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Arthur J. Gallagher Q2 Earnings Miss Estimates, Revenues Up Y/Y
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Key Takeaways
{\"0\":\"AJG reported Q2 EPS of $2.33, up 3.1% but missing estimates by 1.3%.\",\"1\":\"Total revenue rose 16% to $3.2B, fueled by higher fees, finance income, and other sources.\",\"2\":\"Expenses rose 14.1%, while adjusted EBITDAC jumped 23.3% to $1B.\"}
Arthur J. Gallagher & Co. (AJG - Free Report) reported second-quarter 2025 adjusted net earnings of $2.33 per share, which missed the Zacks Consensus Estimate by 1.3%. The bottom line increased 3.1% on a year-over-year basis.
The quarter’s results overall benefited from higher commissions, fees, and improved adjusted EBITDAC across both segments, partially offset by higher expenses.
Operational Update
Total revenues were $3.2 billion, up 16% year over year, primarily driven by higher commissions, fees and supplemental, contingent revenues and interest income, premium finance revenues and other income. The top line beat the Zacks Consensus Estimate by 0.3%.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher’s total expenses increased 14.1% year over year to $2.7 billion in the reported quarter due to higher compensation, reimbursements, interest, and amortization.
Adjusted earnings before interest, tax, depreciation, and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 26% from the prior-year quarter to $1 billion. Adjusted EBITDAC margin expanded 307 basis points year over year to 34.5%
Segmental Results
Brokerage: Revenues of $2.7 billion increased 15.6% year over year on higher commissions, supplemental revenues, contingent revenues, interest income, premium finance revenues and other income. The figure missed the Zacks Consensus Estimate by 0.7%.
Expenses jumped 8.9% from the year-ago quarter to $2.1 billion due to higher operating, amortization, and depreciation.
Adjusted EBITDAC climbed 27.3% from the year-ago level to $1 billion, and the margin expanded 330 basis points (bps) to 36.4%. Adjusted EBITDAC for the quarter missed the Zacks Consensus Estimate by 1.5%.
Risk Management: Revenues were up 9.5% year over year to $391.8 million, mainly owing to higher fees and interest income and other income. The figure beat the Zacks Consensus Estimate by 0.5%.
Expenses rose 9.5% from the prior-year period to $376.8 million on higher compensation and reimbursements.
Adjusted EBITDAC improved 12.3% year over year to $82.1 million, and the margin expanded 60 bps to 21%. Adjusted EBITDAC for the quarter beat the Zacks Consensus Estimate by 3.3%.
Corporate: EBITDAC was a negative $81.7 million compared with a negative $47.3 million in the year-ago quarter.
Financial Update
As of June 30, 2025, total assets were $80.1 billion, up 24.7% from the 2024-end level.
At the second-quarter end, cash and cash equivalents of $14.3 billion decreased 4.6% from the 2024-end level.
As of June 30, 2025, shareholders’ equity increased 14.2% to $23 billion from the level on Dec. 31, 2024.
Acquisition Update
In the quarter under review, Arthur J. Gallagher closed nine acquisitions with estimated annualized revenues of about $290.8 million.
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered second-quarter 2025 adjusted earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 8%. The bottom line increased 20% year over year.Willis Towers posted adjusted consolidated revenues of $2.26 billion, which remained flat year over year on a reported basis. Revenues increased 5% on an organic basis and 1% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 1.2%.
Adjusted operating income was $419 million, which increased 9% year over year. The figure was higher than our estimate of $396.2 million. Margin expanded 150 basis points (bps) to 18.5%.
Marsh & McLennan Companies, Inc. (MMC - Free Report) reported second-quarter 2025 adjusted earnings per share of $2.72, which surpassed the Zacks Consensus Estimate by 2.3%. The bottom line advanced 11% year over year. Consolidated revenues of $6.97 billion improved 12% year over year. The figure rose 4% on an underlying basis. Also, the top line beat the consensus mark by 0.8%. Total operating expenses escalated 12.4% year over year to $5.1 billion, higher than our model estimate of $4.9 billion.
Marsh & McLennan’s adjusted operating income improved 14% year over year to $2.06 billion and beat our estimate of $2.05 billion. Adjusted operating margin of 29.5% increased 50 basis points year over year.
Brown & Brown, Inc.’s (BRO - Free Report) second-quarter 2025 adjusted earnings of 1.03 per share beat the Zacks Consensus Estimate by 4%. The bottom line increased 10.8% year over year. Total revenues of $1.3 billion beat the Zacks Consensus Estimate by 0.7%. The top line improved 9.1% year over year.
Adjusted EBITDAC was $471 million, up 12.1% year over year. EBITDAC margin expanded 100 basis points (bps) year over year to 36.7%. Our estimate for adjusted EBITDAC was $434.5 million.
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Arthur J. Gallagher Q2 Earnings Miss Estimates, Revenues Up Y/Y
Key Takeaways
Arthur J. Gallagher & Co. (AJG - Free Report) reported second-quarter 2025 adjusted net earnings of $2.33 per share, which missed the Zacks Consensus Estimate by 1.3%. The bottom line increased 3.1% on a year-over-year basis.
The quarter’s results overall benefited from higher commissions, fees, and improved adjusted EBITDAC across both segments, partially offset by higher expenses.
Operational Update
Total revenues were $3.2 billion, up 16% year over year, primarily driven by higher commissions, fees and supplemental, contingent revenues and interest income, premium finance revenues and other income. The top line beat the Zacks Consensus Estimate by 0.3%.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. Quote
Arthur J. Gallagher’s total expenses increased 14.1% year over year to $2.7 billion in the reported quarter due to higher compensation, reimbursements, interest, and amortization.
Adjusted earnings before interest, tax, depreciation, and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 26% from the prior-year quarter to $1 billion. Adjusted EBITDAC margin expanded 307 basis points year over year to 34.5%
Segmental Results
Brokerage: Revenues of $2.7 billion increased 15.6% year over year on higher commissions, supplemental revenues, contingent revenues, interest income, premium finance revenues and other income. The figure missed the Zacks Consensus Estimate by 0.7%.
Expenses jumped 8.9% from the year-ago quarter to $2.1 billion due to higher operating, amortization, and depreciation.
Adjusted EBITDAC climbed 27.3% from the year-ago level to $1 billion, and the margin expanded 330 basis points (bps) to 36.4%. Adjusted EBITDAC for the quarter missed the Zacks Consensus Estimate by 1.5%.
Risk Management: Revenues were up 9.5% year over year to $391.8 million, mainly owing to higher fees and interest income and other income. The figure beat the Zacks Consensus Estimate by 0.5%.
Expenses rose 9.5% from the prior-year period to $376.8 million on higher compensation and reimbursements.
Adjusted EBITDAC improved 12.3% year over year to $82.1 million, and the margin expanded 60 bps to 21%. Adjusted EBITDAC for the quarter beat the Zacks Consensus Estimate by 3.3%.
Corporate: EBITDAC was a negative $81.7 million compared with a negative $47.3 million in the year-ago quarter.
Financial Update
As of June 30, 2025, total assets were $80.1 billion, up 24.7% from the 2024-end level.
At the second-quarter end, cash and cash equivalents of $14.3 billion decreased 4.6% from the 2024-end level.
As of June 30, 2025, shareholders’ equity increased 14.2% to $23 billion from the level on Dec. 31, 2024.
Acquisition Update
In the quarter under review, Arthur J. Gallagher closed nine acquisitions with estimated annualized revenues of about $290.8 million.
Zacks Rank
Currently, AJG carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurance-Brokerage Players
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered second-quarter 2025 adjusted earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 8%. The bottom line increased 20% year over year.Willis Towers posted adjusted consolidated revenues of $2.26 billion, which remained flat year over year on a reported basis. Revenues increased 5% on an organic basis and 1% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 1.2%.
Adjusted operating income was $419 million, which increased 9% year over year. The figure was higher than our estimate of $396.2 million. Margin expanded 150 basis points (bps) to 18.5%.
Marsh & McLennan Companies, Inc. (MMC - Free Report) reported second-quarter 2025 adjusted earnings per share of $2.72, which surpassed the Zacks Consensus Estimate by 2.3%. The bottom line advanced 11% year over year. Consolidated revenues of $6.97 billion improved 12% year over year. The figure rose 4% on an underlying basis. Also, the top line beat the consensus mark by 0.8%. Total operating expenses escalated 12.4% year over year to $5.1 billion, higher than our model estimate of $4.9 billion.
Marsh & McLennan’s adjusted operating income improved 14% year over year to $2.06 billion and beat our estimate of $2.05 billion. Adjusted operating margin of 29.5% increased 50 basis points year over year.
Brown & Brown, Inc.’s (BRO - Free Report) second-quarter 2025 adjusted earnings of 1.03 per share beat the Zacks Consensus Estimate by 4%. The bottom line increased 10.8% year over year. Total revenues of $1.3 billion beat the Zacks Consensus Estimate by 0.7%. The top line improved 9.1% year over year.
Adjusted EBITDAC was $471 million, up 12.1% year over year. EBITDAC margin expanded 100 basis points (bps) year over year to 36.7%. Our estimate for adjusted EBITDAC was $434.5 million.