Dublin, October 28th / PRNewswire / -- Aon plc (New York Stock Exchange ticker: AON) announced its quarterly results for the period ending September 30, 2026, today.
The company stated:
- Yi'an achieved another quarter of solid performance, with total revenue growing by 3%, organic revenue increasing by 6%, and earnings per share rising as well. The results show that all business lines generally strengthened, among which the commercial risk business saw an organic revenue growth of 7%, the reinsurance business grew by 7%, the health business increased by 6%, and the wealth business grew by 4%.
- The company's strict capital allocation framework benefits from strong free cash flow. The company expects the acquisition of USI to be completed in the fourth quarter of 2026, and it will prioritize debt repayment with the goal of reducing the leverage ratio to between 2.8 and 3.0 times within about 24 months.
- Entering the fourth quarter, the company maintained significant momentum, which enhanced its confidence in achieving strong financial performance for the entire year of 2026.
Aon, President and CEO, stated: "Our Aon United strategy continues to advance, further strengthening the differentiated platform we provide for our customers. As we enter the final year of the 3x3 plan, our investments in AI-driven analytics, innovation capabilities, capital solutions, and top experts are helping customers to manage risks, enhance resilience, and achieve better results. At the same time, with the announcement of our acquisition of USI, we are bolstering our situational advantages and expanding our ability to serve customers across a broader market, while also creating new opportunities through a variety of traditional and alternative capital sources."
Case added, "The impact of this strategy is also reflected in our strong third-quarter performance, which is characterized by a 6% organic revenue growth, an expansion in adjusted profit margin of 70 basis points, and a 10% increase in adjusted earnings per share. We enter the fourth quarter with significant momentum, which further enhances our confidence in continuing to achieve differentiated and strong results."
In the third quarter, the net profit attributable to Aon shareholders increased by 6% year-over-year, amounting to $2.23 per share after dilution, compared to $2.11 per share in the same period last year. The adjusted net profit attributable to Aon shareholders grew by 10% to $3.36 per share after dilution, which includes a favorable impact of $0.02 due to the conversion of last year's figures at current exchange rates; last year, it was $3.05 per share. For details on the factors that affected the third-quarter results and the comparisons with the same period last year, please refer to pages 11 and 12 of this press release under "Non-GAAP Indicator Adjustments – Operating Profit and Operating Margin (Unaudited)" and "Non-GAAP Indicator Adjustments – Diluted Earnings Per Share (Unaudited)," respectively.
2026 Third Quarter Financial Summary
Total revenue for the third quarter increased by 3% year-over-year to $4.1 billion, reflecting a 6% organic revenue growth, but this was partially offset by an adverse 3% impact mainly due to asset divestitures. Revenue from the venture capital business increased by $157 million, or 6%, to $2.7 billion; revenue from the human capital business decreased by $54 million, or 4%, to $1.4 billion.
Total operating expenses in the third quarter increased by 3% year-over-year to $3.3 billion, mainly due to increased expenses related to a 6% growth in organic revenue, long-term growth investments, and rising costs associated with the "accelerate Aon United" initiative. However, this increase was partially offset by reduced expenses from the sale of NFP's wealth management business and net savings from reorganizations amounting to $20 million. Operating expenses for the venture capital business increased by $134 million, representing a 7% rise; while operating expenses for the human capital business decreased by $68 million, a 6% decline.
In the third quarter, foreign exchange conversions had a favorable impact of $0.02 on both diluted earnings per share and adjusted earnings per share. If exchange rates remain at the current level, the company expects that the impact on adjusted earnings per share in the fourth quarter of 2026 will be negligible, while the favorable impact for the entire year of 2026 is approximately $0.42 per share.
The effective tax rate for the third quarter was 20.6%, compared to 21.3% in the same period of the previous year. After excluding the applicable tax impacts related to several non-GAAP adjustments, the adjusted effective tax rate for the third quarter of 2026 was 20.2%, while it was 19.2% in the same period of the previous year. The main drivers of changes in the effective tax rate were variations in the geographical distribution of revenue and the greater net adverse effects brought about by discrete items. The main drivers of changes in the adjusted effective tax rate once again were variations in the geographical distribution of revenue and the net adverse effects from discrete items.
The weighted average diluted number of shares in the third quarter decreased to 213 million shares, compared to 216.7 million shares in the same period of the previous year. The company did not repurchase any shares in the third quarter. As of September 30, 2026, there is still an authorized amount of approximately $7.7 billion under the company's share repurchase plan.
Cash Flow Summary from the Beginning of 2026 to Present
In the first nine months of 2026, cash flow from operating activities increased by $93 million year-on-year, representing a 4% growth to $2.2 billion. This increase was due to a strong growth in adjusted operating profits, which offset the impact of working capital and transaction costs related to USI.
Free cash flow is defined as operating cash flow minus capital expenditures. In the first nine months of 2026, it increased by 3% to $1.9 billion year-over-year, reflecting an increase in operating cash flow, but this increase was partially offset by a rise in capital expenditures of $45 million.
2026 Third Quarter Revenue Review
The following third-quarter revenue review includes supplementary information related to organic revenue growth. Organic revenue growth is a non-GAAP indicator; for detailed explanations, please refer to page 10 of this press release, "Non-GAAP Indicator Adjustment – Organic Revenue Growth and Free Cash Flow."
Total revenue increased by $104 million year-over-year, a growth of 3%, reflecting an organic revenue growth of 6%, mainly driven by new business and continued strong customer retention. However, this was partially offset by an adverse impact of 3% mainly due to the NFP wealth business and the sale of Stroz Friedberg. Revenue from the venture capital business increased by $157 million, a growth of 6%; revenue from the human capital business decreased by $54 million, a decline of 4%.
Venture Capital
Commercial risk solutions achieved a 7% organic revenue growth, reflecting strong performance in North America and the EMEA region, driven mainly by new business additions and continued strong customer retention. The net market impact was slightly positive. In North America, key performance highlights included strong growth in merger and acquisition services, as well as in the core property and accident insurance businesses in the United States, in addition to growth in the construction business.
Reinsurance solutions achieved a 7% organic revenue growth, reflecting strong growth in treaty reinsurance business, mainly driven by new business and strong retention, as well as the favorable impact of the reversal of revenue constraints from previous periods. The net market impact this quarter was unfavorable.
Human Capital
Organic revenue of health solutions grew by 6%, reflecting strong growth in the core health and wellness business, especially with outstanding performance in the international segment, driven mainly by new business additions and sustained strong customer retention; talent solutions were driven by the growth of the talent analytics business. The net market impact was slightly positive.
Wealth solutions achieved a 4% organic revenue growth, reflecting strong growth in the retirement business, mainly supported by the consulting demand in the UK and EMEA regions due to ongoing regulatory changes.
2026 Third Quarter Expense Review
Salaries and benefits expenses increased by $16 million year-over-year, a 1% increase, mainly due to rising expenses related to a 6% organic revenue growth as well as long-term growth investments. However, this increase was partially offset by reduced expenses from the sale of the NFP wealth business and savings from the "accelerated Aon United" restructuring efforts.
Information technology expenses increased by $16 million year-on-year, a growth of 11%, mainly due to the investment in ongoing technical projects by Aon Business Services.
Venue expenses have decreased by $2 million year-on-year, a reduction of 2%. The reason is that the company continues to optimize its real estate layout and has confirmed the savings resulting from the accelerated reorganization efforts of “Aon United”.
Fixed asset depreciation increased by $2 million year-on-year, representing a growth of 4%.
Amortization and impairment of intangible assets decreased by $18 million year-on-year, a reduction of 9%, mainly due to the decrease in intangible assets related to the sale of the NFP wealth business.
Other general expenses increased by $36 million year-on-year, representing a growth of 8%, mainly due to a legal settlement-related recovery in the same period last year, as well as transaction costs related to USI.
The cost of accelerating the Aon United reorganization plan increased by $61 million year-on-year, representing a 191% increase, mainly due to costs related to personnel optimization.
2026 Third Quarter Profit Summary
Several important factors affected the adjusted operating profit and adjusted operating margin for the third quarter of 2026 and 2025. For more details, please refer to pages 11 and 12 of this press release under "Non-GAAP Indicator Adjustments – Operating Profit and Operating Margin (Unaudited)" and "Non-GAAP Indicator Adjustments – Diluted Earnings Per Share (Unaudited)", respectively.
Operating profit decreased by $7 million year-on-year, a decline of 1%; the operating margin fell by 70 basis points to 19.7%. After adjustment, operating profit increased by $55 million year-on-year, a growth of 5%; the adjusted operating margin rose by 70 basis points to 27.0%. The growth in adjusted operating profit reflects organic revenue growth, improved scale effects of Aon Business Services, and net restructuring savings, but this was partially offset by increased investment.
Interest income increased by $24 million year-on-year, mainly reflecting the rise in cash balances due to net proceeds from debt issuance. Interest expenses remained the same as in the same period of the previous year. For most of the quarter, the average debt balance was low, but at the end of the quarter, interest expenses incurred from debt issued for the USI acquisition financing offset this effect.
Other expenses and adjusted other expenses amounted to 15 million US dollars, compared to 13 million US dollars in the same period last year, mainly due to the adverse impact of exchange rates on the revaluation of non-functional currency assets and liabilities.
The net profit attributable to the shareholders of Aon increased by 4% year-on-year to $476 million, compared to $458 million in the same period last year. The adjusted net profit attributable to the shareholders of Aon increased by 8% year-on-year to $715 million, compared to $660 million in the same period last year.
Details of teleconferences, presentation slides, and webcasts
The company will hold a teleconference at 8:30 a.m. Eastern Time on October 28, 2026. Interested parties can listen to the teleconference via live audio streaming and view the presentation slides at ir.aon.com.
About Aon
Aon plc (New York Stock Exchange ticker: AON) is committed to helping people make better decisions to protect and improve lives around the world. With actionable analytical insights, globally integrated venture capital and human capital expertise, as well as solutions tailored to local needs, our colleagues provide clarity and confidence to customers in over 120 countries, assisting them in making better risk and talent decisions to protect and grow their businesses.
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Safe Harbor Statement
This communication contains certain statements related to future performance, or statements regarding Aon's intentions, beliefs, expectations, or forecasts for the future, which are considered forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and may result in significant differences between actual outcomes and historical or anticipated results, depending on a number of factors. Such forward-looking statements include information regarding the possible or assumed future results of Aon's operations. Apart from statements of historical facts, any statements that involve Aon's expectations or anticipated future activities, events, or developments, including our outlooks, market and industry conditions (including competitive and pricing trends), the development and performance of services and products, cost structures, and the results of cost reduction or restructuring measures (including the impact of the "Accelerate Aon United" plan), pending USI acquisitions, actual or anticipated legal settlement costs, future capital expenditures, growth in commissions and fees, changes in revenue composition or levels, cash flow and liquidity, expected tax rates, expected effects of foreign exchange conversions, business strategies, competitive advantages, targets, benefits brought by new initiatives, business and operational growth, statements regarding future success, and expectations for the benefits of USI acquisitions, are all considered forward-looking statements.When using expressions such as “anticipate (expected)”, “believe (believed)”, “continue (continuous)”, “confidence (confidence)”, “could (possible)”, “estimate (estimated)”, “expect (predicted)”, “forecast (forecast)”, “intend (intended)”, “looking forward (outlook)”, “may (possible)”, “might (perhaps)”, “plan (plan)”, “potential (potential)”, “opportunity (opportunity)”, “commit (commitment)”, “probably (probably)”, “project (expected)”, “positioned (in a favorable position)”, “should (should)”, “will (will)”, “would (will)” etc., it is also making forward-looking statements.
The following factors, among others, may result in actual outcomes differing from those stated or anticipated in the forward-looking statements: changes in the competitive environment due to macroeconomic conditions or other reasons, or damage to the reputation of Aon; fluctuations in exchange rates, interest rates, or inflation rates that may affect our financial condition or performance; changes in global stock and fixed-income markets that may impact the returns on investment assets; changes in the funding status of various defined pension plans under Aon, and the resulting additional pension contributions; the level of debt and its terms, which may reduce the flexibility of Aon or increase borrowing costs; actions by rating agencies that may limit Aon's ability to obtain capital and affect its competitive position; global tax rates, which are influenced by various factors, including the application of the second-pillar tax system for OECD in Ireland, the United Kingdom, Singapore, and many EU member states, as well as other pending proposals in these and other countries, all of which may cause tax rate fluctuations; changes in accounting estimates or assumptions; limitations on the ability of subsidiaries to pay dividends or other payments to Aon; the impact of legal proceedings and other contingent matters, including those related to acquisitions or sales transactions, errors and omissions, and other claims against Aon.Procedures and contingent matters related to the arrangement of capital transactions, or procedures and contingent matters related to actions taken on behalf of clients in investment business or other consulting services provided currently or in the future); the impact and potential challenges faced by Aon in complying with laws and regulations within its jurisdiction of operation, particularly considering the global nature of Aon's business, as well as possible differences or conflicts in laws and regulations across different jurisdictions, or differences in their application and interpretation, including but not limited to areas such as cybersecurity, data privacy, and artificial intelligence; the impact of any regulatory investigations initiated by Ireland, the United Kingdom, the United States, or other countries; failure to protect intellectual property rights or being accused of infringing upon the intellectual property rights of others; the general economic and political conditions in the different countries where Aon operates globally; failure to retain, attract, and cultivate experienced and qualified talent; international risks related to global business, including geopolitical conflicts, tariffs, sanctions, or changes in trade policies; the impact of natural or man-made disasters, including public health pandemics and climate-related events; any system or network interruptions or security vulnerabilities that lead to operational disruptions or improper disclosure of confidential, personal, or proprietary data, resulting in liability or damage to reputation; the ability to develop, implement, update, and enhance new technologies; the behavior of third parties in undertaking certain functions in the operation of Aon's business and customer service; the ability to continuously develop, integrate acquired businesses, and enter into new business lines or product lines, as well as the associated costs and risks; the ability to obtain regulatory approval and complete transactions, as well as the costs and risks associated with failing to complete proposed transactions; changes in the commercial real estate and accident insurance markets, commercial premium rates, or commission structures; the ability to develop and implement innovative growth strategies and initiatives aimed at cost savings (including the "Accelerate Aon United" program), as well as the ability to achieve such growth or savings;The impact of Irish law on the operational flexibility of Aon and on the enforcement of the judgment regarding Aon; any circumstances that may lead to an adverse effect on the market price of Aon securities and/or operational performance, due to reasons including the failure to achieve the expected benefits from the USI acquisition within the anticipated time frame or the complete failure to realize such benefits (including expected revenue and synergistic growth effects), or due to significant transaction and integration costs or difficulties, or unknown or immeasurable liabilities; as well as the potential impacts on relationships with suppliers, customers, employees, and regulatory authorities after the completion of the USI acquisition.
Any or all forward-looking statements regarding Aon may be inaccurate, and there is no guarantee regarding the performance of Aon. The aforementioned factors are not exhaustive. Aon and its subsidiaries operate in a dynamic business environment, and new risks may arise frequently. Therefore, such forward-looking statements should not be relied upon excessively, as they represent only the views at the time of their formulation. Moreover, past performance does not necessarily indicate expected performance in future periods. For more information regarding Aon and its business, including factors that may have a significant impact on Aon's financial performance, please refer to the documents submitted by Aon to the U.S. Securities and Exchange Commission. Regarding these and other risks and uncertainties applicable to Aon and its business, please also refer to Aon's annual report Form for the year ending December 31, 2025. These factors may be revised or supplemented in subsequent reports submitted to the U.S. Securities and Exchange Commission. Aon has no obligation, and explicitly declares no obligation, to update or modify any forward-looking statements made from time to time, whether due to new information, future events, or other reasons.
Explanation for indicators that are not GAAP
This communication contains certain supplementary information that has not been calculated in accordance with generally accepted accounting principles in the United States (“GAAP”). This information includes organic revenue growth, free cash flow, adjusted operating profit, adjusted operating margin, adjusted net profit, adjusted net profit attributable to the shareholders of Aon, adjusted earnings per share after dilution (“EPS after dilution”), adjusted effective tax rate, adjusted other income (expenses), adjusted income tax expense, leverage ratio, and adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”). These indicators exclude the effects of amortization and impairment of intangible assets, costs related to the “accelerated Aon United” program, contingent consideration, NFP integration costs, USI transaction costs, certain pension settlements, capital expenditures, and several other significant items that affect performance in comparable periods. Organic revenue growth includes the impact of inter-company business activities and excludes the effects of exchange rate fluctuations, acquisitions (however, if the acquired business had been consolidated with the parent company during the same period of the prior year under the assumption, then the organic revenue growth would include the organic growth of that acquired business), asset disposals (including groups held for sale, which, if any, are excluded from organic revenue growth when classified as held for sale), transfers between revenue lines, income from entrusted investments, and gains and losses from derivative instruments accounted for as hedges. The currency impact refers to the effect of converting the results of the prior year to the current period’s exchange rates. A reconciliation table showing each non-GAAP indicator and its closest corresponding GAAP indicator is provided in the appendix to this communication. The supplementary organic revenue growth information and other indicators that exclude the effects of the aforementioned items will not affect net profit or any other amounts reported in accordance with U.S. GAAP. Free cash flow is defined as cash flow from operating activities minus capital expenditures. The adjusted effective tax rate excludes the applicable tax effects related to the aforementioned adjustments and is typically calculated using the estimated annual effective tax rate or the tax rate of the jurisdiction in question, as applicable.Starting from the third quarter of 2024, the adjusted effective tax rate also excludes the provision for interest on termination payments related to the proposed merger with Willis Towers Watson (Willis Towers Watson). The leverage ratio is calculated by dividing total debt by EBITDA of the previous 12 months. EBITDA represents net profit after deducting the effects of interest, taxes, depreciation, and amortization, as well as one-time gains arising from the sale of the majority of NFP's wealth business. Management believes that these indicators are helpful for meaningful period-to-period comparisons, and that this additional information is beneficial to investors. Management also uses several of these indicators to assess operational performance and compensation performance. Non-GAAP indicators should be considered supplementary to the consolidated financial statements of Aon, not a substitute for them. Similar supplementary information is provided by peers in the industry, although the adjustment items may vary. Aon does not provide forward-looking non-GAAP indicators (such as adjusted operating margin, adjusted other income (expenses), adjusted effective tax rate, and leverage ratio) because the company believes that such adjustments may imply a potentially misleading level of precision and certainty, and it is not possible to reasonably predict certain items in the corresponding GAAP indicators without unreasonable effort. This is due to the difficulty in predicting the timing or amount of several items that have not yet occurred and are not under Aon's control, or because these items cannot be reasonably predicted. For these reasons, Aon also cannot address the potential importance of unavailable information.
