | 1.4 | (4.6 | ) | ||||||||||||||
|
Acquisition costs |
(12.7 | ) | 1.9 | (10.8 | ) | (12.3 | ) | 1.3 | (11.0 | ) | ||||||||||||||
|
Corporate (2) |
(216.6 | ) | 155.9 | (60.7 | ) | (157.0 | ) | 108.3 | (48.7 | ) | ||||||||||||||
|
Adjusted nine months |
$ | (715.6 | ) | $ | 284.4 | $ | (431.2 | ) | $ | (457.1 | ) | $ | 184.3 | $ | (272.8 | ) | ||||||||
| (1) |
Gallagher incurred transaction-related costs, which include legal, consulting, employee compensation and other professional fees associated with completed, future and terminated acquisitions. Adjustments primarily relate to the acquisition of the Willis Towers Watson treaty reinsurance brokerage operations, the acquisitions of Buck, Cadence Insurance, Eastern Insurance Group, all of which closed in 2023, Woodruff Sawyer, which closed on April 10, 2025, and AssuredPartners, which closed on August 18, 2025. |
| (2) |
Corporate pretax loss includes a net unrealized foreign exchange remeasurement gain of $5.4 million in third quarter 2025 and a net unrealized foreign exchange remeasurement loss of $(14.9) million in third quarter 2024. Corporate pretax loss includes a net unrealized foreign exchange remeasurement loss of $(42.8) million in the nine-month period ended September 30, 2025 and a net unrealized foreign exchange remeasurement loss of $(16.5) million in the nine-month period ended September 30, 2024. |
| (3) |
Adjustments in third quarter 2025 and 2024 include costs associated with legal and tax matters. |
(7 of 15)
Interest and banking costs and debt - At September 30, 2025, Gallagher had $9,550.0 million of borrowings from public debt, $3,323.0 million of borrowings from private placements and $130.0 million of borrowings under its line of credit facility. In addition, Gallagher had $237.4 million outstanding under a revolving loan facility that provides funding for premium finance receivables, which are fully collateralized by the underlying premiums held by insurance carriers, and as such are excluded from its debt covenant computations, as applicable. Interest and banking costs in third quarter 2025 are higher than the same period in 2024 primarily due to the debt issuances that occurred in December 2024.
Clean energy related - For 2025, this consists of operating results related to Gallagher's investments in new clean energy projects, primarily fusion and carbon sequestration projects.
Acquisition costs - Consists mostly of external professional fees and other due diligence costs related to acquisitions. On occasion, Gallagher enters into forward currency hedges for the purchase price of committed, but not yet funded, acquisitions with funding requirements in currencies other than the U.S. dollar. The gains or losses, if any, associated with these hedge transactions are also included in acquisition costs.
Corporate - Consists of overhead allocations mostly related to corporate staff compensation, other corporate level activities, and net unrealized foreign exchange remeasurement. In addition, it includes the tax expense related to the partial taxation of foreign earnings, nondeductible executive compensation and entertainment expenses, the tax benefit from the vesting of employee equity awards, as well as other permanent or discrete tax items not reflected in the provision for income taxes in the Brokerage and Risk Management segments.
Income Taxes - Gallagher allocates the provision for income taxes to its Brokerage and Risk Management segments using the local country statutory rates. Gallagher's consolidated effective tax rate for the quarters ended September 30, 2025 and 2024 were 21.1% and 22.1%, respectively.
Webcast Conference Call - Gallagher will host a webcast conference call on Thursday, October 30, 2025 at 5:30 p.m. ET/4:30 p.m. CT. To listen to this call, please go to Arthur J. Gallagher & Co. - Events & Presentations (ajg.com). The call will be available for replay at such website for at least 90 days.
About Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. Gallagher provides these services in approximately 130 countries around the world through its owned operations and a network of correspondent brokers and consultants.
Information Concerning Forward-Looking Statements
Arthur J.Gallagher & Co. published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 20:53 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]