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Aon plc (AON)·Q3 2025 Earnings Summary

Executive Summary

  • Aon delivered 7% total and 7% organic revenue growth to $3.997B, with adjusted EPS of $3.05; both revenue and EPS beat S&P Global consensus (rev $3.96B*, EPS $2.91*) .
  • Adjusted operating margin expanded 170 bps to 26.3% on ABS scale benefits and $35M of restructuring savings; GAAP operating margin rose 370 bps to 20.4% .
  • Management reaffirmed FY25 guidance: mid‑single‑digit or greater organic growth, 80–90 bps margin expansion, ETR 19.5–20.5%, and double‑digit FCF; guided Q4 adjusted EPS growth of 7–9% .
  • Commercial Risk grew 7% organically (double‑digit U.S. core P&C; strong middle‑market) and Reinsurance +8% (treaty, facultative, STG), while Health +6% and Wealth +5%; fiduciary investment income declined to $75M (-12% YoY) .
  • Potential stock catalysts: beat/raise dynamics (EPS and revenue beat; guidance reaffirmed), accelerating ABS-driven margins, and a new “data center lifecycle” insurance facility amid expected >$10B industry premiums by 2026 and a recent ~$30B coverage placement for a hyperscaler .

What Went Well and What Went Wrong

What Went Well

  • Margin expansion and operating leverage: Adjusted margin +170 bps to 26.3% on organic growth, ABS scale, and $35M restructuring savings; GAAP margin +370 bps to 20.4% .
  • Broad-based growth: Organic +7% with Commercial Risk +7%, Reinsurance +8%, Health +6%, Wealth +5%, driven by new business (11 pts contribution) and strong retention; U.S. core P&C grew double digits .
  • Strategic wins in data centers: Launched multi‑line “data center lifecycle” facility; placed nearly $30B of coverage for a top hyperscaler; management sees >$10B industry premium opportunity in 2026. “This is just the beginning” — Greg Case .

What Went Wrong

  • Fiduciary investment income headwind: $75M in Q3, down 12% YoY; management expects a ~20 bps margin headwind for FY from FII dynamics .
  • Other expense swung negative: Other expense was $(13)M vs +$35M in prior year, reflecting prior-year divestiture gains and higher non‑cash pension expense (partially offset by FX remeasurement) .
  • Wealth outlook softer near term: Q4 Wealth growth guided to 1–2% given U.S. advisory delays and the sale of the faster‑growing NFP Wealth business (closed at quarter end) .

Financial Results

Consolidated results (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$4.729 $4.155 $3.997
Organic Revenue Growth (%)5% 6% 7%
Operating Margin (%)30.9% 20.7% 20.4%
Adjusted Operating Margin (%)38.4% 28.2% 26.3%
Diluted EPS ($)$4.43 $2.66 $2.11
Adjusted EPS ($)$5.67 $3.49 $3.05
Free Cash Flow ($USD Billions)$0.084 $0.732 $1.079

Results vs S&P Global consensus (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue – Actual ($B)$4.729$4.155$3.997
Revenue – Consensus ($B)*$4.860$4.163$3.957
Revenue SurpriseMiss (−$0.13B)*Miss (−$0.01B)*Beat (+$0.04B) *
Adjusted EPS – Actual ($)$5.67$3.49$3.05
EPS – Consensus ($)*$6.04$3.41$2.91
EPS SurpriseMiss (−$0.37)*Beat (+$0.08) *Beat (+$0.14) *

*Values retrieved from S&P Global.

Segment breakdown – Q3 2025

SegmentRevenue ($USD Billions)Organic Growth (%)
Commercial Risk Solutions$1.988 7%
Reinsurance Solutions$0.537 8%
Health Solutions$0.935 6%
Wealth Solutions$0.540 5%
Eliminations$(0.003) N/A

Segment margins – Q3 2025

SegmentOperating Income ($M)Operating MarginAdjusted Operating Margin
Risk Capital$585 23.2% 26.2%
Human Capital$332 22.5% 30.5%

Select KPIs – Q3 2025

KPIQ3 2025
New business contribution to organic growth11 points (company-wide)
Net market impact contributionJust over 1 point
Fiduciary investment income$75M
Restructuring savings (quarter)$35M
Interest expense$206M
Weighted avg diluted shares216.7M
Share repurchases0.7M shares for ~$250M; $1.6B authorization remaining

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Organic revenue growthFY 2025Reaffirmed mid‑single‑digit or greater (prior) Mid‑single‑digit or greater Maintained
Adjusted operating margin expansionFY 2025Reaffirmed (prior) 80–90 bps Maintained
Effective tax rateFY 2025Reaffirmed (prior) 19.5%–20.5% Maintained
Free cash flowFY 2025Reaffirmed (prior) Double‑digit growth Maintained
Adjusted EPS growthQ4 2025N/A (not previously specified in Q2 PR)7%–9% (modeling) New detail
DividendQuarterly$0.745 declared (Oct 10 PR) $0.745 payable Nov 14, 2025 Maintained

Note: Q2 2025 press release reaffirmed FY25 guidance without numerical changes; current quarter reiterates explicit targets .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Data center insuranceNot highlighted in Q1 PR; focus on ABS and NFP contributions . No mention in Q2 PR .Launched multi‑line lifecycle facility; placed ~$30B coverage; sees >$10B industry premium in 2026; engineering‑driven approach Strongly increasing focus
Reinsurance marketQ1: Treaty growth, ILS and facultative up; market impact flat . Q2: Treaty/facultative growth; softer July 1 property rates balanced by limits .Net market impact flat; property rate pressure; demand for sideways cover; STG strong Stable growth; pricing pressure noted
Revenue‑generating talentInvestments emphasized; mid‑single‑digit organic growth . Q2: execution on hiring .Net revenue‑generating talent +6%; contributes 30–35 bps to FY organic growth Positive, compounding impact
NFP integration/portfolioQ1/Q2: NFP drove contributions; ongoing integration and costs On track for $30M OpEx synergies; net 20 bps margin headwind in FY; divested NFP Wealth Synergies progressing; portfolio optimized
Fiduciary investment incomeQ1: $67M ; Q2: $66M $75M (−12% YoY); FY margin headwind ~20 bps Slightly down; manageable headwind
Health/GLP‑1 analyticsReleased GLP‑1 workforce analysis (Apr 30) Health +6% organic; analytics driving sales; macro cost pressures support demand Sustained demand

Management Commentary

  • “We delivered another strong quarter… 7% organic revenue growth, a 26.3% adjusted operating margin, and 12% adjusted EPS growth… keeping us on track to achieve our full‑year objectives.” — Greg Case .
  • “New business contributed 11 points to organic revenue growth with balanced contributions… revenue‑generating hires are up 6% year to date… contributing 30–35 bps to full‑year organic revenue growth.” — Edmund Reese .
  • “Near term, we estimate data center demand could generate over $10 billion in new premium volume in 2026 alone… we placed nearly $30 billion in coverage for a top global hyperscaler.” — Greg Case .
  • “We remain confident in delivering full‑year margin expansion of 80 to 90 basis points… and double‑digit free cash flow growth in 2025.” — Edmund Reese .

Q&A Highlights

  • Talent ramp and growth contribution: Net revenue‑generating talent +6% YTD; expected 30–35 bps FY organic growth contribution; cumulative effect from 2024–2025 cohorts to be detailed with 2026 guidance .
  • Commercial Risk outperformance: 11 points of new business contribution within Commercial Risk; U.S. core P&C double‑digit growth; strength from middle market, construction, and energy specialties powered by ABS .
  • Reinsurance pricing: Property rate pressure noted; net market impact flat; demand strong for sideways cover; facultative and STG growing; 2026 specifics to come in Q4 .
  • Capital allocation: Focused on deleveraging (target 2.8x–3.0x by Q4), programmatic M&A (primarily U.S. P&C; $32M acquired EBITDA YTD), and $1B buybacks in 2025; proceeds from NFP Wealth boost flexibility .
  • Data center market: Early innings with engineering‑driven risk solutions; facility capacity and alternative capital engagement expected to expand opportunity set globally .

Estimates Context

  • Q3 2025 beat: Revenue $3.997B vs $3.957B* (beat ~$40M) and adjusted EPS $3.05 vs $2.91* (beat $0.14). Trajectory improved from Q1 misses to Q2 EPS beat and Q3 rev/EPS beat .
  • Prior quarters: Q1 2025 missed both revenue and EPS vs consensus; Q2 2025 slight revenue miss but EPS beat; Q3 2025 clean beat on both revenue and EPS (see table above).
  • Implications: Given reaffirmed FY25 targets and Q4 EPS growth guide (7–9%), sell‑side models may modestly lift 2H margin and FY EPS assumptions, while trimming Wealth Q4 top‑line for the NFP Wealth sale impact .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat with broad‑based growth: Organic +7% and adjusted EPS beat support confidence in FY25 targets despite FII and reinsurance pricing headwinds .
  • Margin story intact: ABS scale and restructuring savings are offsetting investments and lower FII; FY25 adjusted margin expansion of 80–90 bps remains on track .
  • Commercial Risk momentum: U.S. core P&C double‑digit and strong middle‑market via NFP underpin continued mid‑single‑digit or better organic growth narrative .
  • Reinsurance resilient: Pricing pressure in property balanced by higher limits and facultative/STG demand; net market impact flat with continued growth .
  • Emerging secular catalyst: Data center lifecycle program and early wins position Aon to capture outsized share as hyperscaler CapEx accelerates, adding a multi‑year growth vector .
  • Capital allocation discipline: Deleveraging toward 2.8x–3.0x by Q4, tuck‑in M&A pipeline (U.S. P&C), and $1B buyback for FY25 support TSR and flexibility post NFP Wealth sale .
  • Watch‑items: FII sensitivity (~20 bps margin headwind), Q4 Wealth growth trimmed to 1–2%, and Other expense variability from pension and FX remeasurement .

Appendix: Additional Data Points

  • Expense mix Q3: OpEx $3.181B (+3% YoY); Compensation/benefits $2.259B; Amortization/impairment $193M; Aon United program $32M (−54% YoY) .
  • Legal settlements: Net $23M expense reduction within Risk Capital in Q3 .
  • Cash flow: CFO $1.148B (+13% YoY) and FCF $1.079B (+13% YoY) in Q3; YTD FCF $1.895B (+13%) .
  • Dividend: $0.745 per share payable Nov 14, 2025; record date Nov 3, 2025 .