Arthur J. Gallagher & Co. Announces Third Quarter 2025 Financial Results

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. 

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

*

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. 

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.

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.

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%.   

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

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