Arthur J. Gallagher & Co. (AJG) Earnings & Analysis

Latest quarter

Arthur J. Gallagher reported adjusted earnings of $3.00 per share for the quarter ended September 30, 2026, below the $3.01 consensus. On the consensus basis, revenue was $3.9 billion, also below the $4.0 billion estimate.

Gallagher reported quarterly revenue of $4.0 billion, up from $3.4 billion a year earlier, and diluted earnings per share of $1.57, compared with $1.04. CEO J. Patrick Gallagher Jr. said acquisitions and organic growth contributed to an 18% revenue increase across the combined brokerage and risk management segments.

The company’s filing said brokerage base commissions and fees rose $574 million in the quarter, reflecting acquisitions and organic growth. Operating margin was 17.2%, compared with 15.1% a year earlier. The filing also reported $2,310 million in operating cash flow for the nine months ended September 30, 2026.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO J. Patrick Gallagher Jr. said new business, client retention and growth in insured exposures supported organic revenue growth, while insurance rates contributed less than they had in recent years. He said clients were using savings from softer property pricing to buy back coverage, increase limits or change how they retain and transfer risk.

Gallagher said property renewal premiums fell 6% in the third quarter, compared with a 10% decline in the second. He attributed the sequential improvement largely to the mix and seasonality of renewals rather than a change in the underlying property market. In employee benefits, he said clients deferred several larger consulting projects while concentrating on rising medical and prescription costs.

Asked about pricing and growth, Gallagher said rates do not translate directly into revenue and that a sharp decline in casualty pricing could create a drag. He said the effect of a detailed change in pricing was difficult to quantify because clients’ insurance purchases and exposures also matter.

On competition, CFO Douglas Howell said Gallagher was not seeing a migration from excess and surplus insurance back to admitted carriers in its renewal book. He said retailers valued the flexibility and access to specialist capital offered by that market.

Howell said brokerage adjusted EBITDA margin reached 35.3% in the quarter. He attributed underlying margin expansion to standardized processes, greater use of centers of excellence and technology, while Assured Partners also contributed margin lift. He said its back-office systems were integrated and operating.

Gallagher said the company completed five tuck-in acquisitions during the quarter, representing approximately $100 million of estimated annualized revenue. Howell said acquisitions closed through the call date could add about $65 million to brokerage revenue and $5 million to risk management revenue in the fourth quarter.

Guidance

For full-year 2026, CFO Douglas Howell said Gallagher expects brokerage organic revenue growth of around 5%, down from the company’s previous forecast. Howell said Assured Partners will enter the brokerage organic comparison for the first time in the fourth quarter.