Arthur J. Gallagher (AJG) Q2 2025 earnings summary

Executive summary

• Q2 2025 total revenues rose 16% year-over-year to $3.22B, with organic growth of 5.4% in brokerage and risk management segments; adjusted EBITDAC grew 26% year-over-year, marking the 21st consecutive quarter of double-digit growth.

• Net earnings reached $366.2M, up 28% year-over-year, with a net earnings margin of 17.3% and adjusted EBITDAC margin of 34.5%, up 307 basis points.

• Major acquisitions included Woodruff Sawyer ($1.2B) and nine other mergers in Q2, with a pending $13.45B AssuredPartners deal expected to close in Q3 2025.

• The AssuredPartners acquisition is funded by $8.5B equity and $5B debt raised in late 2024, with integration planning well underway and no anticipated need for divestitures.

• Dividend per share increased 8% to $0.65 in Q2 2025; no share repurchases under the $1.5B buyback plan in H1 2025.

Financial highlights

• Brokerage segment Q2 revenues: $2.79B (+17% YoY), organic growth 5.3%, adjusted EBITDAC margin 36.4%; risk management Q2 revenues: $391.9M (+9% YoY), organic growth 6.2%, adjusted EBITDAC margin 21.0%.

• Six-month 2025 revenues: $6.95B (+15% YoY); net earnings: $1.08B (+20% YoY); diluted EPS: $4.12 (+3% YoY).

• Interest income surged due to proceeds from AssuredPartners financing, contributing $144.2M in Q2.

• Adjusted diluted EPS for Q2 2025: $2.33 (+2% YoY); for six months: $6.00 (+5% YoY).

• Available cash at June 30, 2025: $14.3B, with no outstanding borrowings under the $2.5B credit facility.

Outlook and guidance

• Brokerage segment organic growth for Q3 and Q4 is expected to be 5%+, with full-year guidance at 6.5%-7.5%.

• Risk management segment full-year organic growth is expected in the 6%-8% range, with full-year margin around 20.5%.

• Integration of Woodruff Sawyer expected to cost $150M; AssuredPartners deal anticipated to close in Q3 2025.

• Effective tax rate guidance: 24.5–26.5% for brokerage, 25–27% for risk management; consolidated effective tax rate for Q2 2025 was 22.3%.

• Clean energy investments expected to generate annual net after-tax cash flows greater than $180M in 2025 and over $200M in 2026 and beyond.