Aon (AON) Q1 2025 earnings summary

Executive summary

• Achieved 5% organic and 16% total revenue growth in Q1 2025, driven by the NFP acquisition and robust demand across all major business lines.

• Adjusted operating income grew 12% to $1.82 billion, with adjusted EPS at $5.67, while reported EPS declined 17% to $4.43 due to higher expenses and currency impacts.

• Free cash flow fell 68% to $84 million, reflecting higher incentive, interest, and restructuring payments.

• Increased quarterly dividend by 10%, marking the 15th consecutive year of growth; $397 million returned to shareholders via dividends and buybacks.

• Continued execution of the Aon United strategy and NFP integration, supporting sustainable growth and reaffirmed 2025 guidance.

Financial highlights

• Total revenue rose 16% to $4.7 billion, with 5% organic growth; net income fell 10% to $965 million.

• Adjusted operating margin was 38.4%, down 130 bps year-over-year due to NFP impact; operating margin declined to 30.9%.

• Interest expense increased to $206 million; effective tax rate improved to 21.4%.

• Weighted average diluted shares outstanding rose to 217.9 million.

• Free cash flow was $84 million, down from $261 million a year ago.

Outlook and guidance

• Reaffirmed 2025 outlook for mid-single-digit or greater organic revenue growth, 80-90 bps margin expansion, strong adjusted EPS growth, and double-digit free cash flow growth.

• On track to reach leverage ratio of 2.8-3.0x by Q4 2025.

• NFP's contribution expected to become more meaningful as the year progresses; continued unfavorable currency impact on EPS if current rates persist.