Arthur J. Gallagher & Co. Announces Fourth Quarter and Full Year 2025 Financial Results

ROLLING MEADOWS, Ill., Jan. 29, 2026 /PRNewswire/ -- Arthur J. Gallagher & Co. (NYSE: AJG) today reported its financial results for the quarter ended December 31, 2025. Management will host a webcast conference call to discuss these results on Thursday, January 29, 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 and 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.

Summary of Financial Results - Fourth Quarter

Revenues Before

Diluted Net Earnings

Reimbursements

Net Earnings (Loss)

EBITDAC

(Loss) Per Share

Segment

4th Q 25

4th Q 24

4th Q 25

4th Q 24

4th Q 25

4th Q 24

4th Q 25

4th Q 24

(in millions)

Brokerage, as reported

$ 3,169

$ 2,296

$ 317

$ 774

$ 661

$ 1.21

$ 1.37

Net losses (gains) on divestitures

(20)

(15)

(20)

(0.06)

Acquisition integration

106

0.30

0.13

Workforce and lease termination

107

0.31

0.10

Acquisition related adjustments

0.12

0.17

Amortization of intangible assets

223

121

0.86

0.53

Effective income tax rate impact

0.01

Levelized foreign currency

translation

0.02

Brokerage, as adjusted *

3,149

2,327

714

537

1,015

769

2.74

2.33

Risk Management, as reported

417

369

0.19

Net (gains) on divestitures

(1)

Acquisition integration

Workforce and lease termination

0.01

Acquisition related adjustments

0.01

Amortization of intangible assets

0.02

0.01

Levelized foreign currency

translation

Risk Management, as adjusted *

416

372

0.22

0.21

Corporate, as reported

(212)

(102)

(148)

(46)

(0.82)

(0.44)

Transaction-related costs

0.10

0.06

Legal, tax & benefit plan related

0.14

Clean energy related

(5)

(1)

(2)

Corporate, as adjusted *

(151)

(89)

(58)

(31)

(0.58)

(0.38)

Total Company, as reported

$ 3,586

$ 2,679

$ 154

$ 258

$ 710

$ 687

$ 0.58

$ 1.12

Total Company, as adjusted *

$ 3,565

$ 2,708

$ 620

$ 498

$ 1,047

$ 815

$ 2.38

$ 2.16

Total Brokerage & Risk

Management, as reported

$ 3,586

$ 2,665

$ 366

$ 360

$ 858

$ 733

$ 1.40

$ 1.56

Total Brokerage & Risk

Management, as adjusted *

$ 3,565

$ 2,699

$ 772

$ 587

$ 1,105

$ 846

$ 2.96

$ 2.54

For fourth quarter 2025, the pretax impact of the Brokerage segment adjustments totals $533 million, mostly due to non‑cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $136 million relating to these items. For fourth quarter 2025, the pretax impact of the Risk Management segment adjustments totals $12 million, with a corresponding adjustment to the provision for income taxes of $3 million relating to these items. For fourth quarter 2025, the pretax impact of the Corporate segment adjustments totals $90 million, with a corresponding adjustment to the benefit for income taxes of $29 million relating to these items. A detailed reconciliation of the 2025 and 2024 provision (benefit) for income taxes is shown on pages 14 and 15.

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"We had an excellent fourth quarter and a terrific 2025!" said J. Patrick Gallagher, Jr., Chairman and CEO.

"Our two-pronged revenue growth strategy, that's organic and M&A, drove double-digit top line growth for the 20th straight quarter. Fourth quarter revenue growth for our combined Brokerage and Risk Management segments was in excess of 30% and included organic revenue growth of 5%. Net earnings margin was 10.2%, adjusted EBITDAC margin was 30.8% and adjusted EBITDAC grew 30%.

"We finished 2025 with 21% growth in revenue, 6% organic growth, 26% growth in adjusted EBITDAC and completed 33 mergers with more than $3.5 billion in estimated annualized revenue. Another fantastic year.

"We have excellent momentum entering 2026 and our talented colleagues are executing on our value creation strategy. We are extremely excited about 2026 and believe we are just getting started!"

Summary of Financial Results - Year Ended December 31

Revenues Before

Diluted Net Earnings

Reimbursements

Net Earnings (Loss)

EBITDAC

(Loss) Per Share

Segment

Year 25

Year 24

Year 25

Year 24

Year 25

Year 24

Year 25

Year 24

(in millions)

Brokerage, as reported

$ 12,192

$ 9,934

$ 2,052

$ 1,686

$ 3,856

$ 3,069

$ 7.85

$ 7.46

Net (gains) on divestitures

(24)

(18)

(24)

(0.07)

(0.08)

Acquisition integration

194

143

257

191

0.73

0.63

Workforce and lease termination

136

183

118

0.53

0.39

Acquisition related adjustments

(26)

127

174

121

0.49

0.28

Amortization of intangible assets

668

486

2.57

2.16

Effective income tax rate impact

(7)

(0.03)

Levelized foreign currency

translation

0.04

Brokerage, as adjusted *

12,168

9,941

3,159

2,449

4,446

3,488

12.10

10.85

Risk Management, as reported

1,585

1,451

183

175

313

290

0.70

0.78

Net (gains) on divestitures

(2)

(1)

(2)

Acquisition integration

0.03

0.01

Workforce and lease termination

0.03

Acquisition related adjustments

0.01

Amortization of intangible assets

0.06

0.04

Levelized foreign currency

translation

(1)

Risk Management, as adjusted *

1,583

1,450

217

193

336

300

0.83

0.86

Corporate, as reported

(732)

(390)

(491)

(234)

(2.81)

(1.74)

Transaction-related costs

107

122

0.41

0.12

Legal, tax & benefit plan related

0.16

0.02

Clean energy-related

(5)

(2)

(0.01)

Corporate, as adjusted *

(583)

(363)

(291)

(204)

(2.24)

(1.61)

Total Company, as reported

$ 13,778

$ 11,401

$ 1,503

$ 1,471

$ 3,678

$ 3,125

$ 5.74

$ 6.50

Total Company, as adjusted *

$ 13,752

$ 11,402

$ 2,793

$ 2,279

$ 4,491

$ 3,584

$ 10.69

$ 10.10

Total Brokerage & Risk

Management, as reported

$ 13,777

$ 11,385

$ 2,235

$ 1,861

$ 4,169

$ 3,359

$ 8.55

$ 8.24

Total Brokerage & Risk

Management, as adjusted *

$ 13,751

$ 11,391

$ 3,376

$ 2,642

$ 4,782

$ 3,788

$ 12.93

$ 11.71

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For the year ended December 31, 2025, the pretax impact of the Brokerage segment adjustments totals $1,482 million, mostly due to non‑cash period expenses related to intangible amortization, with a corresponding adjustment to the provision for income taxes of $375 million relating to these items. For the year ended December 31, 2025, the pretax impact of the Risk Management segment adjustments totals $45 million, with a corresponding adjustment to the provision for income taxes of $11 million relating to these items. For the year ended December 31, 2025, the pretax impact of the Corporate segment adjustments totals $200 million, with a corresponding adjustment to the benefit for income taxes of $51 million relating to these items. A detailed reconciliation of the 2025 and 2024 provision (benefit) for income taxes is shown on pages 14 and 15.

Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

Organic Revenues (Non-GAAP)

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Base Commissions and Fees

Commissions and fees, as reported

$ 2,841

$ 2,024

$ 10,670

$ 8,887

Less commissions and fees from acquisitions, divested

operations and other

(882)

(171)

(1,598)

(351)

Levelized foreign currency translation

Organic base commissions and fees

$ 1,959

$ 1,875

$ 9,072

$ 8,584

Organic change in base commissions and fees

4 %

6 %

Supplemental Revenues

Supplemental revenues, as reported

$ 132

$ 98

$ 466

$ 359

Less supplemental revenues from acquisitions, divested

operations and other

(21)

(33)

Levelized foreign currency translation

Organic supplemental revenues

$ 111

$ 99

$ 433

$ 362

Organic change in supplemental revenues

12 %

20 %

Contingent Revenues

Contingent revenues, as reported

$ 83

$ 52

$ 324

$ 268

Less contingent revenues from acquisitions, divested

operations and other

(24)

(43)

Levelized foreign currency translation

Organic contingent revenues

$ 59

$ 53

$ 281

$ 269

Organic change in contingent revenues

11 %

5 %

Total reported commissions, fees, supplemental

revenues and contingent revenues

$ 3,056

$ 2,174

$ 11,460

$ 9,514

Less commissions, fees, supplemental revenues

and contingent revenues from acquisitions,

divested operations and other

(927)

(171)

(1,674)

(351)

Levelized foreign currency translation

Total organic commissions, fees, supplemental

revenues and contingent revenues

$ 2,129

$ 2,027

$ 9,786

$ 9,215

Total organic change

5 %

6 %

Acquisition Activity

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Number of acquisitions closed *

Estimated annualized revenues acquired (in millions)

$ 118

$ 189

$ 3,508

$ 363

In the fourth quarter of 2025 Gallagher issued 6,000 shares of its common stock directly to sellers in connection with tax-free exchange acquisitions. No shares were issued in fourth quarter 2024 in connection with tax-free exchange acquisitions.

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Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

Acquisition of AssuredPartners

As previously disclosed, on August 18, 2025, we acquired AssuredPartners for approximately $13.8 billion. We raised $8.5 billion of cash in our December 11, 2024 follow-on common stock offering and borrowed $5.0 billion of cash in our December 19, 2024 senior notes issuance (collectively, the AssuredPartners Financing) to fund the transaction. On January 7, 2025, we received an additional $1.3 billion of cash due to the exercise by the underwriters of the overallotment provision related to the follow-on common stock offering.

Compensation Expense and Ratios

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Compensation expense, as reported

$ 1,868

$ 1,291

$ 6,660

$ 5,502

Acquisition integration

(49)

(24)

(135)

(107)

Workforce and lease termination related charges

(103)

(27)

(171)

(108)

Acquisition related adjustments

(48)

(29)

(174)

(147)

Levelized foreign currency translation

Compensation expense, as adjusted

$ 1,668

$ 1,225

$ 6,180

$ 5,170

Reported compensation expense ratios using reported

revenues on pages 1 and 2

59.0 %

56.2 %

54.6 %

55.4 %

Adjusted compensation expense ratios using adjusted

revenues on pages 1 and 2

53.0 %

52.6 %

50.8 %

52.0 %

Reported fourth quarter 2025 compensation expense ratio was 2.8 pts higher than fourth quarter 2024. This ratio was primarily impacted by higher integration and workforce termination costs, as well as the impact of recent acquisitions and . lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

Adjusted fourth quarter 2025 compensation expense ratio was 0.4 pts higher than fourth quarter 2024. This ratio was primarily impacted by recent acquisitions as well as lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

Operating Expense and Ratios

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Operating expense, as reported

$ 527

$ 344

$ 1,676

$ 1,363

Acquisition integration

(57)

(15)

(122)

(84)

Workforce and lease termination related charges

(4)

(13)

(10)

Levelized foreign currency translation

Operating expense, as adjusted

$ 466

$ 333

$ 1,541

$ 1,283

Reported operating expense ratios using reported

revenues on pages 1 and 2

16.6 %

15.0 %

13.8 %

13.7 %

Adjusted operating expense ratios using adjusted

revenues on pages 1 and 2

14.8 %

14.3 %

12.7 %

12.9 %

Reported fourth quarter 2025 operating expense ratio was 1.6 pts higher than fourth quarter 2024. This ratio was primarily impacted by higher integration and technology costs, partially offset by savings in professional fees. This ratio was also impacted by lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

Adjusted fourth quarter 2025 operating expense ratio was 0.5 pts higher than fourth quarter 2024. This ratio was primarily impacted by increased technology costs, partially offset by savings in professional fees. This ratio was also impacted by lower interest income revenues in the quarter, as fourth quarter 2024 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.

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Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

Net Earnings to Adjusted EBITDAC (Non-GAAP)

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Net earnings, as reported

$ 317

$ 2,052

$ 1,686

Provision for income taxes

107

108

707

573

Depreciation

159

133

Amortization

298

163

894

651

Change in estimated acquisition earnout payables

EBITDAC

774

661

3,856

3,069

Net losses (gains) on divestitures

(20)

(24)

Acquisition integration

106

257

191

Workforce and lease termination related charges

107

183

118

Acquisition related adjustments

174

121

Levelized foreign currency translation

EBITDAC, as adjusted

$ 1,015

$ 769

$ 4,446

$ 3,488

Net earnings margin, as reported using reported

revenues on pages 1 and 2

10.0 %

13.8 %

16.8 %

17.0 %

EBITDAC margin, as adjusted using adjusted

revenues on pages 1 and 2

32.2 %

33.0 %

36.5 %

35.1 %

Fourth quarter 2024 adjusted EBITDAC margin includes approximately $20 million of interest income revenues earned on the proceeds received in December 2024 related to the AssuredPartners Financing. This interest income in the prior period, as well as the seasonality of AssuredPartners and the roll-in of tuck-in acquisitions, unfavorably impacted the year over year change in fourth quarter adjusted EBITDAC margin by approximately 1.3%.

Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

Organic Revenues (Non-GAAP)

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Fees

$ 403

$ 357

$ 1,538

$ 1,406

International performance bonus fees

Fees as reported

408

360

1,549

1,414

Less fees from acquisitions

(21)

(60)

Less divested operations

(2)

(9)

Levelized foreign currency translation

(1)

Organic fees

$ 387

$ 361

$ 1,489

$ 1,404

Organic change in fees

7 %

6 %

Acquisition Activity

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Number of acquisitions closed

Estimated annualized revenues acquired (in millions)

$ 16

$ 10

$ 54

$ 24

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Risk Management Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

Compensation Expense and Ratios

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Compensation expense, as reported

$ 255

$ 225

$ 974

$ 882

Acquisition integration

(1)

(3)

(2)

Workforce and lease termination related charges

(1)

(9)

(4)

Acquisition related adjustments

(2)

(4)

Levelized foreign currency translation

(2)

Compensation expense, as adjusted

$ 252

$ 224

$ 958

$ 874

Reported compensation expense ratios using reported

revenues (before reimbursements) on pages 1 and 2

61.2 %

61.0 %

61.5 %

60.8 %

Adjusted compensation expense ratios using adjusted

revenues (before reimbursements) on pages 1 and 2

60.6 %

60.2 %

60.5 %

60.3 %

Reported fourth quarter 2025 compensation expense ratio was 0.2 pts higher than fourth quarter 2024. Adjusted fourth quarter 2025 compensation ratio was 0.4 pts higher than fourth quarter 2024. Both ratios were primarily impacted by increased incentive compensation, partially offset by savings related to headcount controls.

Operating Expense and Ratios

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Operating expense, as reported

$ 78

$ 72

$ 298

$ 279

Acquisition integration

(3)

(1)

(6)

(1)

Workforce and lease termination related charges

(1)

(3)

Levelized foreign currency translation

Operating expense, as adjusted

$ 74

$ 71

$ 289

$ 276

Reported operating expense ratios using reported

revenues (before reimbursements) on pages 1 and 2

18.7 %

19.5 %

18.8 %

19.2 %

Adjusted operating expense ratios using reported

revenues (before reimbursements) on pages 1 and 2

17.8 %

19.1 %

18.3 %

19.0 %

Reported fourth quarter 2025 operating expense ratio was 0.8 pts lower than fourth quarter 2024. This ratio was primarily impacted by savings in client-related expenses and lower business insurance costs, partially offset by increased integration costs.

Adjusted fourth quarter 2025 operating expense ratio was 1.3 pts lower than fourth quarter 2024. This ratio was primarily impacted by savings in client-related expenses and lower business insurance costs.

Net Earnings to Adjusted EBITDAC (Non-GAAP)

4th Q 2025

4th Q 2024

Year 2025

Year 2024

Net earnings, as reported

$ 49

$ 43

$ 183

$ 175

Provision for income taxes

Depreciation

Amortization

Change in estimated acquisition earnout payables

EBITDAC

313

290

Net (gains) on divestitures

(1)

(2)

Acquisition integration

Workforce and lease termination related charges

Acquisition related adjustments

Levelized foreign currency translation

EBITDAC, as adjusted

$ 90

$ 77

$ 336

$ 300

Net earnings margin, as reported using reported

revenues (before reimbursements) on pages 1 and 2

11.8 %

11.7 %

11.6 %

12.1 %

EBITDAC margin, as adjusted using adjusted

revenues (before reimbursements) on pages 1 and 2

21.6 %

20.7 %

21.2 %

20.6 %

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Corporate Segment Reported GAAP to Adjusted Non-GAAP Reconciliation (dollars in millions):

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

2025

2024

Net Earnings

(Loss)

Income

Attributable to

Income

Attributable to

Pretax

Tax

Controlling

Pretax

Tax

Controlling

4th Quarter

Loss

Benefit

Interests

Loss

Benefit

Interests

Components of Corporate Segment, as reported

Interest and banking costs

$ (162)

$ 42

$ (120)

$ (94)

$ 24

$ (70)

Clean energy related

(2)

(1)

Acquisition costs (1)

(41)

(32)

(24)

(19)

Corporate (2)

(106)

(59)

(32)

(13)

Reported 4th Quarter

(311)

(212)

(150)

(102)

Adjustments

Clean energy related

(2)

Transaction-related costs (1)

(9)

(2)

Legal and tax related (3)

(9)

Benefit plan related (4)

(11)

Components of Corporate Segment, as adjusted

Interest and banking costs

(162)

(120)

(94)

(70)

Clean energy related

(2)

(1)

(2)

Acquisition costs

(5)

(7)

(4)

Corporate (2)

(52)

(25)

(32)

(13)

Adjusted 4th Quarter

$ (221)

$ 70

$ (151)

$ (135)

$ 46

$ (89)

Year Ended December 31,

Components of Corporate Segment, as reported

Interest and banking costs

$ (642)

$ 167

$ (475)

$ (376)

$ 97

$ (279)

Clean energy related

(8)

(5)

(6)

(5)

Acquisition costs (1)

(139)

(122)

(51)

(41)

Corporate (2)

(348)

218

(130)

(189)

124

(65)

Reported year

(1,137)

405

(732)

(622)

232

(390)

Adjustments

Clean energy related

(2)

Transaction-related costs (1)

122

(15)

107

(6)

Legal and tax related (3)

(25)

Benefit plan related (4)

(11)

Components of Corporate Segment, as adjusted

Interest and banking costs

(642)

167

(475)

(376)

(279)

Clean energy related

(8)

(5)

(8)

(7)

Acquisition costs

(17)

(15)

(19)

(15)

Corporate (2)

(270)

182

(88)

(189)

127

(62)

Adjusted Year

$ (937)

$ 354

$ (583)

$ (592)

$ 229

$ (363)

(1)

Gallagher incurred transaction-related costs, which include legal, consulting, employee compensation and other professional fees associated with completed, future and terminated acquisitions. Adjustments primarily relate to the acquisition of the Willis Towers Watson treaty reinsurance brokerage operations, the acquisitions of Buck, Cadence Insurance, Eastern Insurance Group, all of which closed in 2023, as well as Woodruff Sawyer and AssuredPartners, which closed in April 2025 and August 2025, respectively.

(2)

Corporate pretax loss includes a net unrealized foreign exchange remeasurement loss of $(4) million in fourth quarter 2025 and a net unrealized foreign exchange remeasurement gain of $16 million in fourth quarter 2024. Corporate pretax loss includes a net unrealized foreign exchange remeasurement loss of $(47) million in the year ended December 31, 2025 and a net unrealized foreign exchange remeasurement loss of zero in the year ended December 31, 2024.

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(3)

Adjustments in fourth quarter 2025 and 2024 include costs associated with legal and tax matters.

(4)

Adjustments in fourth quarter 2025 include costs associated with the termination of the Gallagher US defined pension plan and other benefit plan changes.

Interest and banking costs and debt - At December 31, 2025, Gallagher had $9,550 million of borrowings from public debt, $3,323 million of borrowings from private placements and no borrowings under its line of credit facility. In addition, Gallagher had $226 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. Interest and banking costs in fourth quarter 2025 are higher than the same period in 2024 primarily due to the debt issuances that occurred in December 2024.

Clean energy related - For 2025, 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 rate for the quarters ended December 31, 2025 and 2024 were 14.3% and 22.5%, respectively. Gallagher's consolidated effective tax rate for the year ended December 31, 2025 and 2024 were 19.7% and 21.5%, respectively

Webcast Conference Call - Gallagher will host a webcast conference call on Thursday, January 29, 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.

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.

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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; geo-economic fragmentation and protectionism such as tariffs, trade wars or similar governmental actions affecting the flows of goods, services or currency; a U.S. government shutdown; political violence and instability, such as the armed conflicts in Ukraine the Middle East, Latin America and the Caribbean; its actual acquisition opportunities, including closing risks related to pending acquisitions, risks with respect to larger acquisitions such as AssuredPartners, the largest acquisition in our history, including risks related to its ability to successfully integrate operations, the possibility that its assumptions may be inaccurate resulting in unforeseen obligations or liabilities and failure to realize the expected benefits of these 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 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; 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 or man-made natural 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, 2024 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.

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 14 and 15 for a reconciliation of the adjustments made to income taxes.

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Non-GAAP Earnings Measures

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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 period 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 12 and 13), 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).

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Arthur J. Gallagher & Co.

Reported Statement of Earnings and EBITDAC - 4th Quarter December 31,

(Unaudited - in millions except per share, percentage and workforce data)

4th Q Ended

Year Ended

Brokerage Segment

Dec 31, 2025

Dec 31, 2024

Dec 31, 2025

Dec 31, 2024

Commissions

$ 2,059

$ 1,501

$ 8,024

$ 6,694

Fees

782

523

2,646

2,193

Supplemental revenues

132

466

359

Contingent revenues

324

268

Interest income, premium finance revenues and other income

113

122

732

420

Total revenues

3,169

2,296

12,192

9,934

Compensation

1,868

1,291

6,660

5,502

Operating

527

344

1,676

1,363

Depreciation

159

133

Amortization

298

163

894

651

Change in estimated acquisition earnout payables

Expenses

2,745

1,871

9,433

7,675

Earnings before income taxes

424

425

2,759

2,259

Provision for income taxes

107

108

707

573

Net earnings

317

2,052

1,686

Net earnings attributable to noncontrolling interests

Net earnings attributable to controlling interests

$ 314

$ 317

$ 2,043

$ 1,678

EBITDAC

Net earnings

$ 317

$ 2,052

$ 1,686

Provision for income taxes

107

108

707

573

Depreciation

159

133

Amortization

298

163

894

651

Change in estimated acquisition earnout payables

EBITDAC

$ 774

$ 661

$ 3,856

$ 3,069

4th Q Ended

Year Ended

Risk Management Segment

Dec 31, 2025

Dec 31, 2024

Dec 31, 2025

Dec 31, 2024

Fees

$ 408

$ 360

$ 1,549

$ 1,414

Interest income and other income

Revenues before reimbursements

417

369

1,585

1,451

Reimbursements

164

154

Total revenues

459

405

1,749

1,605

Compensation

255

225

974

882

Operating

298

279

Reimbursements

164

154

Depreciation

Amortization

Change in estimated acquisition earnout payables

Expenses

392

347

1,500

1,367

Earnings before income taxes

249

238

Provision for income taxes

Net earnings

183

175

Net earnings attributable to noncontrolling interests

Net earnings attributable to controlling interests

$ 49

$ 43

$ 183

$ 175

EBITDAC

Net earnings

$ 49

$ 43

$ 183

$ 175

Provision for income taxes

Depreciation

Amortization

Change in estimated acquisition earnout payables

EBITDAC

$ 84

$ 72

$ 313

$ 290

See "Information Regarding Non-GAAP Measures" beginning on page 9 of 15.

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Arthur J. Gallagher & Co.

Reported Statement of Earnings and EBITDAC - 4th Quarter December 31,

(Unaudited - in millions except share and per share data)

4th Q Ended

Year Ended

Corporate Segment

Dec 31, 2025

Dec 31, 2024

Dec 31, 2025

Dec 31, 2024

Other income

$ -

$ 14

$ 1

$ 16

Total revenues

Compensation

208

138

Operating

284

112

Interest

161

102

639

381

Depreciation

Expenses

311

164

1,138

638

Loss before income taxes

(311)

(150)

(1,137)

(622)

Benefit for income taxes

(99)

(48)

(405)

(232)

Net loss

(212)

(102)

(732)

(390)

Net loss attributable to noncontrolling interests

Net loss attributable to controlling interests

$ (212)

$ (102)

$ (732)

$ (390)

EBITDAC

Net loss

$ (212)

$ (102)

$ (732)

$ (390)

Benefit for income taxes

(99)

(48)

(405)

(232)

Interest

161

102

639

381

Depreciation

EBITDAC

$ 148)

$ 46)

$ (491)

$ 234)

4th Q Ended

Year Ended

Total Company

Dec 31, 2025

Dec 31, 2024

Dec 31, 2025

Dec 31, 2024

Commissions

$ 2,059

$ 1,501

$ 8,024

$ 6,694

Fees

1,190

883

4,195

3,607

Supplemental revenues

132

466

359

Contingent revenues

324

268

Interest income, premium finance revenues and other income

122

145

769

473

Revenues before reimbursements

3,586

2,679

13,778

11,401

Reimbursements

164

154

Total revenues

3,628

2,715

13,942

11,555

Compensation

2,209

1,554

7,842

6,522

Operating

667

438

2,258

1,754

Reimbursements

164

154

Interest

161

102

639

381

Depreciation

206

178

Amortization

304

167

916

665

Change in estimated acquisition earnout payables

Expenses

3,448

2,382

12,071

9,680

Earnings before income taxes

180

333

1,871

1,875

Provision for income taxes

368

404

Net earnings

154

258

1,503

1,471

Net earnings attributable to noncontrolling interests

Net earnings attributable to controlling interests

$ 151

$ 258

$ 1,494

$ 1,463

Diluted net earnings per share

$ 0.58

$ 1.12

$ 5.74

$ 6.50

Dividends declared per share

$ 0.65

$ 0.60

$ 2.60

$ 2.40

EBITDAC

Net earnings

$ 154

$ 258

$ 1,503

$ 1,471

Provision for income taxes

368

404

Interest

161

102

639

381

Depreciation

206

178

Amortization

304

167

916

665

Change in estimated acquisition earnout payables

EBITDAC

$ 710

$ 687

$ 3,678

$ 3,125

See "Information Regarding Non-GAAP Measures" beginning on page 9 of 15.

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Arthur J. Gallagher & Co.

Consolidated Balance Sheet

(Unaudited - in millions except per share data)

Dec 31, 2025

Dec 31, 2024

Cash and cash equivalents

$ 1,396

$ 14,987

Fiduciary assets (includes fiduciary cash of $7,142 in 2025 and $5,481 in 2024)

26,899

24,712

Accounts receivable, net

5,175

3,896

Other current assets

886

518

Total current assets

34,356

44,113

Fixed assets - net

789

650

Deferred income taxes (includes tax credit carryforwards of $772 in 2024)

959

Other noncurrent assets

1,602

1,355

Right-of-use assets

598

378

Goodwill

22,593

12,270

Amortizable intangible assets - net

10,684

4,530

Total assets

$ 70,665

$ 64,255

Fiduciary liabilities

$ 26,899

$ 24,712

Accrued compensation and other current liabilities

4,017

3,586

Deferred revenue - current

737

537

Premium financing debt

226

225

Corporate related borrowings - current

640

200

Total current liabilities

32,519

29,260

Corporate related borrowings - noncurrent

12,104

12,732

Deferred revenue - noncurrent

155

Lease liabilities - noncurrent

515

328

Other noncurrent liabilities (includes tax credit carryforwards of $713 in 2025)

2,025

1,688

Total liabilities

47,318

44,075

Stockholders' equity:

Common stock - issued and outstanding

257

250

Capital in excess of par value

17,783

16,069

Retained earnings

5,806

4,986

Accumulated other comprehensive loss

(525)

(1,151)

Total controlling interests stockholders' equity

23,321

20,154

Noncontrolling interests

Total stockholders' equity

23,347

20,180

Total liabilities and stockholders' equity

$ 70,665

$ 64,255

Arthur J. Gallagher & Co.

Other Information

(Unaudited - data is rounded where indicated)

4th Q Ended

Year Ended

OTHER INFORMATION

Dec 31, 2025

Dec 31, 2024

Dec 31, 2025

Dec 31, 2024

Basic weighted average shares outstanding (000s)

256,901

226,425

256,150

220,502

Diluted weighted average shares outstanding (000s)

260,258

231,059

260,134

224,966

Number of common shares outstanding at end of period (000s)

256,976

249,999

Workforce at end of period (includes acquisitions):

Brokerage

55,561

42,091

Risk Management

10,889

10,339

Total Company

71,776

55,977

* Gallagher completed a follow on public offering of 30,357,143 shares of its common stock on December 11, 2024 and 4,553,571 shares of its common stock

on January 7, 2025, to fund a portion of the acquisition of AssuredPartners.

** The acquisition of AssuredPartners added approximately 10,900 employees in August 2025.

Reconciliation of Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per Share (Unaudited)

(Unaudited - in millions except share and per share data)

Net Earnings

Earnings

Provision

(Loss)

Diluted Net

(Loss)

(Benefit)

Attributable to

Earnings

Before Income

for Income

Net Earnings

Noncontrolling

Controlling

(Loss)

Taxes

(Loss)

Interests

per Share

4th Q Ended December 31, 2025

Brokerage, as reported

$ 424

$ 107

$ 317

$ 3

$ 314

$ 1.21

Net (gains) on divestitures

(20)

(5)

(15)

(0.06)

Acquisition integration

106

0.30

Workforce and lease termination

106

0.31

Acquisition related adjustments

0.12

Amortization of intangible assets

298

223

0.86

Brokerage, as adjusted

$ 957

$ 243

$ 714

$ 3

$ 711

$ 2.74

Risk Management, as reported

$ 67

$ 18

$ 49

$ -

$ 49

$ 0.19

Net (gains) on divestitures

(1)

Acquisition integration

Workforce and lease termination

Acquisition related adjustments

0.01

Amortization of intangible assets

0.02

Risk Management, as adjusted

$ 79

$ 21

$ 58

$ -

$ 58

$ 0.22

Corporate, as reported

$ (311)

$ (99)

$ (212)

$ -

$ (212)

$ (0.82)

Transaction-related costs

0.10

Legal, tax and benefit plan related

0.14

Corporate, as adjusted

$ (221)

$ (70)

$ (151)

$ -

$ (151)

$ (0.58)

See "Information Regarding Non-GAAP Measures" beginning on page 9 of 15.

(14 of 15)

Reconciliation of Non-GAAP Measures - Pre-tax Earnings and Diluted Net Earnings per Share (Unaudited) - Continued

(Unaudited - in millions except share and per share data)

Net Earnings

Earnings

Provision

(Loss)

Diluted Net

(Loss)

(Benefit)

Attributable to

Earnings

Before Income

for Income

Net Earnings

Noncontrolling

Controlling

(Loss)

Taxes

(Loss)

Interests

per Share

4th Q Ended December 31, 2024

Brokerage, as reported

$ 425

$ 108

$ 317

$ -

$ 317

$ 1.37

Net losses on divestitures

Acquisition integration

0.13

Workforce and lease termination

0.10

Acquisition related adjustments

0.17

Amortization of intangible assets

163

121

0.53

Effective income tax rate impact

(1)

0.01

Levelized foreign currency translation

0.02

Brokerage, as adjusted

$ 719

$ 182

$ 537

$ -

$ 537

$ 2.33

Risk Management, as reported

$ 58

$ 15

$ 43

$ -

$ 43

$ 0.19

Acquisition integration

Workforce and lease termination

0.01

Acquisition related adjustments

Amortization of intangible assets

0.01

Levelized foreign currency translation

Risk Management, as adjusted

$ 68

$ 18

$ 50

$ -

$ 50

$ 0.21

Corporate, as reported

$ (150)

$ (48)

$ (102)

$ -

$ (102)

$ (0.44)

Transaction-related costs

0.06

Clean energy-related

(2)

(1)

Corporate, as adjusted

$ (135)

$ (46)

$ (89)

$ -

$ (89)

$ (0.38)

Net Earnings

Earnings

(Loss)

Diluted Net

(Loss)

(Benefit)

Attributable to

Earnings

Before Income

for Income

Net Earnings

Noncontrolling

Controlling

(Loss)

Taxes

(Loss)

Interests

per Share

Year Ended December 31, 2025

Brokerage, as reported

$ 2,759

$ 707

$ 2,052

$ 9

$ 2,043

$ 7.85

Net (gains) on divestitures

(24)

(6)

(18)

(0.07)

Acquisition integration

257

194

0.73

Workforce and lease termination

183

136

0.53

Acquisition related adjustments

172

127

0.49

Amortization of intangible assets

894

226

668

2.57

Brokerage, as adjusted

$ 4,241

$ 1,082

$ 3,159

$ 9

$ 3,150

$ 12.10

Risk Management, as reported

$ 249

$ 66

$ 183

$ -

$ 183

$ 0.70

Net (gains) on divestitures

(2)

(1)

Acquisition integration

0.03

Workforce and lease termination

0.03

Acquisition related adjustments

0.01

Amortization of intangible assets

0.06

Risk Management, as adjusted

$ 294

$ 77

$ 217

$ -

$ 217

$ 0.83

Corporate, as reported

$ (1,137)

$ (405)

$ (732)

$ -

$ (732)

$ (2.81)

Transaction-related costs

122

107

0.41

Legal, tax and benefit plan related

0.16

Corporate, as adjusted

$ (937)

$ (354)

$ (583)

$ -

$ (583)

$ (2.24)

Net Earnings

Earnings

Provision

(Loss)

Diluted Net

(Loss)

(Benefit)

Attributable to

Earnings

Before Income

for Income

Net Earnings

Noncontrolling

Controlling

(Loss)

Taxes

(Loss)

Interests

per Share

Year Ended December 31, 2024

Brokerage, as reported

$ 2,259

$ 573

$ 1,686

$ 8

$ 1,678

$ 7.46

Net (gains) on divestitures

(24)

(6)

(18)

(0.08)

Acquisition integration

191

143

0.63

Workforce and lease termination

118

0.39

Acquisition related adjustments

(3)

0.28

Amortization of intangible assets

651

165

486

2.16

Effective income tax rate impact

(7)

(0.03)

Levelized foreign currency translation

0.04

Brokerage, as adjusted

$ 3,293

$ 844

$ 2,449

$ 5

$ 2,444

$ 10.85

Risk Management, as reported

$ 238

$ 63

$ 175

$ -

$ 175

$ 0.78

Acquisition integration

0.01

Workforce and lease termination

0.03

Amortization of intangible assets

0.04

Risk Management, as adjusted

$ 263

$ 70

$ 193

$ -

$ 193

$ 0.86

Corporate, as reported

$ (622)

$ (232)

$ (390)

$ -

$ (390)

$ (1.74)

Transaction-related costs

0.12

Legal and tax related

(3)

0.02

Clean energy-related

(2)

(0.01)

Corporate, as adjusted

$ (592)

$ (229)

$ (363)

$ -

$ (363)

$ (1.61)

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

Contact:

Ray Iardella

Vice President - Investor Relations

630-285-3661 or [email protected]

(15 of 15)

See "Information Regarding Non-GAAP Measures" on page 9 of 15.

SOURCE Arthur J. Gallagher & Co.