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MARSH & MCLENNAN COMPANIES, INC. (MMC)·Q3 2025 Earnings Summary

Executive Summary

  • MMC delivered solid Q3 2025 results: revenue $6.35B (+11% YoY, +4% underlying), adjusted operating income $1.44B (+13% YoY), and adjusted EPS $1.85 (+11% YoY), tracking with management’s expectations .
  • Versus S&P Global consensus, MMC posted a modest beat on both EPS ($1.85 vs $1.78*) and revenue ($6.35B vs $6.31B*); underlying growth was tempered by lower fiduciary interest income and softer P&C pricing, especially in property lines . Values retrieved from S&P Global.
  • Strategic catalysts: rebrand to “Marsh” and launch of Business & Client Services (BCS); Thrive program targets ~$400M savings over three years with ~$500M charges, supporting margin expansion and AI investments .
  • Outlook maintained: management still expects mid‑single‑digit underlying revenue growth, solid adjusted EPS growth, and an 18th consecutive year of margin expansion; Q4 fiduciary interest income guided to ~$85M and a ~$0.04 FX benefit to adjusted EPS .

What Went Well and What Went Wrong

  • What Went Well

    • Adjusted margin and earnings resilience: adjusted operating margin rose 30 bps to 22.7%; adjusted EPS grew 11% YoY to $1.85, reflecting execution despite market headwinds .
    • Marsh strength and McGriff contribution: Marsh revenue +16% GAAP (+4% underlying); U.S./Canada +3% underlying and International +5% underlying, with McGriff integration on plan .
    • Oliver Wyman outperformance: revenue +9% GAAP, +8% underlying, with broad‑based regional and practice growth, aided by favorable timing; pipeline remains constructive .
    • CEO tone: “Our third quarter results were solid and tracked with expectations…we will change our brand…creation of BCS to accelerate client impact and efficiency” .

  • What Went Wrong

    • Pricing and fiduciary income headwinds: global commercial insurance rates fell 4% YoY for a second straight quarter; fiduciary interest income declined $29M YoY to $109M, pressuring underlying growth .
    • Sequential normalization: revenue fell sequentially vs Q2 2025 ($6.35B vs $6.97B), with adjusted EPS down from $2.72 in Q2 as seasonality and timing benefits normalized .
    • U.S. large account softness: management noted hesitancy among larger U.S. clients and continued pressure from declining property rates; casualty loss‑cost inflation a persistent issue .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Billions)$5.70 $6.97 $6.35
GAAP Operating Income ($USD Billions)$1.11 $1.83 $1.17
Adjusted Operating Income ($USD Billions)$1.28 $2.06 $1.44
GAAP Diluted EPS ($USD)$1.51 $2.45 $1.51
Adjusted EPS ($USD)$1.66 $2.72 $1.85
Adjusted Operating Margin (%)22.4% 29.5% 22.7%
Segment Revenue ($USD Millions)Q3 2024Q3 2025YoY % GAAPUnderlying %
Risk & Insurance Services (RIS)$3,453 $3,907 +13%+3%
- Marsh$2,934 $3,400 +16%+4%
- U.S./Canada$1,711 $2,089 +22%+3%
- International$1,223 $1,311 +7%+5%
- Guy Carpenter$381 $398 +5%+5%
Consulting$2,262 $2,465 +9%+5%
- Mercer$1,452 $1,579 +9%+3%
- Oliver Wyman$810 $886 +9%+8%
KPIs and Selected ItemsQ3 2024Q3 2025
Fiduciary Interest Income ($USD Millions)$138 $109
Share Repurchases ($USD Millions)N/A$400 (1.9M shares)
Mercer AUM ($USD Billions)N/A$683 (end of Q3)
Interest Expense ($USD Millions)$154 $237
Adjusted Tax Rate (%)26.8% (Q3’24) 24.8% (Q3’25)
Estimates vs Actuals (S&P Global)Consensus*Actual
Primary EPS (Q3 2025)$1.78*$1.85
Revenue (Q3 2025)$6.31B*$6.35B
Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Underlying Revenue GrowthFY 2025Mid-single digit Mid-single digit Maintained
Adjusted EPSFY 2025Solid growth Solid growth Maintained
Reported Margin ExpansionFY 202518th consecutive year 18th consecutive year Maintained
Fiduciary Interest IncomeQ4 2025N/A~$85M New/Updated
FX impact on Adjusted EPSQ4 2025N/A+$0.04 benefit New/Updated
Interest ExpenseQ4 2025N/A~$235M New/Updated
Adjusted Tax RateFY 202525–26% (ex‑discrete) 25–26% (ex‑discrete) Maintained
Capital DeploymentFY 2025~$4.5B across dividends/M&A/repurchases ~$4.5B Maintained
DividendCurrent$0.900/qtr (raised in July) $0.900/qtr Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025, Q1 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesLimited in releases; focus on execution and acquisitions Expanded: LEN AI for colleagues; ADA (Mercer’s AI assistant); Centrisc for supply chain risk; BCS centralizes ops/tech to scale AI Increasing strategic emphasis
Supply chain riskNot highlighted previously Centrisc rollout; advising on global trade and supply chain exposures New focus
Pricing/macroUnderlying growth amid acquisitions; macro acknowledged Continued rate declines in property; casualty loss inflation; global rates −4% YoY; U.S. −1% Ongoing headwind
Branding/BCS/ThriveN/A in Q1/Q2 releases Rebrand to Marsh (Jan 2026); BCS launch; Thrive targets ~$400M savings with ~$500M charges New strategic program
Regional trendsMarsh U.S./Canada +4% underlying; International EMEA/APAC/LatAm growth in Q2; Q1 similar Marsh U.S./Canada +3% underlying; International +5% underlying; EMEA +5%, APAC +6%, LatAm +3% Stable to modestly softer U.S.; solid international

Management Commentary

  • CEO (John Doyle): “Our third quarter results were solid and tracked with expectations…we will change our brand…creation of Business and Client Services (BCS) to accelerate client impact and efficiency” .
  • CEO on markets: “We continue to see…continued decreases in overall rates…commercial insurance rates decreased 4% in the third quarter…Global property rates decreased by 8%…Global casualty rates increased 3%” .
  • CFO (Mark McGivney): “Adjusted operating income was $1.4 billion, up 13%…adjusted operating margin increased 30 basis points to 22.7%…Fiduciary interest income was $109 million…we expect…approximately $85 million in Q4…FX will be a $0.04 benefit” .
  • Marsh (Martin South): International underlying growth +5% with strong performance in UAE, Saudi, India, France, Spain; Pacific rates down 11% second quarter in a row .
  • Oliver Wyman (Nick Studer): “Best quarterly growth in six quarters…favorable timing…expect moderating growth in Q4…strong growth in consumer/telecom/tech, insurance/asset management, transportation/industrials; AI work ramping via ‘quotient’ platform” .

Q&A Highlights

  • Thrive savings and reinvestment: $500M charges for $400M savings with majority to earnings; reinvestment focused on talent and AI; payback confidence emphasized .
  • U.S. organic and pricing: Large account hesitancy and price declines, but Marsh underlying +4% with MMA performing better; cost of risk rising supports advisory demand .
  • MMA wholesale capability: Building targeted wholesale access (e.g., London desk) to reduce third‑party reliance, revenue synergies with McGriff in 2026 .
  • M&A appetite: McGriff integration on plan; continued “string of pearls” approach; bid‑ask may be widening in brokerage/MGA; PE willing to pay higher multiples .
  • Branding and cross‑sell: Rebrand simplifies market story and elevates firmwide capabilities; not a formal cross‑sell program, but connected go‑to‑market .

Estimates Context

  • MMC modestly beat S&P Global consensus on both EPS and revenue: $1.85 vs $1.78* EPS and $6.35B vs $6.31B* revenue. Continued mid‑single‑digit underlying growth target suggests estimates may be stable, with model tweaks for: lower fiduciary interest income trajectory, ~$0.04 Q4 FX benefit, and ~$235M Q4 interest expense . Values retrieved from S&P Global.

Key Takeaways for Investors

  • Resilient earnings and margins amid pricing headwinds; modest beat vs S&P consensus supports near‑term sentiment . Values retrieved from S&P Global.
  • Strategic repositioning (Marsh brand, BCS) and Thrive program should structurally enhance efficiency and support continued margin expansion over multi‑year horizon .
  • International remains a relative bright spot; U.S. large account demand cautious, but MMA and specialty capabilities provide offsets .
  • Watch Q4 drivers: fiduciary interest income ($85M), FX (+$0.04), interest expense ($235M), and Oliver Wyman growth moderation as timing normalizes .
  • Medium‑term thesis: AI/data assets and integrated platform (risk, strategy, people) deepen client value, with cost saves funding reinvestment—supporting durable EPS/margin compounding .
  • Trading lens: Brand/Thrive updates are catalysts; estimate risk balanced by maintained outlook; sector pricing trough conditions and casualty inflation backdrop argue for advisory demand persistence .