AJG

Arthur J. Gallagher recently reported that its revenue has grown about 20% annually over the past two years and earnings per share have increased about 18.5% annually over the past five years, alongside a free cash flow margin of roughly 17.3%. This combination of faster-than-peer revenue and earnings growth, supported by strong free cash generation, points to effective market share gains and solid operational execution. We’ll now examine how this recent acceleration in revenue and earnings growth could influence Arthur J. Gallagher’s broader investment narrative. Find 49 companies with promising cash flow potential yet trading below their fair value. To own Arthur J. Gallagher, you need to believe it can keep translating rising risk complexity and ongoing M&A into steady revenue, earnings and cash flow, even as insurance pricing cycles shift. The recent update of roughly 20% annual revenue growth over two years and an 18.5% EPS CAGR over five years supports that view, but does not remove the near term risk that softer property pricing and commission pressure could slow organic growth. The most relevant recent announcement is management’s disclosure that AJG has about US$10,000,000,000 of capacity for acquisitions over the next two years, backed by solid free cash generation. For investors focused on catalysts, this reinforces the central role of deal making in AJG’s story, while also heightening the existing concern that heavier reliance on M&A could bring greater integration, execution and regulatory risks if large transactions do not perform as expected. Yet investors should still keep a close eye on how persistent property pricing pressure could affect commission income and earnings resilience... Read the full narrative on Arthur J. Gallagher (it's free!) Arthur J. Gallagher's narrative projects $20.5 billion revenue and $3.0 billion earnings by 2029. This requires 10.6% yearly revenue growth and about a $1.4 billion earnings increase from $1.6 billion today. Uncover how Arthur J. Gallagher's forecasts yield a $290.44 fair value, a 7% upside to its current price. Some of the most cautious analysts were assuming revenue of about US$20,400,000,000 and earnings of roughly US$2,700,000,000 by 2029, which is far less enthusiastic than the consensus view. In light of AJG’s recent acceleration in revenue and EPS growth, this more pessimistic stance on how pricing, margins and acquisitions like AssuredPartners might play out could look too harsh or, alternatively, prove prescient. As a shareholder, you should weigh these differing expectations carefully and consider how fresh results might reshape both the upbeat and more conservative narratives. Explore 3 other fair value estimates on Arthur J. Gallagher - why the stock might be worth just $290.44! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Arthur J. Gallagher research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision. Our free Arthur J. Gallagher research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Arthur J. Gallagher's overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: The future of work is here. Discover the 37 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Invest in the nuclear renaissance through our list of 92 elite nuclear energy infrastructure plays powering the global AI revolution. Explore 24 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AJG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Arthur J. Gallagher stock has delivered a strong 93.8% total return over the past 5 years, yet the valuation signals are split, with the intrinsic value estimate based on the Excess Returns model pointing to upside while traditional market multiples lean expensive. At the last close of US$263.81, the broader value checks are cautious even as the model driven intrinsic value suggests the shares may trade at about a 20.2% discount to that estimate. A 93.8% gain over 5 years highlights that long term holders of Arthur J. Gallagher have already seen substantial value created, which raises the bar for any new upside case. For a specialist insurance broker and risk management business, expectations for steady fee based cash flows can support a richer valuation. However, any pressure on margins or capital requirements may limit how much investors are willing to pay for that stability. The stock only passes 2 of 6 valuation checks, which points to a share price that leans expensive on broad measures rather than screening as a clear bargain. The issue now is whether Arthur J. Gallagher's current price leaves enough upside relative to its intrinsic value estimate to justify the premium signals from the wider valuation checks. Find out why Arthur J. Gallagher's -10.7% return over the last year is lagging behind its peers. The Excess Returns model compares what Arthur J. Gallagher earns on its equity with the return investors require. For Arthur J. Gallagher, the inputs suggest a business generating returns above its estimated cost of equity, which supports a higher intrinsic value than the current share price implies. The model uses a Book Value of $92.54 per share and a Stable EPS of $15.64 per share, based on weighted future return on equity estimates from 4 analysts. With an Average Return on Equity of 14.63% and a Cost of Equity of $7.74 per share, the implied Excess Return of $7.91 per share is capitalised over time on a Stable Book Value of $106.95 per share. This process results in an estimated intrinsic value of about $330.53 per share compared with the recent price of $263.81. On this basis, the stock appears to be trading at roughly a 20.2% discount to the value implied by this model. On these Excess Returns assumptions, Arthur J. Gallagher stock appears undervalued relative to its estimated intrinsic value. Our Excess Returns analysis suggests Arthur J. Gallagher is undervalued by 20.2%. Track this in your watchlist or portfolio, or discover 48 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Arthur J. Gallagher. The P/E ratio is a useful way to check what you are paying for each dollar of Arthur J. Gallagher earnings. On this measure, the stock trades on about 43.1x earnings, which is roughly double the peer group average of 20.8x and well above the broader Insurance industry average of 11.0x. That alone suggests investors are already paying a high price for the company’s current earnings power. A fair P/E ratio for Arthur J. Gallagher, based on a model that weighs its size, margins, industry and risk profile, is estimated at about 17.4x. The current 43.1x level is therefore materially higher than this tailored benchmark. This points to a valuation where the market is assigning a sizeable premium relative to both peers and what the fair ratio implies. On the P/E multiple, Arthur J. Gallagher stock appears expensive compared with both its industry and the modelled fair ratio. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives take the valuation puzzle around Arthur J. Gallagher and turn it into clear, testable stories about what would need to happen to growth, margins and earnings for the stock to be worth materially more or less than today’s price. Each one links its number to a specific view on how Arthur J. Gallagher's growth, profitability and risk profile might evolve. You can revisit these views on the Community page as new information comes through. Arthur J. Gallagher inspires sharply different views, with one community narrative focused on efficiency gains and synergies and the other zeroed in on pricing and integration risks. Bull case: 9% undervalued Read the full Bull Case to see why Arthur J. Gallagher could be undervalued Bear case: 17% overvalued Read the full Bear Case to see why Arthur J. Gallagher could be overvalued Do you think there's more to the story for Arthur J. Gallagher? Head over to our Community to see what others are saying! For Arthur J. Gallagher, the Excess Returns intrinsic value estimate points to meaningful upside, while the P/E based view flags the stock as overvalued relative to peers and its own modelled fair ratio. The broader valuation checks are weak, so that intrinsic value signal sits against a cautious backdrop rather than a clear value case. The gap between the two views comes down to how much weight you place on long term cash flow resilience versus a rich multiple that already prices in strong expectations. The key question from here is whether Arthur J. Gallagher can sustain margins and earnings quality that justify that premium. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AJG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Arthur J. Gallagher & Co.? Here are five stocks we like better. Strong Q2 performance: Combined Brokerage and Risk Management revenue grew 24%, including 6% organic growth, while the company delivered its 25th consecutive quarter of double-digit adjusted EBITAC growth. Outlook and margins remain positive: Gallagher maintained its 2026 organic growth target of 6%, with Risk Management margins expected to exceed 22%. AssuredPartners is contributing to margin expansion, with synergies projected to reach $160 million by the end of 2026. Acquisitions remain a priority: The company completed seven tuck-in acquisitions during the quarter and has more than 30 additional signed or pending deals representing roughly $500 million in annualized revenue, while continuing opportunistic share repurchases. Arthur J. Gallagher & Co. (NYSE:AJG) reported second-quarter results marked by broad revenue growth, continued acquisition activity and margin expansion, while management maintained its full-year organic growth outlook despite moderating property insurance pricing. Chairman and CEO J. Patrick Gallagher, Jr. said combined revenue for the company’s Brokerage and Risk Management segments rose 24% in the second quarter, including 6% organic growth. Brokerage revenue increased 26%, with 5% organic growth, while Risk Management unit Gallagher Bassett posted 16% revenue growth and 12% organic growth. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now “Our team’s disciplined execution delivered another excellent quarter reflecting the continued momentum across our business,” Gallagher said. The company recorded its 25th consecutive quarter of double-digit adjusted EBITAC growth, he added. Management said insurance pricing continued to support growth, though substantially less than in recent years. Gallagher estimated that roughly one percentage point of organic growth was tied to pricing, with new business, client retention, exposure growth and the company’s diversified operations providing larger contributions. → Microsoft Just Flipped the AI Spending Narrative Overnight In global retail property and casualty operations, renewal premium changes for the quarter included a 10% decline in property, while casualty lines rose 3%, professional lines rose 1%, workers’ compensation increased 2%, personal lines increased 3%, and package business rose 2%. Excluding property, renewal premium changes rose 3%. Gallagher said property-market softness was more pronounced during the quarter because of its seasonally heavier property renewal mix. Still, the company said some clients are using lower property pricing to restore coverage, raise limits or improve program structures after prior years of higher premiums and reduced coverage. → Carrier Earnings Could Send the Stock to a New All-Time High In U.S. excess and surplus markets, management described property—particularly catastrophe-exposed property—as highly competitive, while casualty renewal premiums were up in the mid-single digits. The company said submissions and policy counts remained healthy, with complex risks such as data centers, difficult liability exposures and other specialty risks supporting demand for wholesale expertise. Gallagher Re also reported strong growth across lines and geographies, aided by new business. Management said the reinsurance market remained well-capitalized, creating pricing pressure in property catastrophe coverage, while casualty business remained more disciplined because of loss-cost trends and prior-year development. CFO Doug Howell said that, after adjusting prior-year comparisons for investment income earned on funds held for the AssuredPartners acquisition, adjusted revenue, adjusted EBITAC and adjusted earnings per share for the combined Brokerage and Risk Management segments each rose more than 30%. Howell said the prior-year figures included $144 million of investment income in the second quarter of 2025 related to funds held for the AssuredPartners transaction, creating comparability issues that will continue into the third quarter. Risk Management’s adjusted EBITAC margin rose 140 basis points to 22.3%, supported by operational efficiencies. Howell said the company expects third-quarter and full-year 2026 adjusted EBITAC margins for the segment to exceed 22%. For Brokerage, Howell said the company generated 50 basis points of underlying margin expansion during the quarter and continues to project full-year underlying margin expansion of 40 to 60 basis points. He said AssuredPartners is providing margin lift and that the acquired business generated $222 million of EBITA in the second quarter, in line with the company’s expectations. Management reiterated expected annualized run-rate synergies from AssuredPartners of $160 million by the end of 2026 and up to $325 million by early 2028. Howell said the company is seeing more revenue synergies than initially anticipated, alongside lower-than-expected incremental costs for technology, real estate and back-office operations as AssuredPartners moves onto Gallagher systems. Gallagher maintained its full-year 2026 organic growth outlook of 6%, consisting of 5.5% for Brokerage and 9% for Risk Management. The company said AssuredPartners was running at approximately 4% underlying growth, though its contribution is not included in the full-year organic growth outlook because of the timing of the acquisition. Management attributed Gallagher Bassett’s growth to new business and client retention, while citing investments in data, artificial intelligence and machine learning intended to improve claims outcomes and operating efficiency. Gallagher said the unit has a healthy pipeline and is positioned for another strong year. Howell said the company expects artificial intelligence to produce incremental savings beyond its normal margin expansion over a three-to-five-year period. He cited potential savings in production, support and back-office costs, while cautioning that some benefits could be offset by other investments. Management does not expect to announce a large standalone transformation program, instead describing AI deployment as part of its ongoing productivity efforts. During the quarter, Gallagher completed seven tuck-in acquisitions representing approximately $63 million in estimated annualized revenue. Its pipeline included more than 30 signed or pending term sheets representing roughly $500 million in annualized revenue. Since the prior April, the company has completed 38 acquisitions, including Woodruff Sawyer and AssuredPartners. Management said acquisition activity was running at about 80% of its historical average, as sellers adjust to lower valuation expectations. Howell said the company paid about 11.3 times EBITAC for second-quarter acquisitions, or below 10 times when considering identified synergies. Gallagher repurchased approximately 850,000 shares for about $170 million in the second quarter, bringing repurchases through June 30 to about $480 million. Howell said the company estimates it has nearly $10 billion of capacity to deploy over the next two years through available cash, expected free cash flow and future investment-grade borrowing capacity. While the company may repurchase shares opportunistically, Howell said management continues to prioritize mergers and acquisitions, citing a strong pipeline and what it views as attractive acquisition multiples. Arthur J. Gallagher & Co is a global insurance brokerage and risk management firm headquartered in Rolling Meadows, Illinois. Founded in 1927 by Arthur J. Gallagher, the company has grown from a regional broker into an international professional services organization that arranges insurance, provides consulting and designs risk-transfer solutions for commercial, industrial, public sector and individual clients. The company's core activities include property and casualty insurance brokerage, employee benefits consulting and administration, and a range of risk management services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Arthur J. Gallagher & Co. Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Arthur J. Gallagher & Co. AJG reported second-quarter 2026 adjusted earnings of $2.84 per share, in line with the Zacks Consensus Estimate. The bottom line increased 23.5% year over year.Revenues before reimbursements of $3.95 billion missed the consensus estimate by 2%. Still, the top line rose 24.4% year over year, supported by acquired revenues and solid organic growth. Combined Brokerage and Risk Management organic revenues increased 6%. Arthur J. Gallagher & Co. price-consensus-eps-surprise-chart | Arthur J. Gallagher & Co. Quote Commissions climbed 35.1% year over year to $2.44 billion, while fees advanced 23% to $1.18 billion. Supplemental revenues increased 36.9% to $141 million, and contingent revenues improved 24.7% to $91 million.These gains were partly offset by a 57.9% decline in interest income, premium finance revenues and other income to $98 million. The prior-year quarter benefited from interest earned on cash raised for the AssuredPartners acquisition. Brokerage revenues rose 25.7% year over year to $3.50 billion. Organic commissions, fees, supplemental revenues and contingent revenues increased 5%, reflecting 4% growth in organic base commissions and fees and a 20% increase in organic supplemental revenues.Organic contingent revenues declined 8%. During the quarter, the segment completed six acquisitions with estimated annualized revenues of $58 million compared with nine acquisitions and $291 million of annualized revenues acquired a year earlier. Adjusted Brokerage EBITDAC increased 15.7% to $1.16 billion. EBITDAC represents earnings before interest, taxes, depreciation, amortization and changes in estimated acquisition earnout payables.The adjusted EBITDAC margin contracted 280 basis points to 33.3%. The comparison was pressured by lower interest income, AssuredPartners seasonality and the inclusion of acquired businesses. Risk Management revenues before reimbursements increased 15.6% year over year to $453 million. Reported fees rose to $445 million from $383 million, while organic fees advanced 12%.The segment completed one acquisition with estimated annualized revenues of $5 million. In the year-ago period, Risk Management did not close an acquisition. Adjusted EBITDAC improved 21.7% to $101 million. The adjusted margin expanded 140 basis points to 22.3%, benefiting from stronger fee growth and lower compensation and operating expense ratios.The adjusted compensation expense ratio declined 160 basis points to 59.6%, helped by headcount controls. The adjusted operating expense ratio edged down 10 basis points to 18.1%, aided by savings in client-related expenses. Total expenses increased 30.6% year over year to $3.59 billion. Compensation expenses rose 29.2% to $2.33 billion, while operating expenses increased 30.8% to $679 million.Amortization surged 67.2% to $301 million, reflecting the impact of acquired intangible assets. Interest expense increased 6.3% to $168 million. Reported net earnings fell 12% to $324 million, while diluted GAAP earnings declined to $1.25 per share from $1.40. Total-company EBITDAC nevertheless increased 10.5% to $946 million.The effective tax rate declined to 21.7% from 22.3%. Corporate EBITDAC improved to a negative $98 million from a negative $111 million in the prior-year quarter. Arthur J. Gallagher ended the quarter with total assets of $81.81 billion, up 15.8% from year-end 2025. Cash and cash equivalents were $1.39 billion, while total stockholders’ equity increased 1.7% to $23.75 billion.Corporate-related borrowings totaled $13.48 billion, including $1.52 billion classified as current. Gallagher also had $134 million of premium financing debt. During the quarter, AJG repurchased shares for around $170 million. The company declared dividends of 70 cents per share, up from 65 cents in the year-ago quarter.Management highlighted strong client retention, new business generation and continued demand for advice, analytics, specialty expertise and claims advocacy amid a complex risk environment. Arthur J. Gallagher currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Brown & Brown, Inc.’s BRO second-quarter 2026 adjusted earnings of $1.07 per share missed the Zacks Consensus Estimate by 0.9%. The bottom line increased 3.9% year over year. Revenues of $1.67 billion missed the consensus mark by 2.9% but increased 30.4% year over year. Acquisition activity supported the top line, while organic revenues declined 0.7%. Commissions and fees rose 32.4% to $1.65 billion, while investment and other income declined to $22 million from $36 million. Adjusted EBITDAC margin contracted 100 basis points to 35.7%. Adjusted net income attributable to the company increased 18.4% to $361 million. Willis Towers Watson Public Limited Company WTW reported second-quarter 2026 adjusted earnings of $3.35 per share, beating the Zacks Consensus Estimate of $3.13 by 7%. Earnings increased 17% year over year. Revenues rose 9% to $2.46 billion and surpassed the consensus estimate of $2.42 billion by 1.7%. Organic revenues grew 5%. Reported revenues increased from $2.26 billion in the prior-year quarter. Excluding foreign-currency movements, revenues advanced 8%. Acquisitions and divestitures contributed 3 percentage points to the quarterly change. Adjusted EBITDA increased 13% year over year to $529 million. The related margin widened 70 basis points to 21.5%, reflecting improved operating leverage and stronger adjusted profitability.Aon plc AON reported second-quarter 2026 adjusted earnings of $3.81 per share, which surpassed the Zacks Consensus Estimate by 1.1%. The bottom line advanced 9% year over year.Total revenues of $4.2 billion grew 2% year over year.  The top line missed the consensus mark by 0.4%. Organic revenue growth was 5%. Total operating expenses inched up 1% year over year to $3.3 billion. Adjusted operating income amounted to $1.2 billion, up 5% year over year and in line with our estimate. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report Aon plc (AON) : Free Stock Analysis Report Brown & Brown, Inc. (BRO) : Free Stock Analysis Report Willis Towers Watson Public Limited Company (WTW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:15 p.m. ET Chairman and Chief Executive Officer - J. Patrick Gallagher, Jr. Chief Financial Officer - Doug Howell Operator: Good afternoon, and welcome to Arthur J. Gallagher & Co.'s second quarter 2026 earnings conference call. Participants have been placed on a listen-only mode. Your lines will be open for questions following the presentation. Today's call is being recorded. If you have any objections, you may disconnect at this time. Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meaning of the securities laws. The company does not assume any obligation to update information or forward-looking statements provided on this call. These forward-looking statements are subject to risks and uncertainties that can cause actual results to differ materially. Please refer to the Information Concerning Forward-looking Statements and Risk Factors sections contained in the company's most recent 10-K, 10-Q, and 8-K filings for more details on such risks and uncertainties. In addition, for reconciliations of the non-GAAP measures discussed on this call, as well as other information regarding these measures, please refer to the earnings release and other materials in the investor relations section of the company's website. It's now my pleasure to introduce J. Patrick Gallagher, Jr., Chairman and CEO of Arthur J. Gallagher & Co. Mr. Gallagher, you may begin. J. Patrick Gallagher, Jr.: Good afternoon, and thank you for joining us for our second quarter 2026 earnings call. On the call with me today is Doug Howell, our CFO, and other members of the management team. Before we get into the quarter, I want to take a moment to recognize the passing of Dave Johnson, a valued member of our board of directors. Dave helped guide Gallagher with wisdom, integrity, and sound judgment, and he cared deeply about our company, our values, and our people. On behalf of our board, our leadership team, and all of our colleagues, we extend our deepest condolences to Dave's family and loved ones. He will be greatly missed. Knowing Dave and the pride he took in this company, I believe he'd be very proud of what our team accomplished this quarter. Our team's disciplined execution delivered another excellent quarter reflecting the continued momentum across our business. For our combined brokerage and risk management segments, our two-pronged revenue growth strategy, growing both organically and through acquisitions, delivered total revenue growth of 24% in the second quarter. Organic growth was 6%, reflecting continued strength across each of our businesses. We continue to generate excellent profits. This quarter marks 25 consecutive quarters of double-digit adjusted EBITAC growth and another quarter of solid underlying margin expansion. Doug will break that down for you in a few minutes. On a segment basis, brokerage revenues were up 26%, of which organic was 5%. We saw strong results from AssuredPartners and growth across retail, PC, wholesale, reinsurance, and benefits. Nearly a year into the AssuredPartners combination, the business is performing well, retention remains strong, and the teams are working great together. Our risk management segment, Gallagher Bassett, posted revenue growth of 16%, which includes organic of 12%, driven by excellent new business and strong client retention. I'll again touch on the four strategic pillars that have guided Gallagher's long-term growth for decades, growing organically, growing through mergers and acquisitions, improving our productivity and quality, and maintaining our culture. First, organic growth. Our client retention remains strong. New business is excellent, and our clients' underlying business activity continues to be positive. Insurance rates continue to contribute to growth, but less than they have over the past several years. In this environment, only about 1 point of our organic growth is tied to rates. The bigger drivers continue to be new business, strong retention, exposure growth, and the diversity of our model across PC, benefits, reinsurance, and claims. We're also benefiting from activity across construction, infrastructure, energy, and data centers. These areas create new and more complex client needs, where clients require more advice, broader capabilities, and deeper expertise, that plays directly into Gallagher's advisory strength. Overall, we continue to view the global PC market as segmented. Carriers are looking to grow where they are earning acceptable returns and remain disciplined where underwriting margins require support. Property continues to ease, especially on larger and cat-exposed risks. Small and middle-market accounts remain more stable. Casualty remains firmer given loss cost trends and underwriting discipline. Good loss experience accounts can typically see some premium relief, while accounts with poor experience are seeing increases. Let me spend a few minutes breaking down this by business. Within our global retail PC business, broad market themes remain consistent with last quarter. As expected, the softness in property was more pronounced in the second quarter given the seasonally heavier renewal mix. In the second quarter, we saw the following and renewal premium changes by line of business. Property was down 10%. Casualty lines, which included general liability, commercial auto, and umbrella, were up 3% overall. Professional lines, including D&O and cyber, were up 1%. Workers' comp up 2%, personal lines up 3%, and package up 2%. Excluding property, renewal premium changes increased 3% in the quarter, with higher increases in the U.S. versus international markets. It's important to remember that premium changes in Gallagher's revenues do not move one for one. As property pricing eases, many clients are opting in and using the savings to buy back coverage, increase limits, or improve structure after several years of opting out and making difficult trade-offs. In this environment, the value of our advice, advocacy, and market access becomes even more important. Within U.S. excess and surplus, we continue to see a bifurcated market. Property, especially cat-exposed, is the most competitive area right now. That reflects a pricing reset after several years of a very strong hard market, not a reduction in demand. Submissions and policy counts remain healthy, and E&S continues to be an important solution for complex property risks. Casualty remains firmer. Renewal premiums are up mid-single digits, and demand remains steady across general liability, excess liability, and umbrella. At its core, the E&S market is driven by complexity. AI-related infrastructure, including data centers, difficult liability risks, and other emerging specialty exposures, often do not fit neatly in admitted markets. That creates a multi-year opportunity for our wholesale teams because clients and carriers need expertise, structure, and speed, as well as market access. Turning to London specialty, conditions are similar to what we are seeing in the U.S. E&S market. North American cat exposed property remains competitive, while D&O, professional lines, financial institutions, and cyber are more stable than they were earlier in the cycle. The clear exception is war-related risk. Marine, aviation, and political violence exposures tied to active conflict zones are seeing significant repricing and more selective deployment of capacity. Coverage remains available, but it requires careful structure and coordinated execution across markets. That is where our London, U.S., and international teams work especially well together. We are helping clients navigate increasingly dynamic markets. Moving to reinsurance. The market remains well-capitalized, and renewal activity continues to reflect ample capacity. In the second quarter, we saw strong growth across lines and across geographies, with excellent new business helping offset rate headwinds. That performance reflects broad-based contributions from areas including facultative, casualty, and capital advisory, demonstrating that Gallagher Re's growth is not solely dependent on the pricing cycle. Conditions at the 4-1 renewals were generally consistent with those we saw at 1-1, with somewhat greater downward pricing pressure on the Japan-specific contracts. At the mid-year renewals, including 6-1, property cat pricing moved lower again, reflecting abundant capacity, demand remained healthy, and many clients used the savings to improve structure by additional limits or better manage earnings volatility. Casualty remains more disciplined, particularly for U.S.-focused risks, given loss cost trends and prior year development. Even in a softer reinsurance markets, clients need more than price. They need advice, structure, analytics, and access to capital. That plays directly into Gallagher Re's strength. Moving to employee benefits. We're seeing steady demand from employers across health, retirement benefits, executive benefits, life, and HR solutions. Our clients remain focused on talent attraction and retention while managing pressure from increased medical utilization, advanced treatments, and escalating prescription drug costs. That is why they value our advice, advocacy, creative plan design, and cost management strategies, all of which continue to support demand and retention across our benefits business. Moving on to Gallagher Bassett. GB had another terrific quarter, driven by excellent new business and strong client retention. The team continues to broaden its capabilities and put data, AI, and machine learning to work in very practical ways to improve service, drive better claims outcomes, and create further operating efficiencies. These investments continue to strengthen GB's competitive position. With good momentum and a healthy pipeline of opportunities, GB is well-positioned for another strong year in 2026. Now let me provide some comments on our view of the economy. The U.S. labor market remains healthy, with the number of job openings still ahead of the number of people looking for work. Our daily revenue indications have historically been a terrific indicator of economic activity, and our proprietary data from audits, endorsements, and cancellations showed solid business activity throughout the second quarter and through yesterday. Our data continues to show that exposure units such as revenues, payroll, headcount, or trucks on the road, to name a few, are still in positive territory, and our clients' businesses are continuing to grow. To wrap up my thoughts on our organic growth prospects, property pricing is moderating, and that's well understood. Property is only one part of our very large and very diverse portfolio. Client retention remains strong. New business activity is excellent. Client exposure growth is positive. We are also seeing clients opt back into coverage as pricing moderates, our growth is broad-based across geographies, client sizes, and products. Most importantly, clients continue to need our advice, advocacy, analytics, and market access. As risk becomes more complex, the value of Gallagher's expertise becomes more important, not less. That is why we remain confident in the durability of our results and in our 2026 full-year organic growth outlook of 6%. Now shifting to our second strategic pillar, mergers and acquisitions. During the second quarter, we completed 7 new tuck-in acquisitions, representing around $63 million of estimated annualized revenue. Looking at our pipeline, we have over 30 term sheets signed or being prepared, representing around $500 million of annualized revenues. Our acquisition strategy continues to be a powerful driver of Gallagher's growth. Since last April, we've completed 38 acquisitions, including Woodruff Sawyer and AssuredPartners. Each one strengthens Gallagher in its own way, adding talent, capabilities, relationships, and new growth opportunities. AssuredPartners is 1 example of that strategy at work. The business is performing very well. Retention is strong, the teams are already better together. We're collaborating on opportunities, sharing capabilities, putting Gallagher's tools, data, analytics, and expertise to work across the entire combined team. That is good for clients, good for colleagues, and a strong message to other high-quality firms thinking about their future. For those new partners joining us, I'd like to extend a very warm welcome to the Gallagher family of professionals. Good firms always have a choice, and it'd be terrific if they chose to partner with Gallagher. Next, let me move to our third strategic pillar, continuously improving our productivity and quality. For more than 2 decades, we've been improving productivity and quality by standardizing workflows, building our centers of excellence, and bringing more of our data together around the world. AI, digitization, and automation are simply the next tools in that effort, and we are putting them to work across the broader Gallagher team. The point is simple. These tools make our professionals faster, better informed, and more productive, but they do not replace judgment, advocacy, relationships, or accountability to our clients. Over time, they should help us serve clients better, further improve our quality, help us win new business, and keep us growing the right way. Let me wrap up with our fourth strategic pillar, our culture. Gallagher is a growth culture company. Our culture helps us attract talent, welcome merger partners, and execute consistently across a large and diverse global company. Culture is what makes our investments in talent, technology, data, and AI work. Our people are willing to learn new tools and new ways of working when these tools help them serve clients better, improve quality, and move faster. That is what helps turn investment into execution. We have the scale. We have the data. We have the operating discipline. Because of our culture, our people put those capabilities to work every day. That drives productivity, improves quality, helps retention, helps new business, and over time, it shows up in our financial performance. When we talk about Gallagher's performance, our culture's not separate from the numbers, it's embedded in them. Okay, another excellent quarter behind us, a terrific future ahead of us. I'll stop now and turn it over to Doug to walk through the financial details. Doug? Doug Howell: All right. Thanks, Pat, and hello, everyone. Today, I'll spend about two minutes flipping through our earnings release and give some quick highlights. Then I'll spend about five minutes on the CFO Commentary document that we post on our website. Then I'll close with a minute on cash, M&A, and capital management. Overall punchline, which you probably already dug out, we had a great quarter, right in line, and in many cases, better than we'd forecasted in our June Investor Day. One housekeeping reminder before I jump in. In the first three quarters of 2025, our brokerage segment earned investment income on the funds we are holding to buy AssuredPartners. Second quarter 2025 revenues and EBITAC were benefited by investment income of $144 million. That's $0.42 per share. As a reminder, for the first quarter 2025, that was $143 million or $0.41, and third quarter 2025 results had $76 million or $0.22 of income. This has caused, and will again cause in the third quarter, a lot of comparability noise. Fortunately, this headline headache will be behind us by the fourth quarter. Let's go to the earnings release, page one. Removing from prior the impact of investment income on AP funds, as I just noted, you compute adjusted revenues, adjusted EBITAC, and adjusted EPS, each up over 30% for our combined brokerage and risk management segments. That's an incredible quarter and demonstrates our four strategic pillars are delivering terrific shareholder value. When you combine brokerage organic at 5% from page three and risk management organic at 12% from page five, you'll get to that 6% organic growth that Pat just cited. This is excellent execution right in line with our June Investor Day forecast. One other note, brokerage posted excellent combined supplemental and contingent growth, and risk management had strong performance bonus revenues. Both reflect the value we bring to our clients and capital providers. Moving to page four and top of page five. As we've been discussing for nearly a year, the current quarter percentages at the bottom of these tables are really not all that helpful when compared to the prior year because of the interest income we earned in 2025 on the AP funds. That really clouds comparability. It's better for me to defer comments on our brokerage EBITAC margin until I get to page seven of the CFO Commentary. That said, when I do, you'll quickly see that our productivity and quality strategic pillar delivered strong underlying margin expansion this quarter, right in line with our Investor Day forecast. Moving to page six. No impact on these numbers from interest from holding AP funds. Risk management showed continued operational efficiencies, leading to an adjusted EBITAC margin up 140 basis points to 22.3%. That, plus excellent revenue growth of 14%, led to 22% growth in our adjusted EBITAC. Looking forward, we see third quarter and full year 2026 adjusted EBITAC margins north of 22%. Flipping to page seven. Corporate segment adjusted results in total were a bit better than what we provided during our June Investor Day. That's mostly due to a small movement in unrealized FX. As I've said before, this is a non-cash item, but it does move our corporate results around a bit as the foreign exchange rates bounce around. Last on page eight, about halfway down, you will read we repurchased about 850,000 shares for approximately $170 million in the second quarter. That brings repurchases to about $480 million through June 30. Let's now go to the CFO Commentary document, starting on page three. Most items here are very close to what we provided in June. A couple call-outs. The FX impact has been updated to the latest exchange rates, and we have updated our non-cash earn-out expense estimate to reflect a couple of earn-out payments made in the quarter. Just double-check these items that these are considered in your models. Moving to page four, organic growth by business. Here are the punchlines. First, we saw another solid quarter of organic growth across each business and geography. APAC, Specialty, and Risk Management, that is Gallagher Bassett, each had a really strong finish, and all others were right in line with our forecast provided during our June Investor Day. Looking forward, we have added our third quarter organic growth outlook and updated our full year. Percentages reflect the midpoint of our estimates and reflect similar new business retention, client business activity, and economic conditions that Pat just provided, as well as our view of where rates might be. For full year, we brought up APAC and Gallagher Bassett a bit due to their strong second quarter, and reinsurance rounded down really less than one point. Not much new news from our June Investor Day outlook. We are still comfortable with our full year total company organic outlook of 6%, brokerage at 5.5% and risk management at 9%. We project that, and 2026 will be another year of excellent organic growth. Let's move to the top of page five, the investment income table. A couple of quick comments here. First, on the left side, this is where you see the interest earned in 2025 on the funds we were holding to buy AP that I mentioned earlier. Second, our 2026 forecasts reflect current FX rates, changes in fiduciary cash balances, and assumes no rate cuts this year. Staying on page five, shifting down to the rollover revenue table, which excludes AssuredPartners. Three comments here. First, the second quarter 2026 column subtotal of $66 million for brokerage came in pretty close to our estimates that we provided in June. Second, please make sure you adjust the prior year revenues for the amount noted in the divestiture and other line before you apply your organic growth assumptions. Third, the pinkish columns to the right reflect 2026 revenues for M&A closed through yesterday. Remember, you will also need to make a pick for future M&A. Moving to page six, this is information on AssuredPartners. Five comments here. First, AssuredPartners' second quarter EBITA of $222 million came in at our June Investor Day estimates, and we remain confident in our full year 2026 outlook. That is really great performance. Second, remember that forecasted numbers we provide in this table are at the midpoint of our estimates. As we convert locations onto our systems, there could be some small movements between quarters and some additional revenue netting like we have seen over the last couple quarters. Third, my standard reminder that for third and fourth quarters 2026, you should only model the delta between the future estimates in pink and the 2025 numbers in blue. Otherwise, for example, you'd be double counting about $500 million of revenue in the third quarter. Fourth, the footnote reminds you that the non-cash figures shown on this page, which reflect depreciation and earn-out payable, are included within our estimates on page three. Please don't double count these. Fifth, importantly, you'll read in the footnote, we still see annualized run rate synergies of $160 million by the end of 2026, and then up to $325 million by early 2028. One heads up here, this table does not include synergies. Those synergies are shown in the margin walk table on page seven for 2026. Don't double count. Moving on to page seven, the brokerage segment margin bridge. This table makes it very easy to see all the components that influence our margin change period over period. Here are some punchlines. AP is delivering margin lift. Our productivity and quality efforts again delivered another terrific quarter of underlying margin expansion of 50 basis points. Looking forward, you'll see to the far right, we're still forecasting full year 2026 underlying margin expansion of 40 to 60 basis points. All of this is right in line for what we provided our June Investor Day, and we deliver on that, and it would mean another outstanding year of margin expansion. Moving to page eight, our corporate segment. You'll see that our adjusted second quarter, as well as our outlook for the rest of the year, are very close to what we presented in June. There's really no new news here. A reminder, the upper right box is where you find the impact of FX that I mentioned earlier, and then the lower box shows you the $3.4 billion of future tax savings from tax credits and tax-deductible intangible amortization. That means your models should reflect cash taxes paid at about 10% of EBITA, and you'll get close. These credits and deductible amortization shields create a nice cash flow sweetener to fund future M&A. All right. Let me wrap up with a few comments on cash, capital management, and M&A funding. When I look forward, available cash on hand, expected free cash flows, and future investment-grade borrowings, we estimate close to $10 billion of capacity to deploy over the next two years. We still favor M&A, but might also do share repurchases opportunistically. Currently, our M&A pipeline remains strong and is full of targets at attractive multiples. Staying consistent in our approach and disciplined in our pricing creates immediate shareholder value through a nice arbitrage. It also builds a bigger team that brings value to our clients and makes our offerings compelling to our prospects, and that fuels our long-term growth. That creates long-term shareholder value. Okay, those are my comments. Another fantastic quarter and continued expectation for another terrific year. Back to you, Pat. J. Patrick Gallagher, Jr.: Thanks, Doug. Operator, I think we're ready for some questions. Operator: Thank you so much. The call is now open for questions. If you have a question, please pick up your handset and press *1 on your telephone keypad at this time. If you are on speakerphone, please disable that function prior to pressing *1 to ensure optimum sound quality. You may remove yourself from the queue at any point by pressing *2. Additionally, we ask that you limit yourself to one question and one follow-up question. Again, that's *1 for questions. Our first questions come from the line of Mike Zaremski with BMO Capital Markets. Please proceed with your questions. Mike Zaremski: Hey, good evening. Thanks. I guess my question's specifically regarding RPC and pricing. I believe reinsurance organic doesn't flow through RPC, so feel free to add it in your answer if you'd like. We get asked a lot, I'm sure you do too, about if quote-unquote, "If the overall pricing environment continues to moderate into 2027, can brokers such as AJG, will they continue to show a decel trend?" You all have shown more stability in the face of declining RPC. Maybe you can kind of help us understand, do you feel like the RPC we've kind of based here in terms of pricing, in terms of your expectations, thinking out next six, 12 months, or even if it does go down a little bit, can AJ continue to kind of decouple, and you feel like your organic has kind of based because you guys have done a much better job at selling and kind of just growing organically despite downwards RPC pressure? Any help there would be great. J. Patrick Gallagher, Jr.: No, this is Pat, Mike. Yeah, clearly. Look, the market's the market, but we hold ourselves accountable every day to sell a lot of insurance and to get new business on the books. We measure that very clearly. Our pipeline is strong as could be. We look at what we're writing on an annualized basis literally every week. We thermometer that. We look at it. We know whether we're strong everywhere. I will tell you, around the world, as we said in our prepared remarks, the differentiation that we're seeing with the tools that we've built, our capability at getting at data, showing that to clients, it's making a difference. I think our retention is solid. New business continues to be very strong. One metric we don't typically provide is velocity. What type of new business are we writing against trailing earnings? Those are very, very strong numbers in our company. I don't want to give them out because then you'll ask me for a comparator every quarter, and I'm not going to do that. The fact is, we measure that all the time, so we know, look, what's happening. I feel very good about being able to sell in this environment. I also feel good comparing this to past soft markets. Every other past soft market, the market has dropped like a brick across every line all at once. This is a property reset. That's what this really is. By the way, our clients deserve that. When we talk to our clients in 2017, 2018, 2020, 2021, we're trying to explain why prices have to triple, why at the same time, values have to triple or double, and why maybe we don't even have a full line of cover to offer them. Today, I think they're benefiting from that, and as we said, people are in fact buying more insurance. I look at this and I go, look, it's a different market. Gallagher thrives on change, the complexity of the world today, what's going on in data centers, the supply chains, and war risk. I think it tees us up very, very well for continued growth, sorry for the long-winded answer, but yes, I think we'll grow through it. Mike Zaremski: Okay. That's helpful. My follow-up, probably for Doug, regarding your longish term or maybe not so long-term kind of margin potential improvements due to technology such as AI, and kudos to you all for being the first out there with kind of a strong viewpoint. One of your peers came out with a strong viewpoint today as well, with a timeframe that's fairly quick in terms of implementation in its early days. I guess one of the pushbacks we get is that some of these AI solutions might not have kind of locked down long-term costs that are known and could maybe creep up over time. Just any thoughts on that latter statement? Doug Howell: I think the cost of AI will be de minimis for the savings that we will be able to realize because we have already put in the cost effort to centralize and standardize our data and our processes. I think a lot of that cost, it's not directly to the technology called AI, it's the cost of implementing it and then changing your environment. I believe we have already spent that money, so the cost for us to continue to implement AI is pretty small relative to, let's say, another company or any company that's just starting from ground zero. Mike Zaremski: Helpful. Thank you. Operator: Thank you. Our next questions come from the line of Elyse Greenspan with Wells Fargo. Please proceed with your questions. Elyse Greenspan: Hi. Thanks. Good evening. My first question is on the brokerage organic. I believe through the first half of the year, you guys, around 5%. If we calculate it's a 4.6%. You guided to a 5% in the Q3, and then the full year guide is a 5.5%. I'm trying to square, and I know that this is the first year you guys have given a precise full year number. Normally, it's a range. But if the guide for the full year is 5.5%, that implies something at least within range of a 7% for the fourth quarter. I'm just trying to understand if you're just waiting to update the full year guide after we get through the Q3, and you give us the fourth quarter, or are you assuming some kind of uplift in the fourth quarter, and what would that be driven by? Doug Howell: Right. Two answers. First, the numbers we do provide in the pink on page four, they are the midpoint of our estimates. As we get closer to the end of the year with more behind us than there is in front of us, obviously the ranges get smaller around those numbers. It is a midpoint of an estimate. Second of all, this is a ground-up analysis. We believe that when we work through our data and we understand what's going on in our business, this is ground up and we give it to you as we get it from the divisions and the units that have been pretty damn close in the past. There is some variability around it, but I think we're sitting here. We've got five months of the year left, this is an estimate. I think if we post these numbers anywhere near these numbers, it's going to be a fantastic year. Yes, it would say that we'd have a little bit of a step up in the fourth quarter relative to these numbers. Why is that? The second quarter is a little bit low because of the property renewals, that we are more impacted by property in the second quarter, that seasonality, and we won't see that as much in the fourth quarter. That's probably the primary driver in it. Elyse Greenspan: Thanks. My second question is on AssuredPartners. You guys will annualize the deal right in the third quarter. I know it's only going to be in organic for a small part of the year. If you could give us a sense of just the underlying growth AP has been seeing, and then within the CFO sheet, when you're thinking about part of the third quarter and the fourth quarter organic, what are you assuming for growth for AP? Doug Howell: All right. First, I think that we're clearly not going to have a stub period in the third quarter to report organic. We close it on August 18th. I think that we'll probably target to start showing organic for AssuredPartners beginning with the fourth quarter, but let's just see how well our conversions do, and I can give you at least anecdotally what we're seeing. We're running around 4% right now with AssuredPartners, and I think that pretty well stacks up with a lot of the like for like businesses here in the U.S. that may be a point lower. The numbers that you see on page four do, for the full year, do not include AssuredPartners. We think that we'll be a year into it. They have the sales tools on their desks, and we're getting a lot of success coming out of it. Right now, they're running around 4%. Elyse Greenspan: Thank you. Operator: Thank you. Our next questions come from the line of Greg Peters with Raymond James. Please proceed with your questions. Greg Peters: Well, hey, good afternoon. I guess I'll pivot. One of the important areas is M&A for you guys. Boy, the whole sector has experienced a massive step change lower in the valuations. Just curious if you've seen any flow-through in terms of expectations from sellers on exit pricing as a result of what's happened to the valuation, the strategics. Any commentary on, I know there's a backlog of PE-sponsored vehicles out there looking for some sunlight. Just curious what kind of rhetoric you're hearing in the marketplace on that topic as well. Doug Howell: Well, I'll just do the anecdotal stuff and Doug can give you the facts. The anecdotal side is everybody's talking about the reset, Greg. You've got a lot of consulting brokers out there selling into the community, saying that, "Hey, if you've got a great firm, those multiples haven't changed a bit. There's an awful lot of demand. Pent-up new PE money's coming in. Hang tight." It ain't happening. Multiples are coming down. We're maintaining our discipline and we're closing deals. Now, also, you see a slowdown in our deal count. It's not as great as it was. Part of that, I believe, is sellers are actually reacting to the reset. They're realizing that the days of 15, 16, and if you've got a platform, maybe 17 times EBITDA are over. You sit there and go, "Well, okay. J. Patrick Gallagher, Jr.: Does that mean you're not going to be a seller at these prices?" I'm not going to give you a range on the downside because they do vary by what business they're in, the geography they're in, the size they are, whether they're a platform or not, and they are negotiated. There is competition. As I said in my prepared remarks, they all have choices. Clearly, pricing is coming down. We are not in the business of diluting our shareholders Doug Howell: We stand by that, and we're seeing reductions. We're still getting a nice arbitrage. If you go back to page three of the CFO Commentary, we paid about 9.4 times in the first quarter, and it is at 11.3 times here in the second quarter. Notably, there were two acquisitions that we did that have, we believe, trading-with-ourselves synergies, and we don't put those in. When we do our tuck-in acquisitions, we don't assume synergies when we do the math. We've talked about that forever. When we do a large deal like AssuredPartners, we can estimate synergies on that, we understand how being better together can create revenue and expense synergies. Typically, we don't do that when we report out our information on page three. When you really peel it back, there's about $2 million of additional revenues that are going to come out and, excuse me, EBITDA that's going to come out of a couple deals we did in the second quarter. By and large, we're paying around nine times for, let's say, U.S. retail and benefits businesses. Wholesale was getting just a little bit more, and sometimes in the U.K. Again, if you factor in the synergies that we're getting, and you see that on page three, we're clearly down below 11 times, 10 times on the multiple. That creates still an immediate arbitrage and value for our shareholders because we're still getting that multiple or that pricing arbitrage there. Greg Peters: Excellent detail. Related to that, just I noted your comments about the $10 billion of capital to deploy over the next two years. You also mentioned the repurchase activity in the second quarter, building upon what you did in the first quarter. You're prolific with the guidance you provide. Given the reset of the stock price, do you think that we should start modeling in some normalized run rate of share repurchase unless there's a recovery and just assume that's now part of the capital deployment strategy going forward? Doug Howell: Greg, I think here's the answer to that question is, I wouldn't model much. Our acquisition pipeline's pretty darn good right now. I think you're going to see more and more brokers that realize that the tools and capabilities that their customers need, they just can't do it. They just can't do it themselves. Great with their customers, they have great relationships, we get to bring them an infrastructure that makes them better and provide a better service. They're probably sitting on the sidelines a little bit right now. I think they'll be back. I wouldn't model a ton of share repurchases, but we'll certainly be opportunistic. Greg Peters: Got it. Thanks for the detail. Operator: Thank you. Our next questions come from the line of Dean Criscitiello with Wolfe Research. Please proceed with your questions. Dean Criscitiello: Hey, thanks for taking my question. Since your M&A growth has sort of slowed in recent periods, I was wondering, meaning you guys are onboarding less producers inorganically, does that kind of change your hiring strategy, or do you not think about the two in tandem? Doug Howell: Listen, we're always open for business for producers, that's for darn sure. Anybody that thinks that they want to toil and spend their life with us, I think that this would be We think that we offer one of the greatest places to work. In terms of does it change our thinking? Not really. We think that we're not going to all of a sudden throttle more into organic hiring. I think there's a lot of folks that are going to be available in the future because I think the dream of where they are in PE-owned firms is probably turning into a little bit of a nightmare. I believe that they might have more of an opportunity to hitch their star with us. The market could present that opportunity. J. Patrick Gallagher, Jr.: Those are market hires, Dean. We also remember we have the biggest commitment I know of to interns, and our internship ends next week. It's 600 kids that have come in to look at our industry. Now, we won't hire all those, but we'll make offers to the seniors, probably to 50%-60% of them, and that's continuing on from the prior year and the prior. These young people validate faster than most people think. I think that we're in a pretty good spot to maintain a sales culture that is pretty darn unique. I do think Doug's right. It will also attract others that find they just don't have the tools where they are. You can talk about jumping on the AI bandwagon, looking out to the future, but our clients are demanding this stuff today. I think it does bode well. As Doug said, we are always open to recruit new seasoned producers, and we're loading the field with interns. Doug Howell: Yeah. One thing, just to point, we're really only running about 80% of our historical average on acquisitions right now. We're running 80%. This isn't a huge step back in acquisition activity. We're talking about a 20% backwards, and that can change overnight when market conditions change. Dean Criscitiello: Understood. My follow-up, yeah, it seems like the organic growth in brokerage has been supported by strong organic and supplemental revenues. Can you just kind of highlight what's driving that and then maybe talk about the sustainability of that in the future? J. Patrick Gallagher, Jr.: Premium growth equals supplementals and contingents. Primarily supplementals. We are a premium grower. Contingents, as you know, are contingent more on profitability, and that can go up and down if there's a reset in either premiums drastically or if there's a significant amount of loss. Those losses tend, over the last few years, to be typically property. I think that line is managed well and should continue to grow. Doug Howell: Just as a reminder, I wouldn't place all that much stock on the individual lines because there are changes in contracts. In this case, we flipped a bunch of contingent contracts into supplementals here, and that's why you're seeing. You got to look at the two numbers together, and it's about 9% growth. One thing I will say maybe is that it sure shows you that distribution is appreciated. I think that the value we bring and the value we bring to the clients and what we bring to our carrier and other capital provider partners, it shows that we bring a lot of value in this value chain. Operator: Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next questions come from the line of David Motemaden with Evercore ISI. Please proceed with your questions. David Motemaden: Hey, thanks. Good evening. Doug, in the past, you had thrown some numbers out there, just in terms of potential cost savings from AI. I'm wondering if you have any thoughts in terms of when you think that those will be realized, maybe a philosophical question. When you guys think about that, is that something where you would announce more of a formal program, or is that something that we will just see coming through as incremental margin expansion on top of the, I think it was 40-50 basis points of sort of normal operating leverage? Doug Howell: It's incremental to the underlying margin expansion that we talked about to that point. If you recall, I think I said we'd get about 5% savings in our production layer costs, maybe another 10%-15% in our support layer costs, and maybe 20%-30% our back office layer. I don't see any difference in that today, and I think it'll take us three to five years to fully realize those levels. That math would produce 600 basis points of margin expansion. I'd caution that maybe there's going to be offsets to a certain extent, so maybe we can harvest two-thirds of that. Maybe there's 400 basis points there in the way we look at it. We have 1,000 projects, the flowers are blooming now. We've got dozens and dozens of real tangible projects that are showing immediate results. I'm still very comfortable in viewing that it can make us better and more cost-efficient. It's real, it's happening, and I think the work that we put in the past will pay a huge dividend because we're already centralizing so many of our points. Here's a point. Never once over the last 20 years did we talk about that we were launching a program to move work to lower cost locations. We didn't talk about the investments that we were made in the system. If you go way back when, I said that there was probably one point of margin that was being reinvested every year in betterment-type improvements. That's true today. I think that you have to understand, this is just cultural for us. We do this every day, and it's not something where we're going to announce a huge transformation exercise. You'll just see us naturally do that over time. David Motemaden: Okay, great. I appreciate that. Then maybe just as a follow-up, just on the reinsurance side, obviously still very good growth, and the outlook was lowered a little bit, but still solid at the 9%. Could you just unpack how much of that is specifically coming from share gain versus maybe buy up and just pure rate pressure? Just sort of thinking through the sustainability of that as we move forward into the next few years. Doug Howell: Yeah, most all of it is net new business. I think that's the way you've got to look at it. I think that the buyers are recognizing the value that we bring, and I think they're giving us a great shot to tell our story. There's three of us at the table that are very strong at this, and I think they're realizing exactly how strong we are. We're winning a lot of new business. Operator: Thank you. Our next question has come from the line of Andrew Andersen with Jefferies. Please proceed with your question. Andrew Andersen: Hey, good afternoon. Just since announcing the AP transaction, the expected run rate synergy has increased a few times. Could you maybe just talk about whether that's coming from existing synergy buckets simply proving larger than expected or entirely new sources of savings and revenue opportunities? Doug Howell: I think we're getting more revenue synergies than we maybe initially looked at and announced. That's great as we start trading better together. That's happening every day. I think that I got to give it to our new partners that came from AssuredPartners. They recognize the value that other parts of Gallagher bring to their relationship with their customers. That's good. I think from cost standpoint, I think that we hit it at exactly the right time where our U.S. chassis have the ability for all the investment we put into them over time to handle a substantial amount of additional revenue. The additional ads on IT, real estate, back office costs are pretty small. We're seeing this come onto our systems without adding as much cost as we thought it might. We're really picking up the volume advantages that we have here. J. Patrick Gallagher, Jr.: Also add, when Doug talks about better together, this is not just Gallagher tools being well-received by a new sales force. The better together, we've got a lot of terrific new professionals from AP working with side by side the Gallagher folks and on their own. Terrific production going on. Andrew Andersen: Thanks. Looking at the geographic table or the organic table and the geographic breakdown, it does seem like a lot of these regions, EMEA and APAC, are kind of decoupling from what I would think is an even softer price environment. Could you just talk a bit about how you are able to capture these market share gains or maybe the exposure growth underlying it? Doug Howell: Well, listen, let's make sure we put this in perspective. When it comes to market share, there's $7 trillion of premium floating around there, and we're touching $200 billion-$250 billion. The fact is there's an infinite amount of market space for us to go, and I think our folks are just showing that the tools and capabilities are letting us outshine the competitors. There is so much market opportunity out there, we're not bumping up against any problems. Market share is pretty hard to measure, but $250 billion out of $7 trillion, you can do the math. It's not a very big number. J. Patrick Gallagher, Jr.: I will tell you that when we look at our new business annualized, it's an astounding number, and it grows every year. It's like the harder we run, we don't make any progress in really denting the share. We know we're taking share. Andrew Andersen: Thank you. Operator: Thank you. Our next question has come from the line of Yaron Kinar with Mizuho Securities. Please proceed with your questions. Yaron Kinar: Thanks. Good evening. I had a question with regards to the M&A being maybe at 80% of normal capacity. How much of a boost is that to margin in brokerage? Doug Howell: Listen, in terms of deal count, we've done 80% of our average over the last 10 years, something like that. In terms of lift that the M&A is providing in our margin, actually, the roll-in of M&A, if you go back to page seven of the CFO Commentary, if you roll in, it provided no impact in the second quarter. First quarter was actually a little bit of a margin drag because of the seasonality. We haven't really, if you look at our outlook, roll-in of tuck-in M&A, we're saying is not going to provide much lift on margin in the next couple of quarters. When you aggregate them all together, you do get scale advantages, but when you're just rolling in 10 a quarter or something like that, those roll-ins are not providing much margin lift. Yaron Kinar: Okay. Conversely, I think the divestiture activity has been a little bit larger than normal the last few quarters. What kind of impact has that had on margins? Doug Howell: Well, listen, I think some of those businesses they fit better elsewhere than they do inside of Gallagher. I think that with AssuredPartners coming on, we said, "Listen, we're just going to refocus and get out of some businesses that would be other." We sold off our non-standard auto business that we went into, I don't know, eight years ago, something like that. I just think that naturally provides a little bit of margin lift if they were underperforming. A lot of these that we get out of, it's because they just don't fit in our current portfolio. Yaron Kinar: Right. Okay. Thank you. Doug Howell: Thanks, Yaron. Operator: Thank you. Our next question has come from the line of Mark Hughes with Truist. Please proceed with your questions. Mark Hughes: Yeah. Thank you. Good afternoon. On the benefits business in the U.S. P&C, that's been lagging a little bit here lately. Is this the right kind of go-forward organic growth rate, or should that be a little bit faster? Doug Howell: Let's see. Let me see if I understand the question. Are you talking about just our health and welfare benefit business? Mark Hughes: Yeah Doug Howell: your question? Is that what you're teasing out there? Mark Hughes: Yeah. Doug Howell: We take out the kind of the large life cases so that, those can be lumpy, but they do fuel our organic a little bit, but we've moved past that discussion. Our benefits brokerage, 3%-4%, I think in today's environment, is a pretty good growth rate in that business. We're not seeing tons of employment growth in total happening. I think they're looking more and more at ways to attract talent. There could be some upside to that number going forward as people understand that they really need our expertise to help them with talent attraction, retention. Right now, the employees are staring in the face massive amounts of medical cost inflation. I think that you could see an upside on that if you looked at it over the next three months, six months, 15 months, something like that. I think that employers are going to need our services now that with, I'm not going to say it's runaway inflation, but it's pretty close. Mark Hughes: Yeah. J. Patrick Gallagher, Jr.: Every buyer, Mark, is they're fraught. I mean, that's what we're hearing everywhere you go. That the pricing, the cost, medical in particular, is just killing us. I do think that's going to provide us with more opportunity. I agree with Doug that where we are now is probably about right. Mark Hughes: Okay. On the risk management margin, Doug, I think you described 22%+. It seems like that just continues to move higher and higher. You've talked about AI, some new capabilities. Is there an upper bound? I think there used to be, maybe you're talking about 20%. Is it just one of these, it's going to keep going 50 basis points, is the way to think about it? Doug Howell: Yeah. Listen, I actually think that they're having some good success with AI. I think their customers are understanding the value they're bringing. They're doing a great job of telling their story about how it's not our cost that matters, it's the total cost of settling claims. Settling is getting their folks back to work, protecting brands by being better on the general liability side. I think that this is a business that's really reached. a good scale point. You could see. Is it 50 basis points a year? Yeah, if they continue to grow 12% a year like they've done from time to time, that's not unreasonable at all. This is a great business. It comes a little bit more lumpy as they attract some larger customers. It really is at a point right now where it's getting some scale advantages. J. Patrick Gallagher, Jr.: You can't underestimate the scale advantages, Mark. I'm looking out at the insurance company marketplace as a place that I think over the next decade just throws in the towel. They just can't keep up. We've got one example that I can't mention any names, but just our AI fraud detection capabilities has saved one, and this is auditable numbers, we've saved one client $100 million. I don't know an insurance company that has the capability we put forward on that account. Mark Hughes: Just out of curiosity, what was the fraud? J. Patrick Gallagher, Jr.: Bad people. Doug Howell: Medical fraud. Mark Hughes: Very good. Thank you. J. Patrick Gallagher, Jr.: Thanks, Mark. Operator: Thank you. Our next questions come from the line of Meyer Shields with KBW. Please proceed with your questions. Meyer Shields: Thanks. This is sort of a follow-up, I guess, to the last question. We've been hearing for years about social inflation, I was hoping you could talk about how Gallagher Bassett's ability to combat that has changed or improved over the last few years. Doug Howell: Well, I think they just do a damn good job of getting after the claims and making sure that they get in front of the claimant, and their employer, and they say that, "Listen, going down the litigation path isn't going to prove good for anybody but the plaintiff's bar." They have done a terrific job of educating that it's a return to work. It's three points of contact by nurses. Our nurse case managers have a really professional way of dealing with somebody. They're breaking down this barrier between the adversary claim adjuster with a resolution manager, and just that philosophical difference reduces the total cost of the claim. They are a resolution manager to manage this case versus a claim adjuster that just wants to fight you tooth and nail. J. Patrick Gallagher, Jr.: The other part of this is AI, Myer. You take a look at one of the problems with a TPA, any claims organization. Hundreds, thousands, hundreds of thousands of claims poured in the door. They're just pouring in. Sorting through that to figure out which one of these have I got to put my absolute top people on is near impossible. It's that one that blows up. The more we can scale AI to look at that stuff as it's coming in, the more we can say, "Whoa, whoa, flag this." It could be territory, it could be law firm, it could be 1 million different things. It's all of a sudden, sort this out, pull it off the conveyor belt and manage it. We're getting better and better at saying to people, "If you want to have an improvement in your outcomes, that's how to measure Gallagher Bassett," and we're getting better at proving that. Meyer Shields: Okay. That's very helpful. I really appreciate it. Second question. Doug, looking at the updated organic growth by line of business, this is a tremendous table. I'm trying to understand the seasonality and specialty in U.S. wholesale where you can get first half of the year. Doug Howell: Meyer. J. Patrick Gallagher, Jr.: You broke up there. Doug Howell: You broke up on us right when you asked the question. Sorry. Meyer Shields: I'm sorry. Am I coming through now? Doug Howell: Yep, you are. J. Patrick Gallagher, Jr.: Yep. Meyer Shields: Okay. I'm trying to understand the seasonality in the specialty U.S. wholesale line, because you've got the first half of the year at 4%, and you're still anticipating 6% for the full year. I didn't think that there was that much seasonality in quarterly production. Doug Howell: Those businesses are impacted by property, especially in the second quarter. I think there are also some nice 7-1 placements that come up on some of the larger when we get into municipalities, pools, reciprocals tend to have a 7-1 renewal date. There can be some seasonality in that. Benefits tends to have its biggest quarter in the first quarter, then you get into some of our specialty lines that have 7-1 renewal dates on it. Meyer Shields: Okay. It's a third quarter issue more than a fourth quarter? Doug Howell: Fourth quarter, all of a sudden you start getting into complex placements. You have a pretty good October 1 group also. Meyer Shields: Okay, perfect. Thank you so much. Operator: Thank you. Our next questions come from the line of Andrew Kligerman with TD Cowen. Please proceed with your questions. Andrew Kligerman: Great. Thank you. Maybe just staying with that wholesale question, with the guidance at 6%, could you talk a little bit about I think in your prepared remarks, you talked about the stability, even where property pricing is under pressure, you are still seeing stable flows. The part A of it is, are you seeing the flow of business very stable from E&S to admitted? It is just not moving that much, it is just a pricing situation. Then with that 6% guidance, do you see that number kind of We will stay with the first part, and I will come back to the six. Doug Howell: Yeah, we are just not seeing it flowing back into the admitted market the way it was in the past. I think E&S is here to stay. I think the complexity of a lot of risks that we write, I think the nimbleness of that business, it is just not flowing back into the admitted market that maybe we would have seen 20 years ago. The E&S market is not the market of last resorts anymore. I think it provides a really good deep niche of underwriting expertise, and our producers do a great job of making sure that they offer that to their customers, because it is a viable solution. Andrew Kligerman: Got it. Then just tying that to AssuredPartners, because I think if AssuredPartners wholesaling was going elsewhere, if it comes into AJ Gallagher, that is considered organic growth. If so, is that having a material impact on that six points of guidance? Any numbers you could put around that? J. Patrick Gallagher, Jr.: I'll let Doug talk about the numbers. Andrew, I'll tell you that the consolidation of that wholesale work, which was, you're correct, spread between dozens, if not hundreds, of wholesalers, is going extremely well. AP was already about trying to figure out how to consolidate wholesale relationships. As you know, we own RPS, it's been a very good working relationship that's grown between the two. We were trading with them before, but we're seeing some very nice synergies there. Doug Howell: Numerical, it's not moving the needle for overall Gallagher, but it is meaningful. Remember, our retail producers understand it needs to go to the place that's best for the customer. I think there's an awareness build that's going on that RPS and RT Specialty and some of our other specialty lines do provide a better solution for the client. That's not a one-year sale. It takes time. It's not meaningfully moving it right now. I think if we look back in three years, there's probably $100 million of opportunity that will be better trading together than it is having it go to other organizations. Andrew Kligerman: Got it. If I could just sneak one last one on the risk management. Just such awesome numbers, 10% and 12% organic in the last two quarters. Could you size the universe out there or the market that's available to you to continue this kind of awesome growth? J. Patrick Gallagher, Jr.: Let's figure this one out, Andrew. $7 trillion of premium in the global market. Five of that-ish, four to five of that trillion, is non-life, non-health. Let's call it PC. I don't know what the personal lines number would be. About 65% of that turns into a claim every day. I think we got plenty of market. Doug Howell: Yeah, we pay about. J. Patrick Gallagher, Jr.: Every year, not every day. Every year, about 60% of that trillion turns into a claim. Doug Howell: Yeah, let's say right now we're paying about $17 billion in claims ± on that. If Pat's math is right, you take 65% times $3 billion, maybe there's sorry, I said three trillion, $1.8 trillion of claims, and we're touching $18 billion of it. It is a huge market with great opportunity, and it's a market where a one-size-fits-all claim adjuster doesn't work anymore. You need deep vertical claim resolution managers that are proficient in a deep vertical. Settling a coffee shop slip and fall is not settling a trucking loss at 80 miles an hour. It's a completely different animal. J. Patrick Gallagher, Jr.: Trying to do comp in Ohio and in California. No problem, I'm licensed in both. Not going to work. Doug Howell: Right. Andrew Kligerman: Sounds like you'll make a dent. Doug Howell: Yeah. I think we will. J. Patrick Gallagher, Jr.: Yep. I think so. Thanks, Andrew. Operator: Thank you. Our final questions will come from the line of Mike Zarembski with BMO Capital Markets. Please proceed with your questions. Mike Zaremski: Oh, great. Just quick numbers follow-up for Doug. On the 10% cash tax rate, as we think about modeling it cash flow in outer years, should we be just glide pathing that up to the GAAP tax rate over time, or is it more of a cliff in outer years? Thanks. Doug Howell: Two things on that. I think the amortization will continue to refresh itself as we continue to do more M&A. I think you're going to see that. It's the equivalent of an interest shield due in your capital asset pricing model. If you think about that will refresh itself. When it comes to the tax credits, we're darn good at those. These are not loopholes. These are government-permitted credits, and we're good at it. I think that we've got many years left to run through the $628 million of credits we have sitting on our balance sheet. We do have other projects that we're looking at that might keep that number up. We might be able to continue to generate $100 or $200 million of tax credits after those run out. We'll see what happens with the laws and the rules, I think that we'll be in a position to be able to take a look at tax credit opportunities across a variety of fronts and globally also. Mike Zaremski: Okay. Thank you. J. Patrick Gallagher, Jr.: Thank you again, all of you, for joining us this afternoon. We delivered another excellent quarter and continue to execute against the same strategy that has guided Gallagher for decades. We have strong organic growth, a powerful active M&A strategy, successful integration across our recent acquisitions, and a culture that continues to differentiate us. Most importantly, to our more than 73,000 colleagues around the world, thank you. Your talent, dedication, and commitment to clients are what makes this company great, and that is the Gallagher way. Thank all of you for being with us, and have a nice evening. Operator: Thank you. This does conclude today's conference call. You may disconnect your lines at this time. Enjoy the rest of your day. Before you buy stock in Arthur J. Gallagher & Co., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arthur J. Gallagher & Co. wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Arthur J. Gallagher & Co. The Motley Fool has a disclosure policy. Gallagher (AJG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

ROLLING MEADOWS, Ill., July 30, 2026 /PRNewswire/ -- Arthur J. Gallagher & Co. (NYSE: AJG) today reported its financial results for the quarter ended June 30, 2026. Management will host a webcast conference call to discuss these results on Thursday, July 30, 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, 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. For second quarter 2025, reported and adjusted amounts for the Brokerage Segment include approximately $144 million of incremental interest income, or approximately 42 cents after-tax, earned on the cash proceeds associated with the AssuredPartners Financing in December 2024. For second quarter 2026, the pretax impact of adjustments for the Brokerage, Risk Management, and Corporate Segments totals $505 million, $12 million and $33 million, respectively, and corresponding adjustment to the provision (benefit) for income taxes was $130 million, $3 million and ($7) million, respectively, relating to these adjustments. A detailed reconciliation is shown on page 17. (1 of 20) "We delivered an excellent second quarter!" said J. Patrick Gallagher, Jr., Chairman and CEO. "Our combined Brokerage and Risk Management segments delivered revenue growth of 24%, including organic growth of 6%. Our growth reflects the strength and diversity of our model, the continued power of our two-pronged growth strategy, and our culture of client-first execution. Client retention remains strong, new business generation continues to be outstanding and clients continue to seek broader solutions across our platform. "In an increasingly complex risk environment, client demand for our advice, analytics, market access, specialty expertise and claims advocacy remains robust. Looking ahead, we remain confident in our ability to build on our momentum and continue creating long-term value for our clients, colleagues and shareholders." For the six-month period ended June 30, 2026, the pretax impact of adjustments for the Brokerage, Risk Management, and Corporate Segments totals $936 million, $27 million and $63 million, respectively, and corresponding adjustment to the provision (benefit) for income taxes was $241 million, $7 million and ($27) million, respectively, relating to these adjustments. A detailed reconciliation is shown on page 19. (2 of 20) Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions): See "Information Regarding Non-GAAP Measures" beginning on page 9 of 20. (3 of 20) Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions): See "Information Regarding Non-GAAP Measures" beginning on page 9 of 20. (4 of 20) Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions): See "Information Regarding Non-GAAP Measures" beginning on page 9 of 20. Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions): See "Information Regarding Non-GAAP Measures" beginning on page 9 of 20. (5 of 20) 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 20. (6 of 20) Corporate Segment Reported GAAP to Adjusted Non-GAAP Reconciliation Information (dollars in millions): See "Information Regarding Non-GAAP Measures" beginning on page 9 of 20. (7 of 20) Interest, banking costs and debt - At June 30, 2026, Gallagher had $9,550 million of borrowings from public debt, $2,683 million of borrowings from private placements and $1,365 million of borrowings under its line of credit facility. In addition, Gallagher had $134 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. Clean energy-related - For 2026, 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 rates for the quarters ended June 30, 2026 and 2025 were 21.7% and 22.3%, respectively. AssuredPartners - In fourth quarter 2024 and first quarter 2025, we raised a total of approximately $14 billion of cash via a follow-on common stock offering and senior notes issuance to fund the AssuredPartners acquisition (collectively, the AssuredPartners Financing), which was completed in third quarter 2025 for approximately $14 billion. Share Repurchases - In the second quarter of 2026, Gallagher repurchased approximately 0.9 million shares of its common stock for approximately $170 million. Webcast Conference Call - Gallagher will host a webcast conference call on Thursday, July 30, 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. (8 of 20) 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. 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; protectionism such as tariffs and trade disruptions; a recession or economic downturn; a U.S. government shutdown; political instability, such as global armed conflicts; its actual acquisition opportunities, including closing risks related to pending acquisitions; risks with respect to larger acquisitions such as AssuredPartners, the largest acquisition in its history, including risks related to its ability to successfully integrate operations and the possibility that its assumptions may be inaccurate resulting in unforeseen obligations or liabilities and failure to realize expected benefits of such 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 to its business 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; risks related to "AI-washing"; 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 natural or man-made 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, 2025 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. (9 of 20) 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 17, 18, 19 and 20 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. 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 AssuredPartners and Woodruff Sawyer, which closed in August 2025 and April 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 we 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. 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 levelized the prior year for the change in current year tax rates. Clean energy-related, which represents the impact of adjustments in first quarter 2026 related to the write-down of a clean energy-related investment. Legal and tax related, which represents the impact of adjustments in second quarter 2026 related to costs associated with legal and tax matters. Benefit plan related, which represents the impact of adjustments in second quarter 2026 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. (10 of 20) 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 for the Corporate segment, the clean energy related adjustments described above) 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. 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 year 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 5 and 6), 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 20) (12 of 20) (13 of 20) (14 of 20) (15 of 20) (16 of 20) (17 of 20) (18 of 20) (19 of 20) Contact: Sara Walsh630-285-3593 or [email protected] (20 of 20) View original content:https://www.prnewswire.com/news-releases/arthur-j-gallagher--co-announces-second-quarter-2026-financial-results-302839454.html

Arthur J. Gallagher (AJG) came out with quarterly earnings of $2.84 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $2.33 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this insurance and risk-management company would post earnings of $4.4 per share when it actually produced earnings of $4.47, delivering a surprise of +1.59%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Arthur J. Gallagher, which belongs to the Zacks Insurance - Brokerage industry, posted revenues of $3.96 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.96%. This compares to year-ago revenues of $3.18 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Arthur J. Gallagher shares have added about 3.9% since the beginning of the year versus the S&P 500's gain of 6.9%. While Arthur J. Gallagher has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Arthur J. Gallagher was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.99 on $3.98 billion in revenues for the coming quarter and $13.22 on $16.69 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Brokerage is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. eHealth (EHTH), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This provider of internet-based heath insurance agency services is expected to post quarterly loss of $0.52 per share in its upcoming report, which represents a year-over-year change of +46.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. eHealth's revenues are expected to be $31.98 million, down 47.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report eHealth, Inc. (EHTH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Arthur J. Gallagher (AJG) reported $3.96 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 24.5%. EPS of $2.84 for the same period compares to $2.33 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $4.03 billion, representing a surprise of -1.96%. The company has not delivered EPS surprise, with the consensus EPS estimate being $2.84. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Arthur J. Gallagher performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Brokerage - Compensation expense ratio: 57.6% compared to the 56.3% average estimate based on three analysts. Risk Management Segment - Operating expense ratio: 18.3% compared to the 18.3% average estimate based on three analysts. Risk Management Segment - Compensation expense ratio: 60.5% compared to the 58.9% average estimate based on three analysts. Brokerage - Operating expense ratio: 15.3% versus 13.8% estimated by three analysts on average. Revenues- Total Company- Fees: $1.18 billion versus the four-analyst average estimate of $1.2 billion. The reported number represents a year-over-year change of +22.9%. Revenues- Total Company- Interest income, premium finance revenues and other income: $98 million compared to the $83.8 million average estimate based on four analysts. The reported number represents a change of -57.9% year over year. Revenues- Risk Management Segment- Revenues before reimbursements: $453 million compared to the $429.57 million average estimate based on four analysts. The reported number represents a change of +15.6% year over year. Revenues- Brokerage Segment- Supplemental revenues: $141 million versus the three-analyst average estimate of $112.84 million. The reported number represents a year-over-year change of +37.2%. Revenues- Brokerage Segment- Contingent revenues: $91 million versus $83.19 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +25.2% change. Revenues- Brokerage Segment- Interest income, premium finance revenues and other income: $90 million versus $77.62 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -59.7% change. Revenues- Risk Management Segment- Fees: $445 million versus $425.31 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +16.1% change. Revenues- Risk Management Segment- Interest income and other income: $8 million versus the three-analyst average estimate of $8.11 million. The reported number represents a year-over-year change of -7%. View all Key Company Metrics for Arthur J. Gallagher here>>> Shares of Arthur J. Gallagher have returned +12.2% over the past month versus the Zacks S&P 500 composite's -1.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research