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Arthur J. Gallagher Q1 Earnings Beat, Commissions and Fees Rise Y/Y
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Key Takeaways
AJG Q1 adjusted EPS $4.47 beat the consensus mark by 1.6% as total revenues reached $4.7B.
AJG Brokerage revenues rose 29.5% to $4.3B on higher commissions, fees and contingent revenue.
AJG declared a $0.70 quarterly dividend, and closed eight acquisitions with ~$49M annualized revenues.
Arthur J. Gallagher & Co. (AJG - Free Report) reported first-quarter 2026 adjusted net earnings of $4.47 per share, which beat the Zacks Consensus Estimate by 1.6%. The bottom line increased 21.8% on a year-over-year basis.
Arthur J. Gallagher’s performance was driven by margin expansion in the Risk Management segment, higher commissions, fees, supplemental revenues, and improved EBITDAC.
Operational Update
Total revenues of $4.7 billion beat the Zacks Consensus Estimate by 1.4%. The top line also improved 28.1% year over year, driven by higher commissions, fees, supplemental revenues, and contingent revenues.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
While commissions rose 38.9% year over year to $3.1 billion, fees increased 27.7% year over year to $792 million.
Arthur J. Gallagher’s total expenses increased 30.2% year over year to $3.7 billion in the reported quarter due to higher compensation, operating, reimbursements, depreciation and amortization.
Earnings before interest, tax, depreciation, and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 19.7% from the prior-year quarter to $1.6 billion.
Segmental Results
Brokerage: Revenues of $4.3 billion increased 29.5% year over year on higher commissions, fees, supplemental revenues, and contingent revenues. Expenses increased 38.4% from the year-ago quarter to $3.1 billion due to higher compensation, operating, depreciation and amortization. Adjusted EBITDAC climbed 15.6% from the year-ago level to $1.6 billion. EBITDAC margin contracted 320 basis points year over year to 40.1%.
Risk Management: Revenues were up 13.8% year over year to $470 million, owing to higher fees. Expenses rose 12.6% from the prior-year period to $402 million on higher compensation, operating, reimbursements, and amortization. Adjusted EBITDAC improved 19.4% year over year to $86 million. Margin expanded 30 bps to 21.7%.
Corporate: EBITDAC was a negative $91 million compared with a negative $122 million in the year-ago quarter.
Financial Update
As of March 31, 2026, total assets were $78.3 billion, up 10.3% from the 2025-end level. At the end of the quarter, cash and cash equivalents of $1.4 billion rose 1.2% from the 2025-end level. As of March 31, 2026, shareholders’ equity rose 1.9% to $23.3 billion from the level on Dec. 31, 2025.
Dividend Update
The board of directors declared a quarterly cash dividend of 70 cents per share. The dividend will be paid out on June 19, 2026, to shareholders of record as of June 5.
Acquisition Update
In the quarter, Arthur J. Gallagher closed eight acquisitions with estimated annualized revenues of about $49 million.
Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2026 adjusted earnings of $1.39 per share beat the Zacks Consensus Estimate by 2.2%. The bottom line increased 7.8% year over year. Total revenues of $1.9 billion beat the Zacks Consensus Estimate by 1.4%. The top line improved 35.4% year over year.
Adjusted EBITDAC was $731 million, up 36.6% year over year. The EBITDAC margin improved 40 basis points year over year to 38.5%.
Willis Towers Watson plc (WTW - Free Report) delivered first-quarter 2026 adjusted earnings of $3.72 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line grew 19% year over year. Willis Towers posted adjusted consolidated revenues of $2.4 billion, up 8% year over year on a reported basis. Revenues increased 3% on an organic basis and 4% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 1.1%.
Adjusted operating income was $537 million, up 12% year over year. Adjusted operating margin expanded 70 basis points (bps) to 22.3%. Adjusted EBITDA was $589 million, up 11% year over year. Adjusted EBITDA margin was 23.9%, which expanded 50 bps.
Marsh & McLennan Companies, Inc. (MRSH - Free Report) reported first-quarter 2026 adjusted earnings per share of $3.29, which surpassed the Zacks Consensus Estimate by 2.5%. The bottom line advanced 8% year over year. Consolidated revenues of $7.6 billion improved 8% year over year. The figure rose 4% on an underlying basis. The top line beat the consensus mark by 2.9%.
Marsh’s adjusted operating income improved 8% year over year to $2.4 billion. Adjusted operating margin of 31.8% remained stable year over year.
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Arthur J. Gallagher Q1 Earnings Beat, Commissions and Fees Rise Y/Y
Key Takeaways
Arthur J. Gallagher & Co. (AJG - Free Report) reported first-quarter 2026 adjusted net earnings of $4.47 per share, which beat the Zacks Consensus Estimate by 1.6%. The bottom line increased 21.8% on a year-over-year basis.
Arthur J. Gallagher’s performance was driven by margin expansion in the Risk Management segment, higher commissions, fees, supplemental revenues, and improved EBITDAC.
Operational Update
Total revenues of $4.7 billion beat the Zacks Consensus Estimate by 1.4%. The top line also improved 28.1% year over year, driven by higher commissions, fees, supplemental revenues, and contingent revenues.
Arthur J. Gallagher & Co. Price, Consensus and EPS Surprise
Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. Quote
While commissions rose 38.9% year over year to $3.1 billion, fees increased 27.7% year over year to $792 million.
Arthur J. Gallagher’s total expenses increased 30.2% year over year to $3.7 billion in the reported quarter due to higher compensation, operating, reimbursements, depreciation and amortization.
Earnings before interest, tax, depreciation, and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 19.7% from the prior-year quarter to $1.6 billion.
Segmental Results
Brokerage: Revenues of $4.3 billion increased 29.5% year over year on higher commissions, fees, supplemental revenues, and contingent revenues. Expenses increased 38.4% from the year-ago quarter to $3.1 billion due to higher compensation, operating, depreciation and amortization. Adjusted EBITDAC climbed 15.6% from the year-ago level to $1.6 billion. EBITDAC margin contracted 320 basis points year over year to 40.1%.
Risk Management: Revenues were up 13.8% year over year to $470 million, owing to higher fees. Expenses rose 12.6% from the prior-year period to $402 million on higher compensation, operating, reimbursements, and amortization. Adjusted EBITDAC improved 19.4% year over year to $86 million. Margin expanded 30 bps to 21.7%.
Corporate: EBITDAC was a negative $91 million compared with a negative $122 million in the year-ago quarter.
Financial Update
As of March 31, 2026, total assets were $78.3 billion, up 10.3% from the 2025-end level. At the end of the quarter, cash and cash equivalents of $1.4 billion rose 1.2% from the 2025-end level. As of March 31, 2026, shareholders’ equity rose 1.9% to $23.3 billion from the level on Dec. 31, 2025.
Dividend Update
The board of directors declared a quarterly cash dividend of 70 cents per share. The dividend will be paid out on June 19, 2026, to shareholders of record as of June 5.
Acquisition Update
In the quarter, Arthur J. Gallagher closed eight acquisitions with estimated annualized revenues of about $49 million.
Zacks Rank
AJG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Brown & Brown, Inc.’s (BRO - Free Report) first-quarter 2026 adjusted earnings of $1.39 per share beat the Zacks Consensus Estimate by 2.2%. The bottom line increased 7.8% year over year. Total revenues of $1.9 billion beat the Zacks Consensus Estimate by 1.4%. The top line improved 35.4% year over year.
Adjusted EBITDAC was $731 million, up 36.6% year over year. The EBITDAC margin improved 40 basis points year over year to 38.5%.
Willis Towers Watson plc (WTW - Free Report) delivered first-quarter 2026 adjusted earnings of $3.72 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line grew 19% year over year. Willis Towers posted adjusted consolidated revenues of $2.4 billion, up 8% year over year on a reported basis. Revenues increased 3% on an organic basis and 4% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 1.1%.
Adjusted operating income was $537 million, up 12% year over year. Adjusted operating margin expanded 70 basis points (bps) to 22.3%. Adjusted EBITDA was $589 million, up 11% year over year. Adjusted EBITDA margin was 23.9%, which expanded 50 bps.
Marsh & McLennan Companies, Inc. (MRSH - Free Report) reported first-quarter 2026 adjusted earnings per share of $3.29, which surpassed the Zacks Consensus Estimate by 2.5%. The bottom line advanced 8% year over year. Consolidated revenues of $7.6 billion improved 8% year over year. The figure rose 4% on an underlying basis. The top line beat the consensus mark by 2.9%.
Marsh’s adjusted operating income improved 8% year over year to $2.4 billion. Adjusted operating margin of 31.8% remained stable year over year.