stockrowLatest quarter
Aon reported third-quarter revenue of $4.1 billion, exceeding the consensus by 0.59%, although both figures rounded to $4.1 billion. Adjusted earnings of $3.36 per share also beat the $3.34 consensus.
Revenue rose from $4.0 billion a year earlier. Aon’s filing attributed organic growth to new business and client retention, partly offset by divestitures. Risk Capital revenue increased, while Human Capital revenue declined. Within the latter, Wealth Solutions revenue fell primarily because of the sale of NFP Wealth, though its organic revenue grew.
The filing said operating margin fell to 19.7% from 20.4%, as growth-related expenses, long-term investments and restructuring program costs rose. Aon’s adjusted operating margin increased to 27.0%, with organic growth and restructuring savings partly offset by higher expenses. Diluted earnings were $2.23 per share, up from $2.11. Aon generated $1.1 billion in quarterly free cash flow.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $4.1 billion | $4.0 billion | 2.60% |
| Diluted EPS | $2.28 | $2.11 | 8.14% |
| Gross margin | 44.5% | 43.5% | 1.0 percentage point |
| Operating margin | 19.7% | 20.4% | −0.7 percentage points |
| Free cash flow | $1.1 billion | $1.1 billion | 1.67% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $3.36 | $3.34 | Beat by 0.60% |
| Revenue | $4.1 billion | $4.1 billion | Beat by 0.59% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Greg Case said clients face interconnected risks from geopolitical uncertainty, uneven economic conditions, cyber threats and technological change. He said Aon is bringing its risk and human capital expertise together with data and analytics to address those needs.
Interim CFO Nadin Virani said new business came from both new clients and additional work for existing clients. He said pricing was softer in property and casualty insurance and reinsurance, but the combined effect of rates and client exposures remained slightly positive. In commercial risk, he cited demand for specialized underwriting and a pipeline of data-center projects. Virani said treaty placements supported reinsurance growth as new business and retention more than offset lower rates.
Virani attributed adjusted margin expansion to restructuring savings and operating leverage from Aon Business Services. He said technology and AI were helping lower unit costs while funding investment. Revenue-generating headcount increased 4% year to date, and he said the contribution from earlier hiring cohorts should rise as they become more productive.
In the discussion of reinsurance, Deputy CEO Andy Marcell said Aon had diversified beyond transactional business into capital advisory, strategy, technology and actuarial services. Looking to the next quarter, Virani cited demand for strategy and technology services and momentum in international facultative placements.
Case said the pending USI acquisition would combine with NFP and Aon’s operations to serve the U.S. middle market and provide direct access to excess and surplus insurance. Discussing integration, Virani said Aon had identified cost and revenue workstreams, including technology savings, placement optimization and cross-selling. He said the company would provide quarterly updates on synergies. Asked about capital allocation, Virani reiterated priorities of reducing debt, funding the dividend, investing for growth and returning excess capital. Case said Aon does not report NFP’s performance externally.
Guidance
Aon expects foreign currency translation to have a de minimis impact on adjusted earnings per share in the fourth quarter if exchange rates remain stable. Its previous outlook addressed the third quarter and also expected a de minimis impact under that condition.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Operating margin, Non Gaap Standalone | FY2026 | Aon expects standalone margin expansion in FY2026. | — | — |
| Free cash flow, Standalone | FY2026 | Aon expects double-digit standalone free cash flow growth in FY2026. | — | — |
| Tax rate, non-GAAP | FY2026 | 19.5%–20.5% | — | New |
| Operating expenses, Restructuring Savings | FY2026 | $100.0 million | — | New |
| Headcount, Priority Growth Hires | FY2026 | Aon expects its population of priority growth hires to expand by 4% to 8% in FY2026. | — | New |
| Revenue, Reinsurance | Q4 FY2026 | Aon expects strong organic revenue growth in reinsurance in Q4 FY2026. | — | — |
| EPS, non-GAAP | FY2026 | $0.42 | $0.42 | Held |
| EPS, non-GAAP | Q4 FY2026 | Aon expects foreign currency translation to have a de minimis impact on adjusted EPS in Q4 FY2026 if exchange rates remain stable. | Q3 FY2026: Aon expects foreign currency translation to have a de minimis impact on adjusted EPS in Q3 FY2026 if currency remains stable at current rates. | — |
| Revenue, Organic | FY2026 | Aon expects mid-single-digit or greater organic revenue growth in FY2026. | — | — |