Arthur J. Gallagher & Company
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +5.15%.
Did AJG Beat Earnings? Q1 2025 Results
Arthur J. Gallagher delivered a strong first quarter for 2025, with adjusted EPS of $3.67 beating the $3.58 consensus estimate by 2.52% and revenue of $3.73 billion edging past forecasts by 0.15% on 14.4% year-over-year growth, as CEO J. Patrick Gallagher, Jr. declared the period "fantastic." The primary engine behind the results was a combination of 9% organic revenue growth across the brokerage and risk management segments and $143 million in interest income earned on proceeds from the December 2024 AssuredPartners financing, which helped drive adjusted EBITDAC margin expansion of 338 basis points to 41.1%, marking the company's 20th consecutive quarter of double-digit adjusted EBITDAC growth. The company also completed 11 mergers in the quarter representing roughly $100 million in estimated annualized revenue, and in early April closed the acquisition of Woodruff Sawyer, adding more than $250 million in estimated annual revenue. Looking ahead, management anticipates closing the pending $13.45 billion AssuredPartners acquisition in the second half of 2025, with executives noting no meaningful disruption to client activity from tariffs or geopolitical uncertainty.
- 9% organic revenue growth in combined brokerage and risk management segments
- Brokerage segment organic change in base commissions and fees of 9.1%
- Supplemental revenue organic growth of 21.6%
- Adjusted EBITDAC margin expansion of 338 basis points to 41.1%
- Interest income of approximately $143 million from AssuredPartners financing proceeds
- Savings from headcount controls and office consolidations
- Lower travel and entertainment and technology costs
- Casualty renewal premium increases of 8%
“We had a fantastic first quarter. Our core brokerage and risk management segments combined to deliver 14% revenue growth, including organic revenue growth of 9%. Our first quarter net earnings margin increased 175 basis points to 23.0%, our adjusted EBITDAC margin increased 338 basis points to 41.1%, and adjusted EBITDAC grew year-over-year by 26%, the 20th consecutive quarter of double-digit growth.”
Arthur J. Gallagher CEO, on the earnings call
Forward Guidance & Outlook
The company expects the pending acquisition of AssuredPartners (approximately $13.45 billion) to close in the second half of 2025, pending regulatory approvals. Management noted they are actively responding to the Hart-Scott-Rodino second request received on March 7, 2025. In early April, the company completed the acquisition of Woodruff Sawyer, adding more than $250 million of estimated annual revenue. The CEO expressed excitement about 2025 and beyond, citing positive exposure changes and no meaningful impact from tariffs or geopolitical events on customer business activity. The company expanded its credit facility in April 2025, increasing commitments from $1.7 billion to $2.5 billion and extending maturity to 2030.
AJG YoY Financials
AJG Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.