Arthur J. Gallagher & Co. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total company revenue before reimbursements was $3,930 million for the third quarter of 2026, compared to $3,325 million in the prior year period.
• Total company net earnings were $406 million for the third quarter of 2026, an increase from $273 million in the prior year period.
• Diluted net earnings per share (EPS) were $1.55 for the third quarter of 2026, up from $1.04 in the prior year period.
• Adjusted diluted EPS was $3.00 for the third quarter of 2026, compared to $2.31 in the prior year period.
• Total company EBITDAC was $1,048 million for the third quarter of 2026, compared to $812 million in the prior year period.
• Adjusted EBITDAC was $1,253 million for the third quarter of 2026, compared to $1,013 million in the prior year period.
• Brokerage segment revenue was $3,473 million (reported) and $3,460 million (adjusted) for the third quarter of 2026, compared to $2,922 million (reported) and $2,928 million (adjusted) in the prior year period.
• Brokerage segment net earnings were $515 million (reported) and $871 million (adjusted) for the third quarter of 2026, compared to $409 million (reported) and $688 million (adjusted) in the prior year period.
• Risk Management segment revenue was $457 million for the third quarter of 2026, compared to $402 million in the prior year period.
• Risk Management segment net earnings were $61 million (reported) and $68 million (adjusted) for the third quarter of 2026, compared to $50 million (reported) and $58 million (adjusted) in the prior year period.
• Corporate segment net loss was $170 million (reported) and $157 million (adjusted) for the third quarter of 2026, compared to $186 million (reported) and $142 million (adjusted) in the prior year period.
• Consolidated effective income tax rate was 21.2% for the third quarter of 2026, compared to 21.1% in the prior year period.
• Total company debt at September 30, 2026, included $9,550 million in public debt, $2,683 million in private placements, $630 million in line of credit borrowings, and $228 million in premium finance receivables borrowings.
• Total assets were $79,064 million at September 30, 2026, compared to $70,665 million at December 31, 2025.
• Total liabilities were $54,993 million at September 30, 2026, compared to $47,318 million at December 31, 2025.
• Total stockholders' equity was $24,071 million at September 30, 2026, compared to $23,347 million at December 31, 2025.

Guidance and Future Outlook:

• Management stated they remain very confident in their ability to create long-term value for clients, colleagues, and shareholders.
• The company highlighted a "two-pronged growth strategy" combining organic growth and acquisitions.
• The company noted significant opportunities ahead as risk becomes more complex and clients value advice, advocacy, analytics, and market access.
• Management reported 26 consecutive quarters of double-digit adjusted EBITDAC growth.

Business Segments and Product Lines:

• Brokerage segment organic revenue growth was 5% for the third quarter of 2026.
• Brokerage segment organic base commissions and fees grew 4% year-over-year for the third quarter of 2026.
• Brokerage segment organic supplemental revenues grew 14% year-over-year for the third quarter of 2026.
• Brokerage segment organic contingent revenues remained flat (0% change) year-over-year for the third quarter of 2026.
• Risk Management segment organic fees grew 10% year-over-year for the third quarter of 2026.
• The Brokerage segment closed 5 acquisitions in the third quarter of 2026, with estimated annualized revenues acquired of $102 million.
• The Risk Management segment closed 0 acquisitions in the third quarter of 2026.
• The company reported strong client retention and excellent new business.
• The company noted continued growth in its clients' businesses.
• Brokerage segment adjusted compensation expense ratio was 51.3% for the third quarter of 2026, down from 53.0% in the prior year period.
• Brokerage segment adjusted operating expense ratio was 13.4% for the third quarter of 2026, down from 13.7% in the prior year period.
• Risk Management segment adjusted compensation expense ratio was 58.6% for the third quarter of 2026, down from 59.7% in the prior year period.
• Risk Management segment adjusted operating expense ratio was 18.6% for the third quarter of 2026, up from 18.4% in the prior year period.
• Adjusted EBITDAC margin for the Brokerage segment was 35.3% for the third quarter of 2026, up from 33.3% in the prior year period.
• Adjusted EBITDAC margin for the Risk Management segment was 22.8% for the third quarter of 2026, up from 21.9% in the prior year period.

Market and Competitive Landscape:

• The company operates in approximately 130 countries through owned operations and a network of correspondent brokers and consultants.
• Management noted that as risk becomes more complex, clients continue to value the firm's advice, advocacy, analytics, and market access.
• The company highlighted the strength and resilience of its diversified model as market conditions evolve.

Risks and Challenges:

• Forward-looking statements are subject to risks including global economic and geopolitical events, fluctuations in interest and inflation rates, protectionism, recessions, and political instability.
• Risks include actual acquisition opportunities, closing risks, and integration risks associated with large acquisitions like AssuredPartners.
• Risks include reputational issues related to sustainability activities, compliance with climate regulations, and potential backlash.
• Cybersecurity risks and risks associated with the effective application of technology, data analytics, and artificial intelligence are noted.
• Risks include regulatory, data privacy, and competition risks related to AI usage.
• Heightened competition for talent and increased compensation costs are identified as challenges.
• Risks related to international operations, including regulatory, tax, and compliance issues, are noted.
• Risks include changes in accounting standards, premium rates, and insurance markets generally.

Management Commentary and Tone:

• J. Patrick Gallagher, Jr., Chairman and CEO, stated, "We delivered another excellent quarter!"
• Management expressed confidence in the strength of their two-pronged growth strategy and the diversity of their business.
• Management highlighted the roll-in of AssuredPartners, including the impact of compensation savings related to synergies.
• Management noted that lower interest income revenues in the quarter (compared to the prior year which included interest from the AssuredPartners Financing) impacted certain ratios, but were offset by synergies.

Other Key Points:

• In the third quarter of 2026, Gallagher repurchased approximately 0.4 million shares of common stock for approximately $100 million.
• For the nine-month period ended September 30, 2026, Gallagher repurchased approximately 2.7 million shares of common stock for approximately $580 million.
• Dividends declared per share were $0.70 for the third quarter of 2026, compared to $0.65 in the prior year period.
• The AssuredPartners acquisition closed in the third quarter of 2025 for approximately $14 billion, funded by a follow-on common stock offering and senior notes issuance in late 2024 and early 2025.
• The company incurred $477 million in pretax adjustments for the Brokerage, Risk Management, and Corporate segments in the third quarter of 2026.
• The Brokerage segment reported $102 million in estimated annualized revenues acquired from 5 acquisitions in the third quarter of 2026.
• The Risk Management segment reported $15 million in estimated annualized revenues acquired from 2 acquisitions in the nine-month period ended September 30, 2026.
• The Corporate segment includes a net unrealized foreign exchange remeasurement loss of $9 million in the third quarter of 2026.
• The Corporate segment includes a write-down of a clean energy-related investment in the nine-month period ended September 30, 2026.
• The Corporate segment includes costs associated with the termination of the Gallagher US defined pension plan in the nine-month period ended September 30, 2026.
• Total workforce at the end of the third quarter of 2026 was 74,614 employees (57,587 in Brokerage and 11,454 in Risk Management).