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NEWS RELEASE

ARTHUR J. GALLAGHER & CO. ANNOUNCES

FOURTH QUARTER AND FULL YEAR 2025 FINANCIAL RESULTS

ROLLING MEADOWS, IL, January 29, 2026 — Arthur J. Gallagher & Co. (NYSE: AJG) today reported its financial results for the quarter ended December 31, 2025. Management will host a webcast conference call to discuss these results on Thursday, January 29, 2026 at 5:15 p.m. ET/4:15 p.m. CT. To listen to the call, and for printer-friendly formats of this release and the “CFO Commentary” and “Supplemental Quarterly Data,” which may also be referenced during the call, please visit ajg.com/IR. These documents contain both GAAP and non-GAAP measures. Investors and other users of this information should read carefully the section entitled “Information Regarding Non-GAAP Measures” beginning on page 9.

 

     Summary of Financial Results - Fourth Quarter        
     Revenues Before
Reimbursements		     Net Earnings (Loss)     EBITDAC     Diluted Net Earnings
(Loss) Per Share		  

Segment

    4th Q 25     4th Q 24     4th Q 25     4th Q 24     4th Q 25     4th Q 24     4th Q 25     4th Q 24  
     (in millions)     (in millions)     (in millions)              

Brokerage, as reported

    $ 3,169     $ 2,296     $ 317     $ 317     $ 774     $ 661     $ 1.21     $ 1.37  

Net losses (gains) on divestitures

      (20 )      1       (15 )      1       (20 )      1       (0.06 )      —   

Acquisition integration

      —        —        79       29       106       39       0.30       0.13  

Workforce and lease termination

      —        —        80       23       107       31       0.31       0.10  

Acquisition related adjustments

      —        —        30       40       48       29       0.12       0.17  

Amortization of intangible assets

      —        —        223       121       —        —        0.86       0.53  

Effective income tax rate impact

      —        —        —        1       —        —        —        0.01  

Levelized foreign currency translation

      —        30       —        5       —        8       —        0.02  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Brokerage, as adjusted *

      3,149       2,327       714       537       1,015       769       2.74       2.33  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Risk Management, as reported

      417       369       49       43       84       72       0.19       0.19  

Net (gains) on divestitures

      (1 )      —        (1 )      —        (1 )      —        —        —   

Acquisition integration

      —        —        1       —        2       2       —        —   

Workforce and lease termination

      —        —        1       3       2       2       —        0.01  

Acquisition related adjustments

      —        —        3       —        3       —        0.01       —   

Amortization of intangible assets

      —        —        4       3       —        —        0.02       0.01  

Levelized foreign currency translation

      —        3       —        1       —        1       —        —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Risk Management, as adjusted *

      416       372       58       50       90       77       0.22       0.21  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Corporate, as reported

      —        14       (212 )      (102 )      (148 )      (46 )      (0.82 )      (0.44 ) 

Transaction-related costs

      —        —        27       14       36       17       0.10       0.06  

Legal, tax & benefit plan related

      —        —        34       —        54       —        0.14       —   

Clean energy related

      —        (5 )      —        (1 )      —        (2 )      —        —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Corporate, as adjusted *

      —        9       (151 )      (89 )      (58 )      (31 )      (0.58 )      (0.38 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Company, as reported

    $ 3,586     $ 2,679     $ 154     $ 258     $ 710     $ 687     $ 0.58     $ 1.12  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Company, as adjusted *

    $ 3,565     $ 2,708     $ 620     $ 498     $ 1,047     $ 815     $ 2.38     $ 2.16  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Brokerage & Risk Management, as reported

    $ 3,586     $ 2,665     $ 366     $ 360     $ 858     $ 733     $ 1.40     $ 1.56  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Brokerage & Risk Management, as adjusted *

    $ 3,565     $ 2,699     $ 772     $ 587     $ 1,105     $ 846     $ 2.96     $ 2.54  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

*

For fourth quarter 2025, the pretax impact of the Brokerage segment adjustments totals $533 million, mostly due to non-cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $136 million relating to these items. For fourth quarter 2025, the pretax impact of the Risk Management segment adjustments totals $12 million, with a corresponding adjustment to the provision for income taxes of $3 million relating to these items. For fourth quarter 2025, the pretax impact of the Corporate segment adjustments totals $90 million, with a corresponding adjustment to the benefit for income taxes of $29 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.

 

(1 of 15)

“We had an excellent fourth quarter and a terrific 2025!” said J. Patrick Gallagher, Jr., Chairman and CEO.

“Our two-pronged revenue growth strategy, that’s organic and M&A, drove double-digit top line growth for the 20th straight quarter. Fourth quarter revenue growth for our combined Brokerage and Risk Management segments was in excess of 30% and included organic revenue growth of 5%. Net earnings margin was 10.2%, adjusted EBITDAC margin was 30.8% and adjusted EBITDAC grew 30%.

“We finished 2025 with 21% growth in revenue, 6% organic growth, 26% growth in adjusted EBITDAC and completed 33 mergers with more than $3.5 billion in estimated annualized revenue. Another fantastic year.

“We have excellent momentum entering 2026 and our talented colleagues are executing on our value creation strategy. We are extremely excited about 2026 and believe we are just getting started!”

 

     Summary of Financial Results - Year Ended December 31        
     Revenues Before
Reimbursements		     Net Earnings (Loss)     EBITDAC     Diluted Net Earnings
(Loss) Per Share		  

Segment

    Year 25     Year 24     Year 25     Year 24     Year 25     Year 24     Year 25     Year 24  
     (in millions)     (in millions)     (in millions)              

Brokerage, as reported

    $ 12,192     $ 9,934     $ 2,052     $ 1,686     $ 3,856     $ 3,069     $ 7.85     $ 7.46  

Net (gains) on divestitures

      (24 )      (24 )      (18 )      (18 )      (24 )      (24 )      (0.07 )      (0.08 ) 

Acquisition integration

      —        —        194       143       257       191       0.73       0.63  

Workforce and lease termination

      —        —        136       88       183       118       0.53       0.39  

Acquisition related adjustments

      —        (26 )      127       63       174       121       0.49       0.28  

Amortization of intangible assets

      —        —        668       486       —        —        2.57       2.16  

Effective income tax rate impact

      —        —        —        (7 )      —        —        —        (0.03 ) 

Levelized foreign currency translation

      —        57       —        8       —        13       —        0.04  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Brokerage, as adjusted *

      12,168       9,941       3,159       2,449       4,446       3,488       12.10       10.85  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Risk Management, as reported

      1,585       1,451       183       175       313       290       0.70       0.78  

Net (gains) on divestitures

      (2 )      —        (1 )      —        (2 )      —        —        —   

Acquisition integration

      —        —        7       2       9       3       0.03       0.01  

Workforce and lease termination

      —        —        9       6       12       7       0.03       0.03  

Acquisition related adjustments

      —        —        3       —        4       —        0.01       —   

Amortization of intangible assets

      —        —        16       10       —        —        0.06       0.04  

Levelized foreign currency translation

      —        (1 )      —        —        —        —        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Risk Management, as adjusted *

      1,583       1,450       217       193       336       300       0.83       0.86  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Corporate, as reported

      1       16       (732 )      (390 )      (491 )      (234 )      (2.81 )      (1.74 ) 

Transaction-related costs

      —        —        107       26       122       32       0.41       0.12  

Legal, tax & benefit plan related

      —        —        42       3       78       —        0.16       0.02  

Clean energy-related

      —        (5 )      —        (2 )      —        (2 )      —        (0.01 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Corporate, as adjusted *

      1       11       (583 )      (363 )      (291 )      (204 )      (2.24 )      (1.61 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Company, as reported

    $ 13,778     $ 11,401     $ 1,503     $ 1,471     $ 3,678     $ 3,125     $ 5.74     $ 6.50  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Company, as adjusted *

    $ 13,752     $ 11,402     $ 2,793     $ 2,279     $ 4,491     $ 3,584     $ 10.69     $ 10.10  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Brokerage & Risk Management, as reported

    $ 13,777     $ 11,385     $ 2,235     $ 1,861     $ 4,169     $ 3,359     $ 8.55     $ 8.24  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Brokerage & Risk Management, as adjusted *

    $ 13,751     $ 11,391     $ 3,376     $ 2,642     $ 4,782     $ 3,788     $ 12.93     $ 11.71  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(2 of 15)

*

For the year ended December 31, 2025, the pretax impact of the Brokerage segment adjustments totals $1,482 million, mostly due to non-cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $375 million relating to these items. For the year ended December 31, 2025, the pretax impact of the Risk Management segment adjustments totals $45 million, with a corresponding adjustment to the provision for income taxes of $11 million relating to these items. For the year ended December 31, 2025, the pretax impact of the Corporate segment adjustments totals $200 million, with a corresponding adjustment to the benefit for income taxes of $51 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.

Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):

See “Information Regarding Non-GAAP Measures” on page 9 of 15.

 

Organic Revenues (Non-GAAP)

    4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Base Commissions and Fees

         

Commissions and fees, as reported

    $ 2,841     $ 2,024     $ 10,670     $ 8,887  

Less commissions and fees from acquisitions, divested operations and other

      (882 )      (171 )      (1,598 )      (351 ) 

Levelized foreign currency translation

      —        22       —        48  
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic base commissions and fees

    $ 1,959     $ 1,875     $ 9,072     $ 8,584  
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic change in base commissions and fees

      4 %        6 %   
  

 

 

      

 

 

    

Supplemental Revenues

         

Supplemental revenues, as reported

    $ 132     $ 98     $ 466     $ 359  

Less supplemental revenues from acquisitions, divested operations and other

      (21 )      —        (33 )      —   

Levelized foreign currency translation

      —        1       —        3  
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic supplemental revenues

    $ 111     $ 99     $ 433     $ 362  
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic change in supplemental revenues

      12 %        20 %   
  

 

 

      

 

 

    

Contingent Revenues

         

Contingent revenues, as reported

    $ 83     $ 52     $ 324     $ 268  

Less contingent revenues from acquisitions, divested operations and other

      (24 )      —        (43 )      —   

Levelized foreign currency translation

      —        1       —        1  
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic contingent revenues

    $ 59     $ 53     $ 281     $ 269  
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic change in contingent revenues

      11 %        5 %   
  

 

 

      

 

 

    

Total reported commissions, fees, supplemental revenues and contingent revenues

    $ 3,056     $ 2,174     $ 11,460     $ 9,514  

Less commissions, fees, supplemental revenues and contingent revenues from acquisitions, divested operations and other

      (927 )      (171 )      (1,674 )      (351 ) 

Levelized foreign currency translation

      —        24       —        52  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total organic commissions, fees, supplemental revenues and contingent revenues

    $ 2,129     $ 2,027     $ 9,786     $ 9,215  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total organic change

      5 %        6 %   
  

 

 

      

 

 

    

Acquisition Activity

    4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Number of acquisitions closed *

      6       19       31       46  

Estimated annualized revenues acquired (in millions)

    $ 118     $ 189     $ 3,508     $ 363  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

*

In the fourth quarter of 2025 Gallagher issued 6,000 shares of its common stock directly to sellers in connection with tax-free exchange acquisitions. No shares were issued in fourth quarter 2024 in connection with tax-free exchange acquisitions.

 

(3 of 15)

Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):

See “Information Regarding Non-GAAP Measures” beginning on page 9 of 15.

Acquisition of AssuredPartners

As previously disclosed, on August 18, 2025, we acquired AssuredPartners for approximately $13.8 billion. We raised $8.5 billion of cash in our December 11, 2024 follow-on common stock offering and borrowed $5.0 billion of cash in our December 19, 2024 senior notes issuance (collectively, the AssuredPartners Financing) to fund the transaction. On January 7, 2025, we received an additional $1.3 billion of cash due to the exercise by the underwriters of the overallotment provision related to the follow-on common stock offering.

 

Compensation Expense and Ratios

          4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Compensation expense, as reported

      $ 1,868     $ 1,291     $ 6,660     $ 5,502  

Acquisition integration

        (49 )      (24 )      (135 )      (107 ) 

Workforce and lease termination related charges

        (103 )      (27 )      (171 )      (108 ) 

Acquisition related adjustments

        (48 )      (29 )      (174 )      (147 ) 

Levelized foreign currency translation

        —        14       —        30  
    

 

 

    

 

 

    

 

 

    

 

 

  

Compensation expense, as adjusted

      $ 1,668     $ 1,225     $ 6,180     $ 5,170  
    

 

 

    

 

 

    

 

 

    

 

 

  

Reported compensation expense ratios using reported revenues on pages 1 and 2

      *       59.0 %      56.2 %      54.6 %      55.4 % 
    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted compensation expense ratios using adjusted revenues on pages 1 and 2

      * *      53.0 %      52.6 %      50.8 %      52.0 % 
    

 

 

    

 

 

    

 

 

    

 

 

  

 

*

Reported fourth quarter 2025 compensation expense ratio was 2.8 pts higher than fourth quarter 2024. This ratio was primarily impacted by higher integration and workforce termination costs, as well as the impact of recent acquisitions and . lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

**

Adjusted fourth quarter 2025 compensation expense ratio was 0.4 pts higher than fourth quarter 2024. This ratio was primarily impacted by recent acquisitions as well as lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

 

Operating Expense and Ratios

          4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Operating expense, as reported

      $ 527     $ 344     $ 1,676     $ 1,363  

Acquisition integration

        (57 )      (15 )      (122 )      (84 ) 

Workforce and lease termination related charges

        (4 )      (4 )      (13 )      (10 ) 

Levelized foreign currency translation

        —        8       —        14  
    

 

 

    

 

 

    

 

 

    

 

 

  

Operating expense, as adjusted

      $ 466     $ 333     $ 1,541     $ 1,283  
    

 

 

    

 

 

    

 

 

    

 

 

  

Reported operating expense ratios using reported revenues on pages 1 and 2

      *       16.6 %      15.0 %      13.8 %      13.7 % 
    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted operating expense ratios using adjusted revenues on pages 1 and 2

      * *      14.8 %      14.3 %      12.7 %      12.9 % 
    

 

 

    

 

 

    

 

 

    

 

 

  

 

*

Reported fourth quarter 2025 operating expense ratio was 1.6 pts higher than fourth quarter 2024. This ratio was primarily impacted by higher integration and technology costs, partially offset by savings in professional fees. This ratio was also impacted by lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

**

Adjusted fourth quarter 2025 operating expense ratio was 0.5 pts higher than fourth quarter 2024. This ratio was primarily impacted by increased technology costs, partially offset by savings in professional fees. This ratio was also impacted by lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

 

(4 of 15)

Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):

See “Information Regarding Non-GAAP Measures” on page 9 of 15.

 

Net Earnings to Adjusted EBITDAC (Non-GAAP)

           4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Net earnings, as reported

       $ 317     $ 317     $ 2,052     $ 1,686  

Provision for income taxes

         107       108       707       573  

Depreciation

         46       34       159       133  

Amortization

         298       163       894       651  

Change in estimated acquisition earnout payables

         6       39       44       26  
     

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC

         774       661       3,856       3,069  

Net losses (gains) on divestitures

         (20 )      1       (24 )      (24 ) 

Acquisition integration

         106       39       257       191  

Workforce and lease termination related charges

         107       31       183       118  

Acquisition related adjustments

         48       29       174       121  

Levelized foreign currency translation

         —        8       —        13  
     

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC, as adjusted

       $ 1,015     $ 769     $ 4,446     $ 3,488  
     

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings margin, as reported using reported revenues on pages 1 and 2

      *        10.0 %      13.8 %      16.8 %      17.0 % 
     

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC margin, as adjusted using adjusted revenues on pages 1 and 2

      *        32.2 %      33.0 %      36.5 %      35.1 % 
     

 

 

    

 

 

    

 

 

    

 

 

  

 

*

Fourth quarter 2024 adjusted EBITDAC margin includes approximately $20 million of interest income revenues earned on the proceeds received in December 2024 related to the AssuredPartners Financing. This interest income in the prior period, as well as the seasonality of AssuredPartners and the roll-in of tuck-in acquisitions, unfavorably impacted the year over year change in fourth quarter adjusted EBITDAC margin by approximately 1.3%.

Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):

See “Information Regarding Non-GAAP Measures” on page 9 of 15.

 

Organic Revenues (Non-GAAP)

    4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Fees

    $ 403     $ 357     $ 1,538     $ 1,406  

International performance bonus fees

      5       3       11       8  
  

 

 

    

 

 

    

 

 

    

 

 

  

Fees as reported

      408       360       1,549       1,414  

Less fees from acquisitions

      (21 )      —        (60 )      —   

Less divested operations

      —        (2 )      —        (9 ) 

Levelized foreign currency translation

      —        3       —        (1 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic fees

    $ 387     $ 361     $ 1,489     $ 1,404  
  

 

 

    

 

 

    

 

 

    

 

 

  

Organic change in fees

      7 %        6 %   
  

 

 

      

 

 

    

Acquisition Activity

    4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Number of acquisitions closed

      1       1       2       2  

Estimated annualized revenues acquired (in millions)

    $ 16     $ 10     $ 54     $ 24  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

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Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):

See “Information Regarding Non-GAAP Measures” beginning on page 9 of 15.

 

Compensation Expense and Ratios

           4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Compensation expense, as reported

       $ 255     $ 225     $ 974     $ 882  

Acquisition integration

         (1 )      (1 )      (3 )      (2 ) 

Workforce and lease termination related charges

         —        (1 )      (9 )      (4 ) 

Acquisition related adjustments

         (2 )      —        (4 )      —   

Levelized foreign currency translation

         —        1       —        (2 ) 
     

 

 

    

 

 

    

 

 

    

 

 

  

Compensation expense, as adjusted

       $ 252     $ 224     $ 958     $ 874  
     

 

 

    

 

 

    

 

 

    

 

 

  

Reported compensation expense ratios using reported revenues (before reimbursements) on pages 1 and 2

      *        61.2 %      61.0 %      61.5 %      60.8 % 
     

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted compensation expense ratios using adjusted revenues (before reimbursements) on pages 1 and 2

      *        60.6 %      60.2 %      60.5 %      60.3 % 
     

 

 

    

 

 

    

 

 

    

 

 

  

 

*

Reported fourth quarter 2025 compensation expense ratio was 0.2 pts higher than fourth quarter 2024. Adjusted fourth quarter 2025 compensation ratio was 0.4 pts higher than fourth quarter 2024. Both ratios were primarily impacted by increased incentive compensation, partially offset by savings related to headcount controls.

 

Operating Expense and Ratios

          4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Operating expense, as reported

      $ 78     $ 72     $ 298     $ 279  

Acquisition integration

        (3 )      (1 )      (6 )      (1 ) 

Workforce and lease termination related charges

        (1 )      (1 )      (3 )      (3 ) 

Levelized foreign currency translation

        —        1       —        1  
    

 

 

    

 

 

    

 

 

    

 

 

  

Operating expense, as adjusted

      $ 74     $ 71     $ 289     $ 276  
    

 

 

    

 

 

    

 

 

    

 

 

  

Reported operating expense ratios using reported revenues (before reimbursements) on pages 1 and 2

      *       18.7 %      19.5 %      18.8 %      19.2 % 
    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted operating expense ratios using reported revenues (before reimbursements) on pages 1 and 2

      * *      17.8 %      19.1 %      18.3 %      19.0 % 
    

 

 

    

 

 

    

 

 

    

 

 

  

 

*

Reported fourth quarter 2025 operating expense ratio was 0.8 pts lower than fourth quarter 2024. This ratio was primarily impacted by savings in client-related expenses and lower business insurance costs, partially offset by increased integration costs.

**

Adjusted fourth quarter 2025 operating expense ratio was 1.3 pts lower than fourth quarter 2024. This ratio was primarily impacted by savings in client-related expenses and lower business insurance costs.

 

Net Earnings to Adjusted EBITDAC (Non-GAAP)

    4th Q 2025     4th Q 2024     Year 2025     Year 2024  

Net earnings, as reported

    $ 49     $ 43     $ 183     $ 175  

Provision for income taxes

      18       15       66       63  

Depreciation

      10       10       40       38  

Amortization

      6       4       22       14  

Change in estimated acquisition earnout payables

      1       —        2       —   
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC

      84       72       313       290  

Net (gains) on divestitures

      (1 )      —        (2 )      —   

Acquisition integration

      2       2       9       3  

Workforce and lease termination related charges

      2       2       12       7  

Acquisition related adjustments

      3       —        4       —   

Levelized foreign currency translation

      —        1       —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC, as adjusted

    $ 90     $ 77     $ 336     $ 300  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings margin, as reported using reported revenues (before reimbursements) on pages 1 and 2

      11.8 %      11.7 %      11.6 %      12.1 % 
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC margin, as adjusted using adjusted revenues (before reimbursements) on pages 1 and 2

      21.6 %      20.7 %      21.2 %      20.6 % 
  

 

 

    

 

 

    

 

 

    

 

 

  

 

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Corporate Segment Reported GAAP to Adjusted Non-GAAP Reconciliation (dollars in millions):

See “Information Regarding Non-GAAP Measures” beginning on page 9 of 15.

 

     2025     2024  

4th Quarter

    Pretax
Loss		     Income
Tax
Benefit		     Net Earnings
(Loss)
Attributable to
Controlling
Interests		     Pretax
Loss		     Income
Tax
Benefit		     Net Earnings
(Loss)
Attributable to
Controlling
Interests		  

Components of Corporate Segment, as reported

             

Interest and banking costs

    $ (162 )    $ 42     $ (120 )    $ (94 )    $ 24     $ (70 ) 

Clean energy related

      (2 )      1       (1 )      —        —        —   

Acquisition costs (1)

      (41 )      9       (32 )      (24 )      5       (19 ) 

Corporate (2)

      (106 )      47       (59 )      (32 )      19       (13 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reported 4th Quarter

      (311 )      99       (212 )      (150 )      48       (102 ) 

Adjustments

             

Clean energy related

      —        —        —        (2 )      —        (2 ) 

Transaction-related costs (1)

      36       (9 )      27       17       (2 )      15  

Legal and tax related (3)

      10       (9 )      1       —        —        —   

Benefit plan related (4)

      44       (11 )      33       —        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Components of Corporate Segment, as adjusted

             

Interest and banking costs

      (162 )      42       (120 )      (94 )      24       (70 ) 

Clean energy related

      (2 )      1       (1 )      (2 )      —        (2 ) 

Acquisition costs

      (5 )      —        (5 )      (7 )      3       (4 ) 

Corporate (2)

      (52 )      27       (25 )      (32 )      19       (13 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted 4th Quarter

    $ (221 )    $ 70     $ (151 )    $ (135 )    $ 46     $ (89 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Year Ended December 31,

                                     

Components of Corporate Segment, as reported

             

Interest and banking costs

    $ (642 )    $ 167     $ (475 )    $ (376 )    $ 97     $ (279 ) 

Clean energy related

      (8 )      3       (5 )      (6 )      1       (5 ) 

Acquisition costs (1)

      (139 )      17       (122 )      (51 )      10       (41 ) 

Corporate (2)

      (348 )      218       (130 )      (189 )      124       (65 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reported year

      (1,137 )      405       (732 )      (622 )      232       (390 ) 

Adjustments

             

Clean energy related

      —        —        —        (2 )      —        (2 ) 

Transaction-related costs (1)

      122       (15 )      107       32       (6 )      26  

Legal and tax related (3)

      34       (25 )      9       —        3       3  

Benefit plan related (4)

      44       (11 )      33       —        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Components of Corporate Segment, as adjusted

             

Interest and banking costs

      (642 )      167       (475 )      (376 )      97       (279 ) 

Clean energy related

      (8 )      3       (5 )      (8 )      1       (7 ) 

Acquisition costs

      (17 )      2       (15 )      (19 )      4       (15 ) 

Corporate (2)

      (270 )      182       (88 )      (189 )      127       (62 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted Year

    $ (937 )    $ 354     $ (583 )    $ (592 )    $ 229     $ (363 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(1)

Gallagher incurred transaction-related costs, which include legal, consulting, employee compensation and other professional fees associated with completed, future and terminated acquisitions. Adjustments primarily relate to the acquisition of the Willis Towers Watson treaty reinsurance brokerage operations, the acquisitions of Buck, Cadence Insurance, Eastern Insurance Group, all of which closed in 2023, as well as Woodruff Sawyer and AssuredPartners, which closed in April 2025 and August 2025, respectively.

(2)

Corporate pretax loss includes a net unrealized foreign exchange remeasurement loss of $(4) million in fourth quarter 2025 and a net unrealized foreign exchange remeasurement gain of $16 million in fourth quarter 2024. Corporate pretax loss includes a net unrealized foreign exchange remeasurement loss of $(47) million in the year ended December 31, 2025 and a net unrealized foreign exchange remeasurement loss of zero in the year ended December 31, 2024.

 

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(3)

Adjustments in fourth quarter 2025 and 2024 include costs associated with legal and tax matters.

(4)

Adjustments in fourth quarter 2025 include costs associated with the termination of the Gallagher US defined pension plan and other benefit plan changes.

Interest and banking costs and debt - At December 31, 2025, Gallagher had $9,550 million of borrowings from public debt, $3,323 million of borrowings from private placements and no borrowings under its line of credit facility. In addition, Gallagher had $226 million outstanding under a revolving loan facility that provides funding for premium finance receivables, which are fully collateralized by the underlying premiums held by insurance carriers, and as such are excluded from its debt covenant computations, as applicable. Interest and banking costs in fourth quarter 2025 are higher than the same period in 2024 primarily due to the debt issuances that occurred in December 2024.

Clean energy related - For 2025, this consists of operating results related to Gallagher’s investments in new clean energy projects, primarily fusion and carbon sequestration projects.

Acquisition costs - Consists mostly of external professional fees and other due diligence costs related to acquisitions. On occasion, Gallagher enters into forward currency hedges for the purchase price of committed, but not yet funded, acquisitions with funding requirements in currencies other than the U.S. dollar. The gains or losses, if any, associated with these hedge transactions are also included in acquisition costs.

Corporate - Consists of overhead allocations mostly related to corporate staff compensation, other corporate level activities, and net unrealized foreign exchange remeasurement. In addition, it includes the tax expense related to the partial taxation of foreign earnings, nondeductible executive compensation and entertainment expenses, the tax benefit from the vesting of employee equity awards, as well as other permanent or discrete tax items not reflected in the provision for income taxes in the Brokerage and Risk Management segments.

Income Taxes - Gallagher allocates the provision for income taxes to its Brokerage and Risk Management segments using the local country statutory rates. Gallagher’s consolidated effective tax rate for the quarters ended December 31, 2025 and 2024 were 14.3% and 22.5%, respectively. Gallagher’s consolidated effective tax rate for the year ended December 31, 2025 and 2024 were 19.7% and 21.5%, respectively

Webcast Conference Call - Gallagher will host a webcast conference call on Thursday, January 29, 2026 at 5:15 p.m. ET/4:15 p.m. CT. To listen to this call, please go to Arthur J. Gallagher & Co. - Events & Presentations (ajg.com). The call will be available for replay at such website for at least 90 days.

About Arthur J. Gallagher & Co.

Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. Gallagher provides these services in approximately 130 countries around the world through its owned operations and a network of correspondent brokers and consultants.

Information Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipates,” “believes,” “contemplates,” “see,” “should,” “could,” “will,” “estimates,” “expects,” “intends,” “plans” and variations thereof and similar expressions, are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, anticipated future results or performance of any segment or Gallagher as a whole; acquisition rollover revenues, statements regarding changes in its expenses in the next several quarters; future capital structure changes, including debt levels from time to time; the impact of foreign currency on its results; integration costs; workforce and lease termination costs; amortization of intangibles; depreciation; change in estimated earnout payables; effective tax rate; earnings from continuing operations attributable to noncontrolling interests; the premium rate environment and the state of insurance markets; and the economic environment.

Gallagher’s actual results may differ materially from those contemplated by the forward-looking statements. Readers are therefore cautioned against relying on any of the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance.

 

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Important factors that could cause actual results to differ materially from those in the forward-looking statements include global economic and geopolitical events, including, among others, fluctuations in interest and inflation rates; geo-economic fragmentation and protectionism such as tariffs, trade wars or similar governmental actions affecting the flows of goods, services or currency; a U.S. government shutdown; political violence and instability, such as the armed conflicts in Ukraine the Middle East, Latin America and the Caribbean; its actual acquisition opportunities, including closing risks related to pending acquisitions, risks with respect to larger acquisitions such as AssuredPartners, the largest acquisition in our history, including risks related to its ability to successfully integrate operations, the possibility that its assumptions may be inaccurate resulting in unforeseen obligations or liabilities and failure to realize the expected benefits of these acquisitions; damage to its reputation due to its failure to uphold its culture or negative perceptions or publicity, including as a result of amplifying effects that the Internet and social media may have on such perceptions; reputational issues related to its sustainability-related activities, including potential backlash against such activities, and compliance with increasingly complex climate- and other sustainability- related regulations, such as risks related to “greenwashing” and “greenhushing”; cybersecurity-related risks; its ability to apply technology, data analytics and artificial intelligence effectively and potential increased costs resulting from such activities; risks associated with the use of artificial intelligence in its business operations, including regulatory, data privacy, cybersecurity, errors and omissions, intellectual property and competition risks; heightened competition for talent and increased compensation costs; disasters or other business interruptions, including with respect to its operations in India; risks related to its international operations, such as those related to regulatory, tax, sustainability, sanctions and anti-corruption compliance and increased scrutiny of the use of off-shore centers of excellence such as those we operate in India and elsewhere; changes to data privacy and protection laws and regulations; foreign exchange rates; changes in accounting standards; changes in premium rates and in insurance markets generally, including the impact of large or man-made natural events; tax, environmental or other compliance risks related to its legacy clean energy investments; its inability to receive dividends or other distributions from subsidiaries; and changes in the insurance brokerage industry’s competitive landscape.

Please refer to Gallagher’s filings with the Securities and Exchange Commission, including Item 1A, “Risk Factors,” of its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and its subsequently filed Quarterly Reports on Form 10-Q for a more detailed discussion of these and other factors that could impact its forward-looking statements. Any forward-looking statement made by Gallagher in this press release speaks only as of the date on which it is made. Except as required by applicable law, Gallagher does not undertake to update the information included herein or the corresponding earnings release posted on Gallagher’s website.

Information Regarding Non-GAAP Measures

In addition to reporting financial results in accordance with GAAP, this press release provides information regarding EBITDAC, EBITDAC margin, adjusted EBITDAC, adjusted EBITDAC margin, diluted net earnings per share, as adjusted (adjusted EPS), adjusted revenue, adjusted compensation and operating expenses, adjusted compensation expense ratio, adjusted operating expense ratio and organic revenue. These measures are not in accordance with, or an alternative to, the GAAP information provided in this press release. Gallagher’s management believes that these presentations provide useful information to management, analysts and investors regarding financial and business trends relating to Gallagher’s results of operations and financial condition or because they provide investors with measures that its chief operating decision maker uses when reviewing Gallagher’s performance. See further below for definitions and additional reasons each of these measures is useful to investors. Gallagher’s industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments. The non-GAAP information provided by Gallagher should be used in addition to, but not as a substitute for, the GAAP information provided. As disclosed in its most recent Proxy Statement, Gallagher makes determinations regarding certain elements of executive officer incentive compensation, performance share awards and annual cash incentive awards, partly on the basis of measures related to adjusted EBITDAC.

Adjusted Non-GAAP presentation - Gallagher believes that the adjusted non-GAAP presentations of the current and prior period information presented in this earnings release provide stockholders and other interested persons with useful information regarding certain financial metrics of Gallagher that may assist such persons in analyzing Gallagher’s operating results as they develop a future earnings outlook for Gallagher. The after-tax amounts related to the adjustments were computed using the normalized effective tax rate for each respective period. See pages 14 and 15 for a reconciliation of the adjustments made to income taxes.

 

  •  

Adjusted measures - Revenues (for the Brokerage segment), revenues before reimbursements (for the Risk Management segment), net earnings, compensation expense and operating expense, respectively, each adjusted to exclude the following, as applicable:

 

  •  

Net gains (losses) on divestitures, which are primarily net proceeds received related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure.

 

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  •  

Acquisition integration costs, which include costs related to certain large acquisitions (including the acquisitions of the Willis Towers Watson treaty reinsurance brokerage operations, Buck, Cadence Insurance, Eastern Insurance Group, My Plan Manager, Woodruff Sawyer and AssuredPartners), outside the scope of the usual tuck-in strategy, not expected to occur on an ongoing basis in the future once Gallagher fully assimilates the applicable acquisition. These costs are typically associated with redundant workforce, compensation expense related to amortization of certain retention bonus arrangements, extra lease space, duplicate services and external costs incurred to assimilate the acquisition into its IT related systems.

 

  •  

Transaction-related costs, which are associated with completed, future and terminated acquisitions. Costs primarily relate to the acquisitions of the Willis Towers Watson treaty reinsurance brokerage operations, Buck, Cadence Insurance, Eastern Insurance Group, all of which closed in 2023, as well as Woodruff Sawyer and AssuredPartners, which closed in April 2025 and August 2025, respectively. These include costs related to regulatory filings, legal and accounting services, insurance and incentive compensation.

 

  •  

Workforce related charges, which primarily include severance costs (either accrued or paid) related to employee terminations and other costs associated with redundant workforce.

 

  •  

Lease termination related charges, which primarily include costs related to terminations of real estate leases and abandonment of leased space.

 

  •  

Acquisition related adjustments principally relate to changes in estimated acquisition earnout payables adjustments and acquisition related compensation charges. In addition, from time to time may include changes in balance sheet estimates arising from conforming accounting principles, purchase-related true-ups and other balance sheet adjustments made after the closing date; the net impact of these on first quarter 2024 results was approximately $26 million of revenues and approximately $28 million of compensation expense.

 

  •  

Amortization of intangible assets, which reflects the amortization of customer/expiration lists, non-compete agreements, trade names and other intangible assets acquired through Gallagher’s merger and acquisition strategy, the impact to amortization expense of acquisition valuation adjustments to these assets as well as non-cash impairment charges.

 

  •  

The impact of foreign currency translation, as applicable. The amounts excluded with respect to foreign currency translation are calculated by applying current year foreign exchange rates to the same period in the prior year.

 

  •  

Effective income tax rate impact, which levelizes the prior year for the change in current year tax rates.

 

  •  

Legal and tax related, which represents the impact of adjustments in fourth quarter 2025 and 2024 related to costs associated with legal and tax matters.

 

  •  

Benefit plan related, which represents the impact of adjustments in fourth quarter 2025 related to costs associated with the termination of the Gallagher US defined pension plan and other benefit plan changes.

 

  •  

Adjusted ratios - Adjusted compensation expense and adjusted operating expense, respectively, each divided by adjusted revenues.

Non-GAAP Earnings Measures

 

  •  

EBITDAC and EBITDAC margin - EBITDAC is net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables and EBITDAC margin is EBITDAC divided by total revenues (for the Brokerage segment) and revenues before reimbursements (for the Risk Management segment). These measures for the Brokerage and Risk Management segments provide a meaningful representation of Gallagher’s operating performance for the overall business and provide a meaningful way to measure its financial performance on an ongoing basis.

 

  •  

EBITDAC, as Adjusted and EBITDAC Margin, as Adjusted - Adjusted EBITDAC is EBITDAC adjusted to exclude net gains on divestitures, acquisition integration costs, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, and the period-over-period impact of foreign currency translation, as applicable, and Adjusted EBITDAC margin is Adjusted EBITDAC divided by total adjusted revenues (defined above). These measures for the Brokerage and Risk Management segments provide a meaningful representation of Gallagher’s operating performance and are also presented to improve the comparability of its results between periods by eliminating the impact of the items that have a high degree of variability.

 

  •  

EPS, as Adjusted and Net Earnings, as Adjusted—Adjusted net earnings have been adjusted to exclude the after-tax impact of net gains on divestitures, acquisition integration costs, the impact of foreign currency translation, workforce related charges, lease termination related charges, acquisition related adjustments, transaction related costs, amortization of intangible assets, and effective income tax rate impact, as applicable. Adjusted EPS is Adjusted Net Earnings divided by diluted weighted average shares outstanding. This measure provides a meaningful representation of Gallagher’s operating performance (and as such should not be used as a measure of Gallagher’s liquidity), and for the overall business is also presented to improve the comparability of its results between periods by eliminating the impact of the items that have a high degree of variability.

 

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Organic Revenues (a non-GAAP measure) - Organic revenue change measures the year-over-year percentage change in organic revenue. For the Brokerage segment, organic revenue consists of base commission and fee revenues, supplemental revenues and contingent revenues, excluding the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations, which include disposals of a business through sale or closure, estimate changes, run-off of a business and the restructuring and/or repricing of programs and products, in each period presented. Such revenues are excluded from organic revenues in order to help interested persons analyze the revenue growth associated with the operations that were a part of Gallagher in both the current and prior period. In order to improve the comparability of Gallagher’s results between periods, we further exclude the period-over-period impact of foreign currency translation; revenue from certain large life product sales within Gallagher’s Executive Life and Benefits practice group (which are typically large, singular transactions with a high degree of variability in amount and timing); and revenue attributable to changes in assumptions used to calculate estimated deferred revenues, which impact the quarterly timing of revenues during the annual contract period. For the Risk Management segment, organic revenue consists of fee revenues excluding the first twelve months of such revenues generated from acquisitions and such revenues related to divested operations in each period presented. In order to improve the comparability of Gallagher’s results between periods, we further exclude the period-over-period impact of foreign currency translation.

These revenue items are excluded from organic revenues in order to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that are expected to continue in the current year and beyond, as well as eliminating the impact of the items that have a high degree of variability. Gallagher has historically viewed organic revenue growth as an important indicator when assessing and evaluating the performance of its Brokerage and Risk Management segments. Gallagher also believes that using this non-GAAP measure allows readers of its financial statements to measure, analyze and compare the growth from its Brokerage and Risk Management segments in a meaningful and consistent manner.

Reconciliation of Non-GAAP Information Presented to GAAP Measures - This press release includes tabular reconciliations to the most comparable GAAP measures, as follows: for EBITDAC (on pages 12 and 13), for adjusted revenues, adjusted EBITDAC and adjusted diluted net earnings per share (on pages 1 and 2), for organic revenue measures (on pages 3 and 5, respectively, for the Brokerage and Risk Management segments), for adjusted compensation and operating expenses and adjusted EBITDAC margin (on pages 4, 5 and 6 respectively, for the Brokerage and Risk Management segments).

 

(11 of 15)

Arthur J. Gallagher & Co.

Reported Statement of Earnings and EBITDAC - 4th Quarter December 31,

(Unaudited - in millions except per share, percentage and workforce data)

 

Brokerage Segment

    4th Q Ended
Dec 31, 2025		      4th Q Ended
Dec 31, 2024		      Year Ended
Dec 31, 2025		      Year Ended
Dec 31, 2024		  

Commissions

    $ 2,059      $ 1,501      $ 8,024      $ 6,694  

Fees

      782        523        2,646        2,193  

Supplemental revenues

      132        98        466        359  

Contingent revenues

      83        52        324        268  

Interest income, premium finance revenues and other income

      113        122        732        420  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total revenues

      3,169        2,296        12,192        9,934  
  

 

 

     

 

 

     

 

 

     

 

 

  

Compensation

      1,868        1,291        6,660        5,502  

Operating

      527        344        1,676        1,363  

Depreciation

      46        34        159        133  

Amortization

      298        163        894        651  

Change in estimated acquisition earnout payables

      6        39        44        26  
  

 

 

     

 

 

     

 

 

     

 

 

  

Expenses

      2,745        1,871        9,433        7,675  
  

 

 

     

 

 

     

 

 

     

 

 

  

Earnings before income taxes

      424        425        2,759        2,259  

Provision for income taxes

      107        108        707        573  
  

 

 

     

 

 

     

 

 

     

 

 

  

Net earnings

      317        317        2,052        1,686  

Net earnings attributable to noncontrolling interests

      3        —         9        8  
  

 

 

     

 

 

     

 

 

     

 

 

  

Net earnings attributable to controlling interests

    $ 314      $ 317      $ 2,043      $ 1,678  
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDAC

            

Net earnings

    $ 317      $ 317      $ 2,052      $ 1,686  

Provision for income taxes

      107        108        707        573  

Depreciation

      46        34        159        133  

Amortization

      298        163        894        651  

Change in estimated acquisition earnout payables

      6        39        44        26  
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDAC

    $ 774      $ 661      $ 3,856      $ 3,069  
  

 

 

     

 

 

     

 

 

     

 

 

  

Risk Management Segment

    4th Q Ended
Dec 31, 2025		      4th Q Ended
Dec 31, 2024		      Year Ended
Dec 31, 2025		      Year Ended
Dec 31, 2024		  

Fees

    $ 408      $ 360      $ 1,549      $ 1,414  

Interest income and other income

      9        9        36        37  
  

 

 

     

 

 

     

 

 

     

 

 

  

Revenues before reimbursements

      417        369        1,585        1,451  

Reimbursements

      42        36        164        154  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total revenues

      459        405        1,749        1,605  
  

 

 

     

 

 

     

 

 

     

 

 

  

Compensation

      255        225        974        882  

Operating

      78        72        298        279  

Reimbursements

      42        36        164        154  

Depreciation

      10        10        40        38  

Amortization

      6        4        22        14  

Change in estimated acquisition earnout payables

      1        —         2        —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Expenses

      392        347        1,500        1,367  
  

 

 

     

 

 

     

 

 

     

 

 

  

Earnings before income taxes

      67        58        249        238  

Provision for income taxes

      18        15        66        63  
  

 

 

     

 

 

     

 

 

     

 

 

  

Net earnings

      49        43        183        175  

Net earnings attributable to noncontrolling interests

      —         —         —         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Net earnings attributable to controlling interests

    $ 49      $ 43      $ 183      $ 175  
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDAC

            

Net earnings

    $ 49      $ 43      $ 183      $ 175  

Provision for income taxes

      18        15        66        63  

Depreciation

      10        10        40        38  

Amortization

      6        4        22        14  

Change in estimated acquisition earnout payables

      1        —         2        —   
  

 

 

     

 

 

     

 

 

     

 

 

  

EBITDAC

    $ 84      $ 72      $ 313      $ 290  
  

 

 

     

 

 

     

 

 

     

 

 

  

See “Information Regarding Non-GAAP Measures” beginning on page 9 of 15.

 

(12 of 15)

Arthur J. Gallagher & Co.

Reported Statement of Earnings and EBITDAC - 4th Quarter December 31,

(Unaudited - in millions except share and per share data)

 

Corporate Segment

    4th Q Ended
Dec 31, 2025		     4th Q Ended
Dec 31, 2024		     Year Ended
Dec 31, 2025		     Year Ended
Dec 31, 2024		  

Other income

    $ —      $ 14     $ 1     $ 16  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      —        14       1       16  
  

 

 

    

 

 

    

 

 

    

 

 

  

Compensation

      86       38       208       138  

Operating

      62       22       284       112  

Interest

      161       102       639       381  

Depreciation

      2       2       7       7  
  

 

 

    

 

 

    

 

 

    

 

 

  

Expenses

      311       164       1,138       638  
  

 

 

    

 

 

    

 

 

    

 

 

  

Loss before income taxes

      (311 )      (150 )      (1,137 )      (622 ) 

Benefit for income taxes

      (99 )      (48 )      (405 )      (232 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net loss

      (212 )      (102 )      (732 )      (390 ) 

Net loss attributable to noncontrolling interests

      —        —        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net loss attributable to controlling interests

    $ (212 )    $ (102 )    $ (732 )    $ (390 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC

         

Net loss

    $ (212 )    $ (102 )    $ (732 )    $ (390 ) 

Benefit for income taxes

      (99 )      (48 )      (405 )      (232 ) 

Interest

      161       102       639       381  

Depreciation

      2       2       7       7  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC

    $ (148 )    $ (46 )    $ (491 )    $ (234 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total Company

    4th Q Ended
Dec 31, 2025		     4th Q Ended
Dec 31, 2024		     Year Ended
Dec 31, 2025		     Year Ended
Dec 31, 2024		  

Commissions

    $ 2,059     $ 1,501     $ 8,024     $ 6,694  

Fees

      1,190       883       4,195       3,607  

Supplemental revenues

      132       98       466       359  

Contingent revenues

      83       52       324       268  

Interest income, premium finance revenues and other income

      122       145       769       473  
  

 

 

    

 

 

    

 

 

    

 

 

  

Revenues before reimbursements

      3,586       2,679       13,778       11,401  

Reimbursements

      42       36       164       154  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      3,628       2,715       13,942       11,555  
  

 

 

    

 

 

    

 

 

    

 

 

  

Compensation

      2,209       1,554       7,842       6,522  

Operating

      667       438       2,258       1,754  

Reimbursements

      42       36       164       154  

Interest

      161       102       639       381  

Depreciation

      58       46       206       178  

Amortization

      304       167       916       665  

Change in estimated acquisition earnout payables

      7       39       46       26  
  

 

 

    

 

 

    

 

 

    

 

 

  

Expenses

      3,448       2,382       12,071       9,680  
  

 

 

    

 

 

    

 

 

    

 

 

  

Earnings before income taxes

      180       333       1,871       1,875  

Provision for income taxes

      26       75       368       404  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings

      154       258       1,503       1,471  

Net earnings attributable to noncontrolling interests

      3       —        9       8  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings attributable to controlling interests

    $ 151     $ 258     $ 1,494     $ 1,463  
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted net earnings per share

    $ 0.58     $ 1.12     $ 5.74     $ 6.50  
  

 

 

    

 

 

    

 

 

    

 

 

  

Dividends declared per share

    $ 0.65     $ 0.60     $ 2.60     $ 2.40  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC

         

Net earnings

    $ 154     $ 258     $ 1,503     $ 1,471  

Provision for income taxes

      26       75       368       404  

Interest

      161       102       639       381  

Depreciation

      58       46       206       178  

Amortization

      304       167       916       665  

Change in estimated acquisition earnout payables

      7       39       46       26  
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDAC

    $ 710     $ 687     $ 3,678     $ 3,125  
  

 

 

    

 

 

    

 

 

    

 

 

  

See “Information Regarding Non-GAAP Measures” beginning on page 9 of 15.

 

(13 of 15)

Arthur J. Gallagher & Co.

Consolidated Balance Sheet

(Unaudited - in millions except per share data)

 

     Dec 31, 2025     Dec 31, 2024  

Cash and cash equivalents

    $ 1,396     $ 14,987  

Fiduciary assets (includes fiduciary cash of $7,142 in 2025 and $5,481 in 2024)

      26,899       24,712  

Accounts receivable, net

      5,175       3,896  

Other current assets

      886       518  
  

 

 

    

 

 

  

Total current assets

      34,356       44,113  

Fixed assets - net

      789       650  

Deferred income taxes (includes tax credit carryforwards of $772 in 2024)

      43       959  

Other noncurrent assets

      1,602       1,355  

Right-of-use assets

      598       378  

Goodwill

      22,593       12,270  

Amortizable intangible assets - net

      10,684       4,530  
  

 

 

    

 

 

  

Total assets

    $ 70,665     $ 64,255  
  

 

 

    

 

 

  

Fiduciary liabilities

    $ 26,899     $ 24,712  

Accrued compensation and other current liabilities

      4,017       3,586  

Deferred revenue - current

      737       537  

Premium financing debt

      226       225  

Corporate related borrowings - current

      640       200  
  

 

 

    

 

 

  

Total current liabilities

      32,519       29,260  

Corporate related borrowings - noncurrent

      12,104       12,732  

Deferred revenue - noncurrent

      155       67  

Lease liabilities - noncurrent

      515       328  

Other noncurrent liabilities (includes tax credit carryforwards of $713 in 2025)

      2,025       1,688  
  

 

 

    

 

 

  

Total liabilities

      47,318       44,075  
  

 

 

    

 

 

  

Stockholders’ equity:

     

Common stock - issued and outstanding

      257       250  

Capital in excess of par value

      17,783       16,069  

Retained earnings

      5,806       4,986  

Accumulated other comprehensive loss

      (525 )      (1,151 ) 
  

 

 

    

 

 

  

Total controlling interests stockholders’ equity

      23,321       20,154  

Noncontrolling interests

      26       26  
  

 

 

    

 

 

  

Total stockholders’ equity

      23,347       20,180  
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 70,665     $ 64,255  
  

 

 

    

 

 

  

Arthur J. Gallagher & Co.

Other Information

(Unaudited - data is rounded where indicated)

 

          4th Q Ended
Dec 31, 2025		      4th Q Ended
Dec 31, 2024		           Year Ended
Dec 31,
2025		      Year Ended
Dec 31,
2024		  
OTHER INFORMATION

Basic weighted average shares outstanding (000s)

     *       256,901        226,425         256,150        220,502  

Diluted weighted average shares outstanding (000s)

     *       260,258        231,059         260,134        224,966  

Number of common shares outstanding at end of period (000s)

              256,976        249,999  

Workforce at end of period (includes acquisitions):

              

Brokerage

            * *      55,561        42,091  

Risk Management

              10,889        10,339  

Total Company

            * *      71,776        55,977  

 

*

Gallagher completed a follow on public offering of 30,357,143 shares of its common stock on December 11, 2024 and 4,553,571 shares of its common stock on January 7, 2025, to fund a portion of the acquisition of AssuredPartners.

**

The acquisition of AssuredPartners added approximately 10,900 employees in August 2025.

Reconciliation of Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per Share (Unaudited)

(Unaudited - in millions except share and per share data)

 

     Earnings
(Loss)
Before Income
Taxes		     Provision
(Benefit)
for Income
Taxes		     Net Earnings
(Loss)		     Net Earnings
(Loss)
Attributable to
Noncontrolling
Interests		      Net Earnings
(Loss)
Attributable to
Controlling
Interests		     Diluted
Net
Earnings
(Loss)
per Share		  

4th Q Ended December 31, 2025

              

Brokerage, as reported

    $ 424     $ 107     $ 317     $ 3      $ 314     $ 1.21  

Net (gains) on divestitures

      (20 )      (5 )      (15 )      —         (15 )      (0.06 ) 

Acquisition integration

      106       27       79       —         79       0.30  

Workforce and lease termination

      106       26       80       —         80       0.31  

Acquisition related adjustments

      43       13       30       —         30       0.12  

Amortization of intangible assets

      298       75       223       —         223       0.86  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Brokerage, as adjusted

    $ 957     $ 243     $ 714     $ 3      $ 711     $ 2.74  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Risk Management, as reported

    $ 67     $ 18     $ 49     $ —       $ 49     $ 0.19  

Net (gains) on divestitures

      (1 )      —        (1 )      —         (1 )      —   

Acquisition integration

      2       1       1       —         1       —   

Workforce and lease termination

      2       1       1       —         1       —   

Acquisition related adjustments

      3       —        3       —         3       0.01  

Amortization of intangible assets

      6       2       4       —         4       0.02  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Risk Management, as adjusted

    $ 79     $ 21     $ 58     $ —       $ 58     $ 0.22  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Corporate, as reported

    $ (311 )    $ (99 )    $ (212 )    $ —       $ (212 )    $ (0.82 ) 

Transaction-related costs

      36       9       27       —         27       0.10  

Legal, tax and benefit plan related

      54       20       34       —         34       0.14  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Corporate, as adjusted

    $ (221 )    $ (70 )    $ (151 )    $ —       $ (151 )    $ (0.58 ) 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

See “Information Regarding Non-GAAP Measures” beginning on page 9 of 15.

 

(14 of 15)

Reconciliation of Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per Share (Unaudited) - Continued

(Unaudited - in millions except share and per share data)

 

     Earnings
(Loss)
Before Income
Taxes		     Provision
(Benefit)
for Income
Taxes		     Net Earnings
(Loss)		     Net Earnings
(Loss)
Attributable to
Noncontrolling
Interests		      Net Earnings
(Loss)
Attributable to
Controlling
Interests		     Diluted Net
Earnings
(Loss) per
Share		  

4th Q Ended December 31, 2024

              

Brokerage, as reported

    $ 425     $ 108     $ 317     $ —       $ 317     $ 1.37  

Net losses on divestitures

      1       —        1       —         1       —   

Acquisition integration

      39       10       29       —         29       0.13  

Workforce and lease termination

      31       8       23       —         23       0.10  

Acquisition related adjustments

      53       13       40       —         40       0.17  

Amortization of intangible assets

      163       42       121       —         121       0.53  

Effective income tax rate impact

      —        (1 )      1       —         1       0.01  

Levelized foreign currency translation

      7       2       5       —         5       0.02  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Brokerage, as adjusted

    $ 719     $ 182     $ 537     $ —       $ 537     $ 2.33  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Risk Management, as reported

    $ 58     $ 15     $ 43     $ —       $ 43     $ 0.19  

Acquisition integration

      1       1       —       —         —       —   

Workforce and lease termination

      4       1       3       —         3       0.01  

Acquisition related adjustments

      —       —        —       —         —       —   

Amortization of intangible assets

      4       1       3       —         3       0.01  

Levelized foreign currency translation

      1       —        1       —         1       —   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Risk Management, as adjusted

    $ 68     $ 18     $ 50     $ —       $ 50     $ 0.21  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Corporate, as reported

    $ (150 )    $ (48 )    $ (102 )    $ —       $ (102 )    $ (0.44 ) 

Transaction-related costs

      17       3       14       —         14       0.06  

Clean energy-related

      (2 )      (1 )      (1 )      —         (1 )      —   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Corporate, as adjusted

    $ (135 )    $ (46 )    $ (89 )    $ —       $ (89 )    $ (0.38 ) 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

     Earnings
(Loss)
Before Income
Taxes		     (Benefit)
for Income
Taxes		     Net Earnings
(Loss)		     Net Earnings
(Loss)
Attributable to
Noncontrolling
Interests		      Net Earnings
(Loss)
Attributable to
Controlling
Interests		     Diluted Net
Earnings
(Loss) per
Share		  

Year Ended December 31, 2025

              

Brokerage, as reported

    $ 2,759     $ 707     $ 2,052     $ 9      $ 2,043     $ 7.85  

Net (gains) on divestitures

      (24 )      (6 )      (18 )      —         (18 )      (0.07 ) 

Acquisition integration

      257       63       194       —         194       0.73  

Workforce and lease termination

      183       47       136       —         136       0.53  

Acquisition related adjustments

      172       45       127       —         127       0.49  

Amortization of intangible assets

      894       226       668       —         668       2.57  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Brokerage, as adjusted

    $ 4,241     $ 1,082     $ 3,159     $ 9      $ 3,150     $ 12.10  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Risk Management, as reported

    $ 249     $ 66     $ 183     $ —       $ 183     $ 0.70  

Net (gains) on divestitures

      (2 )      (1 )      (1 )      —         (1 )      —   

Acquisition integration

      9       2       7       —         7       0.03  

Workforce and lease termination

      12       3       9       —         9       0.03  

Acquisition related adjustments

      4       1       3       —         3       0.01  

Amortization of intangible assets

      22       6       16       —         16       0.06  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Risk Management, as adjusted

    $ 294     $ 77     $ 217     $ —       $ 217     $ 0.83  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Corporate, as reported

    $ (1,137 )    $ (405 )    $ (732 )    $ —       $ (732 )    $ (2.81 ) 

Transaction-related costs

      122       15       107       —         107       0.41  

Legal, tax and benefit plan related

      78       36       42       —         42       0.16  
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Corporate, as adjusted

    $ (937 )    $ (354 )    $ (583 )    $ —       $ (583 )    $ (2.24 ) 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

     Earnings
(Loss)
Before Income
Taxes		     Provision
(Benefit)
for Income
Taxes		     Net Earnings
(Loss)		     Net Earnings
(Loss)
Attributable to
Noncontrolling
Interests		     Net Earnings
(Loss)
Attributable to
Controlling
Interests		     Diluted Net
Earnings
(Loss) per
Share		  

Year Ended December 31, 2024

             

Brokerage, as reported

    $ 2,259     $ 573     $ 1,686     $ 8     $ 1,678     $ 7.46  

Net (gains) on divestitures

      (24 )      (6 )      (18 )      —        (18 )      (0.08 ) 

Acquisition integration

      191       48       143       —        143       0.63  

Workforce and lease termination

      118       30       88       —        88       0.39  

Acquisition related adjustments

      85       22       63       (3 )      66       0.28  

Amortization of intangible assets

      651       165       486       —        486       2.16  

Effective income tax rate impact

      —        7       (7 )      —        (7 )      (0.03 ) 

Levelized foreign currency translation

      13       5       8       —        8       0.04  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Brokerage, as adjusted

    $ 3,293     $ 844     $ 2,449     $ 5     $ 2,444     $ 10.85  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Risk Management, as reported

    $ 238     $ 63     $ 175     $ —      $ 175     $ 0.78  

Acquisition integration

      3       1       2       —        2       0.01  

Workforce and lease termination

      8       2       6       —        6       0.03  

Amortization of intangible assets

      14       4       10       —        10       0.04  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Risk Management, as adjusted

    $ 263     $ 70     $ 193     $ —      $ 193     $ 0.86  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Corporate, as reported

    $ (622 )    $ (232 )    $ (390 )    $ —      $ (390 )    $ (1.74 ) 

Transaction-related costs

      32       6       26       —        26       0.12  

Legal and tax related

      —        (3 )      3       —        3       0.02  

Clean energy-related

      (2 )      —        (2 )      —        (2 )      (0.01 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Corporate, as adjusted

    $ (592 )    $ (229 )    $ (363 )    $ —      $ (363 )    $ (1.61 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

See “Information Regarding Non-GAAP Measures” on page 9 of 15.

Contact:  

Ray Iardella 

Vice President - Investor Relations 

630-285-3661 or ray_iardella@ajg.com 

 

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