Aon Q2 Earnings Surpass Estimates on Solid Retention Rates

Aon plc AON reported second-quarter 2025 adjusted earnings of $3.49 per share, which beat the Zacks Consensus Estimate by 2.7%. The bottom line increased 19.1% from the year-ago period.

Total revenues rose 11% year over year to $4.2 billion. The top line surpassed the consensus mark by 0.7%. Organic revenue growth was 6%.

The strong quarterly results benefited from new business growth and solid retention rates in Aon’s solution lines. Its Risk Capital and Human Capital segments gained from organic revenue growth, NFP acquisition synergies and net restructuring savings. However, the upside was partially offset by escalating operating costs.

Aon plc Price, Consensus and EPS Surprise

 

Aon plc price-consensus-eps-surprise-chart | Aon plc Quote

AON’s Q2 Operations

Total operating expenses of $3.3 billion increased 6% year over year due to higher ongoing operating costs of NFP (an Aon-acquired company), higher expenses related to 6% organic revenue growth, increased intangible asset amortization from the NFP acquisition, and long-term growth investments. The metric was marginally higher than our estimate.

Adjusted operating income advanced 14% year over year to $1.2 billion and was in line with our estimate. The metric gained on the back of benefits reaped from the NFP acquisition, organic revenue growth and net restructuring savings. However, the adjusted operating margin of 28.2% improved 80 basis points year over year.

Q2 Segmental Performance

Risk Capital

Commercial Risk Solutions: Organic revenues grew 6% year over year in the second quarter, attributable to strength in core P&C operations, international growth and strong retentions. Revenues in this solution line were $2.2 billion, which advanced 8% year over year and was in line with the Zacks Consensus Estimate.

Reinsurance Solutions: Organic revenues improved 6% year over year on the back of a well-performing treaty business, higher facultative placements, strong retention and new business. Revenues increased 8% year over year to $688 million, which surpassed the consensus mark of $665 million.

Human Capital

Health Solutions: Organic revenues grew 6% year over year as a result of global expansion in the core health and benefits business. The solution line’s revenues of $772 million climbed 17% year over year and beat the Zacks Consensus Estimate of $749.7 million.

Wealth Solutions: Organic revenues improved 3% year over year in the second quarter on the back of a strong Retirement business, which received an impetus from sustained advisory demand related to the impact of regulatory changes. Revenues grew 12% year over year to $519 million due to growth in NFP. But the metric missed the consensus mark of $549.5 million.

AON’s Financial Position (As of June 30, 2025)

Aon exited the second quarter with cash and cash equivalents of $1 million, which fell from the 2024-end level of $1.1 billion. Total assets of $54 billion increased from the $49 billion figure at 2024-end.

Long-term debt amounted to $15.5 billion, which fell from the 2024-end level of $16.3 billion. Short-term debt and the current portion of long-term debt totaled $1.8 billion.

Aon generated cash flow from operations of $796 million, which rose from $513 million a year ago. Adjusted free cash flows grew 59% year over year to $732 million.

Aon’s Capital Deployment Update

Aon bought back 0.7 million class A ordinary shares for roughly $250 million in the second quarter. A leftover capacity of around $1.8 billion remained under its repurchase authorization as of June 30, 2025.

AON’s Forward View Reaffirmed

Revenues are expected to register mid-single-digit or higher organic growth for 2025 and beyond. The company expects the adjusted operating margin to expand in 2025. It also estimates adjusted EPS to witness strong growth this year. Free cash flow is projected to witness double-digit growth in the long term.

The Aon United Restructuring program is likely to enable the company to achieve total annual run-rate savings of approximately $350 million by the end of 2026. It was earlier projected to achieve $260 million in cumulative annual savings in 2025.

AON’s Zacks Rank & Key Picks

AON currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader finance space are Virtu Financial Inc VIRT, Marex Group PLC MRX and Acadian Asset Management Inc. AAMI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Virtu Financial’s current-year earnings of $4.39 per share has witnessed four upward revisions in the past 30 days against none in the opposite direction. Virtu Financial beat earnings estimates in each of the trailing four quarters, with the average surprise being 20.2%. The consensus estimate for current-year revenues is pegged at $1.8 billion, implying 13.8% year-over-year growth.

The Zacks Consensus Estimate for Marex Group’s current-year earnings of $3.52 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. Marex Group beat earnings estimates in each of the trailing four quarters, with the average surprise being 26.3%. The consensus estimate for current-year revenues is pegged at $1.8 billion, calling for 12.4% year-over-year growth.

The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.18 per share, implying 15.2% year-over-year growth. In the past 30 days, Acadian Asset Management has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $560.8 million, calling for 10.9% year-over-year growth.

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