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Aon plc (AON)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered 11% total revenue growth to $4.155B, 6% organic growth, and 19% adjusted EPS growth to $3.49; free cash flow rose 59% to $732M, underscoring strong earnings conversion .
  • Results were broad-based across solution lines; adjusted operating margin expanded 80 bps to 28.2% on ABS-driven operating leverage and $35M restructuring savings; management reaffirmed full-year 2025 guidance .
  • Versus consensus, Aon posted an EPS beat ($3.49 vs $3.41*) and a slight revenue miss ($4.155B vs $4.163B*); EBITDA was essentially in line ($1.207B vs $1.212B*) .
  • Catalysts: reaffirmed margin expansion (80–90 bps) and double-digit FCF growth, NFP integration synergies tracking ($80M 2025 revenue synergies; $350M run-rate restructuring by 2026), and AI-enabled analytics (Broker Copilot) supporting sustained organic growth .

What Went Well and What Went Wrong

What Went Well

  • Broad-based organic growth: Commercial Risk, Reinsurance, and Health each delivered 6% organic growth; Wealth grew 3%, with strong international health and NFP contributions .
  • Margin expansion and cost actions: Adjusted operating margin up 80 bps to 28.2%; $35M restructuring savings in Q2; lower interest expense YoY; deleveraging to 3.4x leverage ratio .
  • Strategic innovation and AI: Launch of Broker Copilot and first-of-its-kind Aon Surge Stop Loss in cyber reinsurance; “Broker Copilot augments predictive broking, enabling Aon brokers to match capital to risk” (Greg Case) .

What Went Wrong

  • Other income normalization: Other income fell to $56M from $236M due to prior-year gains; adjusted other expense increased to $32M .
  • Lower fiduciary investment income: $66M vs $75M in Q2 2024; lower rates offset higher balances .
  • Reinsurance market headwinds: April 1 property renewals saw rate declines of 5–20%; modest unfavorable market impact partly offset by ILS/facultative growth .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total revenue ($USD Billions)$3.760 $4.147 $4.729 $4.155
Operating income ($USD Billions)$0.656 $1.091 $1.461 $0.859
Adjusted operating income ($USD Billions)$1.029 $1.380 $1.816 $1.171
Operating margin (%)17.4% 26.3% 30.9% 20.7%
Adjusted operating margin (%)27.4% 33.3% 38.4% 28.2%
Diluted EPS ($USD)$2.46 $3.28 $4.43 $2.66
Adjusted EPS ($USD)$2.93 $4.42 $5.67 $3.49
Segment revenue ($USD Billions)Q2 2024Q2 2025
Risk Capital$2.650 $2.866
Human Capital$1.125 $1.291
Eliminations-$0.015 -$0.002
Total Revenue$3.760 $4.155
Solution line detailQ2 2024 Revenue ($USD Billions)Q2 2025 Revenue ($USD Billions)Organic revenue growth (%)
Commercial Risk Solutions$2.015 $2.178 6%
Reinsurance Solutions$0.635 $0.688 6%
Health Solutions$0.662 $0.772 6%
Wealth Solutions$0.463 $0.519 3%
KPIsQ2 2025
Cash provided by operations ($USD Millions)$796
Free cash flow ($USD Millions)$732
Weighted avg diluted shares (Millions)217.3
Share repurchases (Shares, $USD Millions)0.7M shares; ~$250M
Adjusted effective tax rate (%)16.5%
Fiduciary investment income ($USD Millions)$66
Leverage ratio (x)3.4x
FX expected impact on FY25 adjusted EPS~$0.05 unfavorable

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic revenue growthFY 2025Mid-single-digit or greater Mid-single-digit or greater (reaffirmed) Maintained
Adjusted operating margin expansionFY 2025Expansion (unspecified) 80–90 bps expansion Specified and reaffirmed
Free cash flow growthFY 2025Double-digit Double-digit (reaffirmed) Maintained
Tax rate (adjusted)FY 2025N/A19.5%–20.5% Provided
Interest expenseQ3 2025N/A~$210M Provided
Other expenseQ3 2025N/A$25–$32M Provided
Share repurchasesFY 2025~$1B planned On track for ~$1B Maintained
Restructuring savingsFY 2025 / Run-rateN/A~$150M FY25; progressing toward ~$350M run-rate by 2026 Provided
Leverage targetQ4 20252.8–3.0x by Q4’25 On track for 2.8–3.0x by Q4’25 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiativesABS differentiation; segmentation to Risk/Human Capital; strong organic growth across solution lines Launch of Broker Copilot (embedded AI) to augment predictive broking; continued build-out of analyzers Increasing AI deployment and analytics leverage
Macro/tariffs/weather/workforceComplexity highlighted; reaffirmed guidance despite macro uncertainty CEO frames interconnected megatrends (trade, technology, weather, workforce) and client need for actionable analytics Persistent complexity; Aon positioning as mission-critical advisor
Reinsurance performanceSTG and ILS strength; treaty retention; modest unfavorable market impact Double-digit ILS and facultative growth; April property rates down 5–20%; expecting support from July renewals and analytics demand Strengthening in ILS/fac; mixed property pricing
Regional/commercial trendsNorth America core P&C strength; construction growth; international strength Broad-based commercial risk growth with double-digit construction; new business and retention driving gains across NA, EMEA, LATAM Sustained broad-based growth
NFP integration and synergiesNFP performing inline/better than business case; capital return plan On track for $80M 2025 revenue synergies; $175M by 2026; producer retention strong; tuck-ins via NFP Executing to plan; synergy ramp
Talent investmentContinued hiring and retention focus Revenue-generating hires up 6% YTD; expected 30–35 bps organic growth contribution from 2024 cohort Continued prioritized hiring

Management Commentary

  • “We delivered strong second quarter results, including 6% organic revenue growth, 19% growth in adjusted EPS, and 59% free cash flow growth… powered by Aon Business Services… we remain confident in our outlook and are reaffirming our full-year 2025 guidance.” — Greg Case, CEO .
  • “Adjusted operating margin was up 80 bps to 28.2%... restructuring savings totaled $35 million in the quarter… we remain on track to deliver $150 million in restructuring savings for the full year and… $350 million in run rate savings by 2026.” — Edmund Reese, CFO .
  • “Broker Copilot augments predictive broking, enabling Aon brokers to match capital to risk in an unparalleled manner… Aon Surge Stop Loss enables enhanced protection against cumulative cyber losses.” — Greg Case, CEO .

Q&A Highlights

  • M&A services: Tailwind modest off a low base; Q2 pipelines “better, but not back”; company not dependent on M&A for mid-single-digit growth trajectory .
  • Talent and new hires: Revenue-generating headcount up 6%; expected 30–35 bps contribution to 2025 organic growth from 2024 hiring cohort; ongoing investment in priority areas (construction, energy, health) .
  • Capital allocation: Strong FCF (59% in Q2) supports deleveraging (on track to 2.8–3.0x by Q4’25), disciplined tuck-ins (NFP closed 8 deals, $20M EBITDA through June), and $1B share buybacks for FY25 .
  • Reinsurance mix: Double-digit growth in ILS and facultative; treaty growth with strong retention; offerings are complementary; rapid expansion of ILS solutions for corporates (109 deals in 2024; ~100 YTD 2025) .
  • Legal environment: Management reiterated stance against supporting practices that exacerbate social inflation in the U.S.; noted broader industry recognition of the issue .

Estimates Context

MetricQ2 2024Q2 2025 ActualQ2 2025 ConsensusSurprise
Revenue ($USD Billions)$3.760 $4.155 $4.163*Slight miss
Primary EPS ($USD)$2.46 $3.49 $3.41*Beat
EBITDA ($USD Billions)N/A$1.207*$1.212*In line
CoverageQ2 2025
Revenue — # of Estimates10*
Primary EPS — # of Estimates16*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS beat on broad-based organic growth and ABS-driven margin expansion; adjusted EPS $3.49 vs $3.41* consensus; revenue essentially in line/slightly below .
  • Execution under 3x3 Plan remains intact: reaffirmed mid-single-digit+ organic growth, 80–90 bps adjusted margin expansion, and double-digit FCF growth for FY25 .
  • NFP integration is a tangible growth lever: $80M FY25 revenue synergies on track, strong producer retention, and tuck-in M&A pipeline supporting middle-market expansion .
  • Operating leverage and cost actions: $35M Q2 restructuring savings; on track for $150M FY25 and $350M run-rate by 2026, enhancing multi-year earnings power .
  • Near-term modeling items: Q3 interest expense ($210M) and other expense ($25–$32M) guidance, adjusted tax rate (FY25 19.5%–20.5%) and modest FX headwind ($0.05 on FY25 adjusted EPS) .
  • Reinsurance mix dynamics: property pricing softness balanced by double-digit ILS/fac growth and analytics demand; expect continued support at July renewals .
  • Strategic moat expanding via AI and analytics: Broker Copilot and analyzers increase win rates and pricing insight—supporting sustained mid-single-digit+ organic growth .