Arthur J. Gallagher’s Adjusted Earnings Grow 25% in Third Quarter as Revenue Expands 18%
Key Facts
Arthur J. Gallagher reported results for the quarter ended September 30, 2026, on October 29, with its chief executive saying adjusted net income and adjusted EBITDAC rose 25% year over year. Combined revenue in its brokerage and risk management segments grew 18%, including organic growth of 5%. The CEO said the increase in adjusted EBITDAC marked the 26th consecutive quarter of double-digit growth. Reported earnings, however, differed from adjusted figures: reported net income was $406 million, compared with $273 million in the third quarter of 2025. Reported diluted earnings per share rose to $1.55 from $1.04, according to the company’s statement published via PR Newswire.
Revenue before reimbursements was $3.93 billion, compared with $3.325 billion a year earlier, while total revenue reached $3.976 billion, up from $3.365 billion. The brokerage segment recorded revenue of $3.473 billion and net income of $515 million. The risk management segment generated revenue of $457 million and net income of $61 million. In brokerage, total organic revenue grew 5%, with base commissions and fees up 4% and supplemental revenue up 14%. Contingent revenue was unchanged on an organic basis, according to the company’s table, placing the segment’s organic growth below the 18% increase in combined revenue.
The results came as investors monitored the company’s ability to sustain growth while integrating its largest acquisition, amid a slowdown in commercial insurance pricing. The acquisition of AssuredPartners was valued at $13.5 billion, according to a Reuters report cited by Investing.com. The company closed the acquisition on August 18, 2025, and organic growth figures for both comparison periods exclude AssuredPartners revenue, according to the company. In the third quarter of 2026, Gallagher closed five acquisitions with estimated annual revenue of $102 million for the acquired businesses. In the corresponding period of 2025, it closed six acquisitions with estimated annual revenue of $3.036 billion. For the nine months ended September 30, the company recorded 19 acquisitions with estimated annual revenue of $209 million, compared with 25 acquisitions and $3.390 billion in the year-earlier period.
In an investor update in late September, management lowered its full-year organic brokerage growth forecast to about 5%, from 5.5% previously. The revision came amid a slowdown in commercial insurance pricing, while Reuters said investors were monitoring the integration of AssuredPartners. On expenses, Gallagher said its reported operating expense ratio fell 0.4 percentage points from the third quarter of 2025. The company attributed the decline mainly to lower acquisition integration costs and workforce-related expenses. Additional technology investments partially offset the decline, according to the earnings statement.
For the first nine months of 2026, reported net income was $1.553 billion, compared with $1.350 billion in the same period of 2025. The company declared a third-quarter dividend of $0.70 per share, compared with $0.65 a year earlier. It also repurchased about 0.4 million shares for about $100 million during the quarter. For the nine months ended September 30, total repurchases were about 2.7 million shares valued at approximately $580 million. AJG shares closed at $260.42 on October 28, according to EL7 data. A call to discuss the results was scheduled for October 29 at 5:15 p.m. Eastern Time, with a replay available for at least 90 days.
Ahead of the announcement, analysts had expected earnings of $2.99 per share and revenue of $3.98 billion, compared with earnings per share of $2.84 and revenue of $3.95 billion in the previous quarter. Investing.com said third-quarter adjusted earnings per share came in at $3.00, narrowly beating the estimate. It put actual revenue at $3.92 billion, below analysts’ estimate of $3.98 billion. That comparison differs from the reported net income and diluted earnings per share in the company’s statement. The results therefore showed strong growth in reported and adjusted earnings, alongside a gap between combined revenue growth and organic growth, while management’s reduced annual organic brokerage growth forecast remains an important backdrop for assessing performance.