Arthur J. Gallagher & Co. Announces Second Quarter 2025 Financial Results
ROLLING MEADOWS, Ill., July 31, 2025 /PRNewswire/ -- Arthur J. Gallagher & Co. (NYSE:AJG) today reported its financial results for the quarter ended June 30, 2025. Management will host a webcast conference call to discuss these results on Thursday, July 31, 2025 at 5:15 p.m. ET/4:15 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 - Second Quarter
Revenues Before
Diluted Net Earnings
Reimbursements
Net Earnings (Loss)
EBITDAC
(Loss) Per Share
Segment
2nd Q 25
2nd Q 24
2nd Q 25
2nd Q 24
2nd Q 25
2nd Q 24
2nd Q 25
2nd Q 24
(in millions)
(in millions)
(in millions)
Brokerage, as reported
$ 2,785.6
$ 2,376.3
$ 508.4
$ 332.8
$ 890.5
$ 668.1
$ 1.95
$ 1.48
Net (gains) on divestitures
(6.1)
(2.0)
(4.5)
(1.5)
(6.1)
(2.0)
(0.02)
(0.01)
Acquisition integration
-
-
30.4
40.0
40.7
53.6
0.12
0.18
Workforce and lease termination
-
-
28.1
20.8
37.8
27.9
0.11
0.10
Acquisition related adjustments
-
-
24.8
30.8
50.0
37.2
0.09
0.14
Amortization of intangible assets
-
-
129.9
127.5
-
-
0.50
0.57
Effective income tax rate impact
-
-
-
(2.5)
-
-
-
(0.01)
Levelized foreign currency
translation
-
30.4
-
7.7
-
11.1
-
0.03
Brokerage, as adjusted *
2,779.5
2,404.7
717.1
555.6
1,012.9
795.9
2.75
2.48
Risk Management, as reported
391.9
358.6
42.6
47.8
75.4
72.3
0.16
0.21
Net (gains) on divestitures
(0.1)
(0.1)
(0.1)
(0.1)
(0.1)
(0.1)
-
-
Acquisition integration
-
-
1.1
0.2
1.5
0.2
0.01
-
Workforce and lease termination
-
-
2.9
1.1
4.0
1.4
0.01
0.01
Acquisition related adjustments
-
-
1.0
0.1
1.3
0.1
-
-
Amortization of intangible assets
-
-
5.0
-
-
-
0.02
-
Levelized foreign currency
translation
-
(0.6)
-
(0.6)
-
(0.8)
-
-
Risk Management, as adjusted *
391.8
357.9
52.5
48.5
82.1
73.1
0.20
0.22
Corporate, as reported
0.4
1.1
(184.8)
(95.2)
(110.7)
(50.1)
(0.71)
(0.42)
Transaction-related costs
-
-
24.3
2.3
29.0
2.8
0.09
0.01
Corporate, as adjusted *
0.4
1.1
(160.5)
(92.9)
(81.7)
(47.3)
(0.62)
(0.41)
Total Company, as reported
$ 3,177.9
$ 2,736.0
$ 366.2
$ 285.4
$ 855.2
$ 690.3
$ 1.40
$ 1.27
Total Company, as adjusted *
$ 3,171.7
$ 2,763.7
$ 609.1
$ 511.2
$ 1,013.3
$ 821.7
$ 2.33
$ 2.29
Total Brokerage & Risk
Management, as reported
$ 3,177.5
$ 2,734.9
$ 551.0
$ 380.6
$ 965.9
$ 740.4
$ 2.11
$ 1.69
Total Brokerage & Risk
Management, as adjusted *
$ 3,171.3
$ 2,762.6
$ 769.6
$ 604.1
$ 1,095.0
$ 869.0
$ 2.95
$ 2.70
*
For second quarter 2025, the pretax impact of the Brokerage segment adjustments totals $279.9 million, mostly due to non‑cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $71.2 million relating to these items. For second quarter 2025, the pretax impact of the Risk Management segment adjustments totals $13.6 million, with a corresponding adjustment to the provision for income taxes of $3.7 million relating to these items. For second quarter 2025, the pretax impact of the Corporate segment adjustments totals $29.0 million, with a corresponding adjustment to the benefit for income taxes of $4.7 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.
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"We had a great second quarter" said J. Patrick Gallagher, Jr., Chairman and CEO. "Our core brokerage and risk management segments combined to deliver 16% revenue growth, including organic revenue growth of 5.4%. Our second quarter net earnings margin increased 343 basis points to 17.3%, our adjusted EBITDAC margin increased 307 basis points to 34.5%, and adjusted EBITDAC grew year over year by 26%, the 21st consecutive quarter of double-digit growth.
"We also completed 9 new mergers in the quarter with approximately $290 million of estimated annualized revenue. We are making excellent progress on the pending AssuredPartners acquisition and believe we are on track to close here in the third quarter of 2025.
"Overall, the global P/C insurance market remains rational with competition across property lines, and continued caution within casualty insurance products. Accordingly, we continue to see differences between property and casualty renewal premium changes, with property declining 7% and casualty increasing 8%. Our daily revenue indications and claim counts within Gallagher Bassett are not indicating a meaningful change in our customers' business activity.
"Our talented teams remain focused on what they do best, providing our clients the best insurance and risk management advice by leveraging our niche experts and data driven insights. We remain well positioned for the remainder of 2025 and beyond."
Summary of Financial Results - Six-Months ended June 30
Revenues Before
Diluted Net Earnings
Reimbursements
Net Earnings (Loss)
EBITDAC
(Loss) Per Share
Segment
6 Mths 25
6 Mths 24
6 Mths 25
6 Mths 24
6 Mths 25
6 Mths 24
6 Mths 25
6 Mths 24
(in millions)
(in millions)
(in millions)
Brokerage, as reported
$ 6,100.2
$ 5,241.2
$ 1,324.5
$ 985.4
$ 2,241.5
$ 1,716.8
$ 5.08
$ 4.40
Net (gains) on divestitures
(12.5)
(2.5)
(9.3)
(1.9)
(12.5)
(2.5)
(0.04)
(0.01)
Acquisition integration
-
-
63.3
76.4
84.7
102.3
0.24
0.35
Workforce and lease termination
-
-
41.5
29.5
55.7
39.5
0.16
0.13
Acquisition related adjustments
-
(26.0)
49.4
22.5
80.1
61.0
0.19
0.10
Amortization of intangible assets
-
-
282.1
244.2
-
-
1.09
1.10
Effective income tax rate impact
-
-
-
(5.1)
-
-
-
(0.02)
Levelized foreign currency
translation
-
12.6
-
1.4
-
2.6
-
0.01
Brokerage, as adjusted *
6,087.7
5,225.3
1,751.5
1,352.4
2,449.5
1,919.7
6.72
6.06
Risk Management, as reported
765.3
711.4
83.7
87.1
146.9
142.8
0.32
0.39
Net (gains) losses on divestitures
(0.3)
0.1
(0.2)
-
(0.3)
0.1
-
-
Acquisition integration
-
-
2.2
0.7
3.1
0.9
0.01
-
Workforce and lease termination
-
-
5.2
2.0
7.2
2.6
0.02
0.01
Acquisition related adjustments
-
-
1.3
0.2
1.7
0.2
-
-
Amortization of intangible assets
-
-
9.2
4.5
-
-
0.04
0.02
Levelized foreign currency
translation
-
(2.1)
-
(0.5)
-
(0.8)
-
-
Risk Management, as adjusted *
765.0
709.4
101.4
94.0
158.6
145.8
0.39
0.42
Corporate, as reported
0.8
1.5
(333.1)
(174.4)
(232.9)
(112.8)
(1.28)
(0.78)
Transaction-related costs
-
-
44.3
5.0
52.1
6.0
0.17
0.02
Corporate, as adjusted *
0.8
1.5
(288.8)
(169.4)
(180.8)
(106.8)
(1.11)
(0.76)
Total Company, as reported
$ 6,866.3
$ 5,954.1
$ 1,075.1
$ 898.1
$ 2,155.5
$ 1,746.8
$ 4.12
$ 4.01
Total Company, as adjusted *
$ 6,853.5
$ 5,936.2
$ 1,564.1
$ 1,277.0
$ 2,427.3
$ 1,958.7
$ 6.00
$ 5.72
Total Brokerage & Risk
Management, as reported
$ 6,865.5
$ 5,952.6
$ 1,408.2
$ 1,072.5
$ 2,388.4
$ 1,859.6
$ 5.40
$ 4.79
Total Brokerage & Risk
Management, as adjusted *
$ 6,852.7
$ 5,934.7
$ 1,852.9
$ 1,446.4
$ 2,608.1
$ 2,065.5
$ 7.11
$ 6.48
*
For the six-month period ended June 30, 2025, the pretax impact of the Brokerage segment adjustments totals $571.9 million, mostly due to non‑cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $144.9 million relating to these items. For the six-month period ended June 30, 2025, the pretax impact of the Risk Management segment adjustments totals $24.3 million, with a corresponding adjustment to the provision for income taxes of $6.6 million relating to these items. For the six-month period ended June 30, 2025, the pretax impact of the Corporate segment adjustments totals $52.1 million, with a corresponding adjustment to the benefit for income taxes of $7.8 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.
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Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):
Organic Revenues (Non-GAAP)
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Base Commissions and Fees
Commissions and fees, as reported
$ 2,386.6
$ 2,139.4
$ 5,256.0
$ 4,739.7
Less commissions and fees from acquisitions
(127.1)
-
(217.7)
(26.0)
Less divested operations
-
(9.6)
-
(21.1)
Levelized foreign currency translation
-
28.0
-
11.3
Organic base commissions and fees
$ 2,259.5
$ 2,157.8
$ 5,038.3
$ 4,703.9
Organic change in base commissions and fees
4.7 %
7.1 %
Supplemental Revenues
Supplemental revenues, as reported
$ 102.8
$ 88.7
$ 216.7
$ 182.6
Less supplemental revenues from acquisitions
(3.2)
-
(3.3)
-
Levelized foreign currency translation
-
1.4
-
1.1
Organic supplemental revenues
$ 99.6
$ 90.1
$ 213.4
$ 183.7
Organic change in supplemental revenues
10.5 %
16.2 %
Contingent Revenues
Contingent revenues, as reported
$ 72.7
$ 59.8
$ 165.6
$ 145.8
Less contingent revenues from acquisitions
(2.6)
-
(3.9)
-
Levelized foreign currency translation
-
0.4
-
-
Organic contingent revenues
$ 70.1
$ 60.2
$ 161.7
$ 145.8
Organic change in contingent revenues
16.5 %
10.9 %
Total reported commissions, fees, supplemental
revenues and contingent revenues
$ 2,562.1
$ 2,287.9
$ 5,638.3
$ 5,068.1
Less commissions, fees, supplemental revenues
and contingent revenues from acquisitions
(132.9)
-
(224.9)
(26.0)
Less divested operations
-
(9.6)
-
(21.1)
Levelized foreign currency translation
-
29.8
-
12.4
Total organic commissions, fees, supplemental
revenues and contingent revenues
$ 2,429.2
$ 2,308.1
$ 5,413.4
$ 5,033.4
Total organic change
5.3 %
7.6 %
Acquisition Activity
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Number of acquisitions closed *
9
12
19
24
Estimated annualized revenues acquired (in millions)
$ 290.8
$ 72.0
$ 353.5
$ 141.2
*
In the second quarter of 2025 and 2024, Gallagher issued no shares and 154,000 shares, respectively, of its common stock directly to sellers in connection with tax-free exchange acquisitions.
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Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
Acquisition of AssuredPartners
As previously disclosed, on December 7, 2024, we agreed to acquire AssuredPartners for approximately $13.45 billion, subject to customary regulatory approvals, and standard closing conditions. On March 7, 2025, we received a request for additional information as part of the Hart-Scott-Rodino filing. We have responded to the request and expect that the transaction will close in the third quarter of 2025. 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 $1.28 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
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Compensation expense, as reported
$ 1,526.2
$ 1,370.3
$ 3,143.4
$ 2,847.1
Acquisition integration
(20.0)
(30.9)
(47.6)
(55.4)
Workforce and lease termination related charges
(36.4)
(24.9)
(52.9)
(35.3)
Acquisition related adjustments
(50.0)
(37.2)
(80.1)
(87.0)
Levelized foreign currency translation
-
15.9
-
7.1
Compensation expense, as adjusted
$ 1,419.8
$ 1,293.2
$ 2,962.8
$ 2,676.5
Reported compensation expense ratios using reported
revenues on pages 1 and 2
*
54.8 %
57.7 %
51.5 %
54.3 %
Adjusted compensation expense ratios using adjusted
revenues on pages 1 and 2
**
51.1 %
53.8 %
48.7 %
51.2 %
*
Reported second quarter 2025 compensation expense ratio was 2.9 pts lower than second 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 headcount controls and lower integration costs, partially offset by higher acquisition related adjustments and workforce and lease termination related charges.
**
Adjusted second quarter 2025 compensation expense ratio was 2.7 pts lower compared to second 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 headcount controls.
Operating Expense and Ratios
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Operating expense, as reported
$ 368.9
$ 337.9
$ 715.3
$ 677.3
Acquisition integration
(20.7)
(22.7)
(37.1)
(46.9)
Workforce and lease termination related charges
(1.4)
(3.0)
(2.8)
(4.2)
Levelized foreign currency translation
-
3.4
-
2.9
Operating expense, as adjusted
$ 346.8
$ 315.6
$ 675.4
$ 629.1
Reported operating expense ratios using reported
revenues on pages 1 and 2
*
13.2 %
14.2 %
11.7 %
12.9 %
Adjusted operating expense ratios using adjusted
revenues on pages 1 and 2
**
12.5 %
13.1 %
11.1 %
12.0 %
*
Reported second quarter 2025 operating expense ratio was 1.0 pts lower than second quarter 2024. This ratio was primarily benefited by higher interest income revenues earned on proceeds associated with the AssuredPartners Financing, as well as lower integration costs and savings in real estate expenses related to office consolidations. These amounts were partially offset by increased technology costs.
**
Adjusted second quarter 2025 operating expense ratio was 0.6 pts lower than second quarter 2024. This ratio was primarily benefited by higher interest income revenues earned on proceeds associated with the AssuredPartners Financing, as well as savings in real estate expenses related to office consolidations. These amounts were partially offset by increased technology costs.
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Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
Net Earnings to Adjusted EBITDAC (Non-GAAP)
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Net earnings, as reported
$ 508.4
$ 332.8
$ 1,324.5
$ 985.4
Provision for income taxes
176.0
113.5
459.0
337.0
Depreciation
38.1
32.3
71.0
65.1
Amortization
174.3
170.8
377.9
326.8
Change in estimated acquisition earnout payables
(6.3)
18.7
9.1
2.5
EBITDAC
890.5
668.1
2,241.5
1,716.8
Net (gains) on divestitures
(6.1)
(2.0)
(12.5)
(2.5)
Acquisition integration
40.7
53.6
84.7
102.3
Workforce and lease termination related charges
37.8
27.9
55.7
39.5
Acquisition related adjustments
50.0
37.2
80.1
61.0
Levelized foreign currency translation
-
11.1
-
2.6
EBITDAC, as adjusted
$ 1,012.9
$ 795.9
$ 2,449.5
$ 1,919.7
Net earnings margin, as reported using reported
revenues on pages 1 and 2
*
18.3 %
14.0 %
21.7 %
18.8 %
EBITDAC margin, as adjusted using adjusted
revenues on pages 1 and 2
*
36.4 %
33.1 %
40.2 %
36.7 %
*
Second quarter 2025 adjusted EBITDAC margin includes approximately $144 million of interest income revenues earned on the proceeds received in December 2024 related to the AssuredPartners Financing.
Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):
Organic Revenues (Non-GAAP)
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Fees
$ 382.4
$ 347.0
$ 745.3
$ 688.9
International performance bonus fees
0.9
2.5
2.6
5.1
Fees as reported
383.3
349.5
747.9
694.0
Less fees from acquisitions
(15.2)
-
(25.5)
-
Less divested operations
-
(2.3)
-
(4.3)
Levelized foreign currency translation
-
(0.6)
-
(2.1)
Organic fees
$ 368.1
$ 346.6
$ 722.4
$ 687.6
Organic change in fees
6.2 %
5.1 %
Acquisition Activity
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Number of acquisitions closed
-
-
1
-
Estimated annualized revenues acquired (in millions)
$ -
$ -
$ 38.2
$ -
(5 of 15)
Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
Compensation Expense and Ratios
2nd Q 2025
2nd Q 2024
6 Mths 2025
6 Mths 2024
Compensation expense, as reported
$ 243.6
$ 219.2
$ 474.7
$ 433.1
Acquisition integration
(0.6)
-
(1.1)
(0.6)
Workforce and lease termination related charges
(3.3)
(0.9)
(6.1)
(1.7)
Acquisition related adjustments
(1.3)
(0.1)
(1.7)
(0.2)
Levelized foreign currency translation
-
(0.4)
-
(1.6)
Compensation expense, as adjusted
$ 238.4
$ 217.8
$ 465.8
$ 429.0
Reported compensation expense ratios using reported
revenues (before reimbursements) on pages 1 and 2
*
62.2 %
61.1 %
62.0 %
60.9 %
Adjusted compensation expense ratios using adjusted
revenues (before reimbursements) on pages 1 and 2
**
60.9 %
60.9 %
60.9 %
60.5 %
*
Reported second quarter 2025 compensation expense ratio was 1.1 pts higher than second quarter 2024. This ratio was primarily impacted by higher acquisition related adjustments, workforce and lease termination costs, and incentive compensation, partially offset by savings related to headcount ...
