Arthur J. Gallagher & Co.AJG reported third-quarter 2026 adjusted earnings of $3 per share, missing the Zacks Consensus Estimate of $3.01 by 0.3%. The bottom line increased 29.9% year over year.
Revenues of $3.91 billion also missed the consensus estimate of $3.96 billion by 1.3%. Reported revenues before reimbursements rose 18.2% year over year to $3.93 billion, driven by acquisitions and organic growth. Combined Brokerage and Risk Management organic revenues increased 5%.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. Quote
AJG's Revenue Mix Reflects Broad-Based Growth
Commissions climbed 24.3% year over year to $2.37 billion, while fees advanced 15.7% to $1.22 billion. Supplemental revenues increased 26.5% to $148 million, while contingent revenues declined 1.3% to $74 million.
Interest income, premium finance revenues and other income declined 32.3% to $113 million. The prior-year quarter benefited from interest earned on cash proceeds associated with the AssuredPartners financing.
Arthur J. Gallagher's Brokerage Business Delivers Growth
Brokerage revenues increased 18.9% year over year to $3.47 billion. Organic commissions, fees, supplemental and contingent revenues increased 5%, reflecting 4% growth in organic base commissions and fees and a 14% increase in organic supplemental revenues.
Organic contingent revenues remained flat. During the quarter, the segment completed five acquisitions with estimated annualized revenues of $102 million compared with six acquisitions and $3.04 billion of annualized revenues acquired a year earlier.
Adjusted Brokerage EBITDAC increased 25.3% to $1.22 billion. EBITDAC represents earnings before interest, taxes, depreciation, amortization and changes in estimated acquisition earnout payables.
The adjusted EBITDAC margin expanded 200 basis points to 35.3%. The improvement reflected AssuredPartners integration benefits, compensation savings and operating expense efficiencies, partially offset by lower interest income.
AJG's Risk Management Results Show Strength
Risk Management revenues before reimbursements increased 13.7% year over year to $457 million. Reported fees rose to $448 million from $393 million, while organic fees advanced 10%.
The segment did not complete any acquisitions during the quarter, consistent with the prior-year period. Adjusted EBITDAC improved 16.9% to $104 million, while the adjusted margin expanded 90 basis points to 22.8%.
The adjusted compensation expense ratio declined 110 basis points to 58.6%, benefiting from headcount controls and lower employee benefits costs.
However, the adjusted operating expense ratio increased 20 basis points to 18.6%, primarily reflecting additional investments in technology.
Gallagher's Expenses Rise, but Profitability Improves.
Total expenses increased 14.6% year over year to $3.46 billion. Compensation expenses rose 15.8% to $2.24 billion, while operating expenses increased 11% to $645 million.
Amortization increased 31.1% to $291 million, reflecting acquired intangible assets. Interest expenses climbed 4.3% to $168 million, while depreciation increased 7.4% to $58 million.
Reported net earnings surged 48.7% to $406 million, while diluted GAAP earnings increased to $1.55 per share from $1.04. Total-company adjusted EBITDAC advanced 23.7% to $1.25 billion.
The effective tax rate increased slightly to 21.2% from 21.1%. Corporate EBITDAC improved to a negative $89 million from a negative $109 million in the year-ago quarter.
AJG's Balance Sheet and Capital Returns
Arthur J. Gallagher ended the quarter with total assets of $79.06 billion, up 11.9% from year-end 2025. Cash and cash equivalents were $1.21 billion, while total stockholders' equity increased 3.1% to $24.07 billion.
Corporate-related borrowings totaled $12.74 billion, including $1.01 billion classified as current. Gallagher also had $228 million of premium financing debt.
During the quarter, AJG repurchased approximately 0.4 million shares for around $100 million. The company declared dividends of 70 cents per share, up from 65 cents in the year-ago quarter.
Gallagher's Organic Growth Supports Business Momentum
Management highlighted strong client retention, new business generation and continued expansion in clients' businesses as important contributors to quarterly performance.
The combined Brokerage and Risk Management segments delivered 25% growth in net earnings and adjusted EBITDAC. This marked the company's 26th consecutive quarter of double-digit adjusted EBITDAC growth, accompanied by margin expansion.
Management also emphasized growing demand for advice, advocacy, analytics and market access as risks become increasingly complex. The company continues to pursue organic expansion alongside acquisitions to support its diversified growth strategy.
Zacks Rank
Arthur J. Gallagher currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Brokerage Insurers
Willis Towers Watson Public Limited CompanyWTW reported third-quarter 2026 adjusted earnings of $3.63 per share, beating the Zacks Consensus Estimate of $3.60 by 0.8%. The bottom line increased 18% year over year. Revenues rose 8% to $2.46 billion but missed the consensus estimate of $2.47 billion by 0.4%. Organic revenues grew 4%, supported by growth across both operating segments.
Reported revenues increased from $2.29 billion in the prior-year quarter. Excluding foreign-currency movements, revenues advanced 8%. Acquisitions and divestitures contributed 4 percentage points to the quarterly revenue change. Adjusted EBITDA increased 12% year over year to $577 million. The related margin expanded 100 basis points to 23.5%, reflecting improved underlying profitability.
Brown & Brown, Inc.'s BRO third-quarter 2026 adjusted earnings of $1.07 per share missed the Zacks Consensus Estimate by 0.9%. The bottom line increased 1.9% year over year. Revenues of $1.72 billion missed the consensus mark by 2.3% but increased 7.4% year over year on a reported basis. Acquisition activity supported the top line, while organic revenues increased 1.2%.
Commissions and fees increased 9.7% year over year to $1.70 billion, while investment and other income declined 55.4% to $25 million from $56 million. Adjusted EBITDAC margin contracted 200 basis points (bps) to 34.6%. Adjusted EBITDAC increased 1.7% to $597 million, while adjusted income before taxes rose 1.3% to $479 million.
Aon plcAON reported third-quarter 2026 adjusted earnings of $3.36 per share, which surpassed the Zacks Consensus Estimate by 0.6%. The bottom line advanced 10% year over year. Total revenues of $4.1 billion grew 3% year over year. The top line beat the consensus mark by 0.6%. Organic revenue growth was 6%.
Total operating expenses increased 3% year over year to $3.3 billion. The metric exceeded our estimate of $3.2 billion. Adjusted operating income amounted to $1.1 billion, up 5% year over year and in line with our estimate. Adjusted operating margin improved 70 basis points year over year to 27%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
Aon plc (AON) : Free Stock Analysis Report
Brown & Brown, Inc. (BRO) : Free Stock Analysis Report
Willis Towers Watson Public Limited Company (WTW) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
