Summary of Financial Results - First Quarter
Revenues Before
Reimbursements
Net Earnings (Loss)
EBITDAC
Diluted Net Earnings
(Loss) Per Share
Segment
1st Q 26
1st Q 25
1st Q 26
1st Q 25
1st Q 26
1st Q 25
1st Q 26
1st Q 25
(in millions)
(in millions)
(in millions)
Brokerage, as reported
$ 4,293
$ 3,314
$ 913
$ 816
$ 1,562
$ 1,351
$ 3.51
$ 3.13
Net (gains) on divestitures
(7)
(6)
(5)
(4)
(7)
(6)
(0.02)
(0.02)
Acquisition integration
–
–
65
33
87
44
0.25
0.13
Workforce and lease termination
–
–
20
14
27
18
0.08
0.05
Acquisition related adjustments
–
–
39
25
50
30
0.15
0.09
Amortization of intangible assets
–
–
201
152
–
–
0.77
0.59
Effective income tax rate impact
–
–
–
1
–
–
–
–
Levelized foreign currency translation
–
57
–
13
–
19
–
0.05
Brokerage, as adjusted
4,286
3,365
1,233
1,050
1,719
1,456
4.74
4.02
Risk Management, as reported
428
374
50
41
86
72
0.19
0.16
Acquisition integration
–
–
1
1
1
2
–
–
Workforce and lease termination
–
–
1
3
1
3
–
0.01
Acquisition related adjustments
–
–
4
–
6
–
0.02
–
Amortization of intangible assets
–
–
5
4
–
–
0.02
0.02
Levelized foreign currency translation
–
7
–
1
–
1
–
–
Risk Management, as adjusted
428
381
61
50
94
78
0.23
0.19
Corporate, as reported
(5)
–
(140)
(148)
(91)
(122)
(0.54)
(0.57)
Transaction-related costs
–
–
6
20
7
23
0.02
0.08
Legal & tax related
–
–
1
–
18
–
–
–
Clean energy-related
5
–
3
–
5
–
0.02
–
Corporate, as adjusted
–
–
(130)
(128)
(61)
(99)
(0.50)
(0.49)
Total Company, as reported
$ 4,716
$ 3,688
$ 823
$ 709
$ 1,557
$ 1,301
$ 3.16
$ 2.72
Total Company, as adjusted
$ 4,714
$ 3,746
$ 1,164
$ 972
$ 1,752
$ 1,435
$ 4.47
$ 3.72
Total Brokerage & Risk Management, as reported
$ 4,721
$ 3,688
$ 963
$ 857
$ 1,648
$ 1,423
$ 3.70
$ 3.29
Total Brokerage & Risk Management, as adjusted
$ 4,714
$ 3,746
$ 1,294
$ 1,100
$ 1,813
$ 1,534
$ 4.97
$ 4.21
First quarter 2025 reported and adjusted amounts for the Brokerage Segment include approximately $143 million of incremental interest income, or approximately 41 cents after-tax, earned on the cash proceeds held to fund the AssuredPartners acquisition.
For first quarter 2026, the pretax impact of adjustments for the Brokerage, Risk Management, and Corporate Segments totals $431 million, $15 million and $30 million, respectively, and corresponding adjustment to the provision (benefit) for income taxes was $111 million, $4 million and ($20) million, respectively, relating to these adjustments. A detailed reconciliation is shown on pages 16 and 17.
(1 of 17)
"We had a terrific first quarter!" said J. Patrick Gallagher, Jr., Chairman and CEO. "For our combined brokerage and risk management segments, our two-pronged revenue growth strategy, growing both organically and through acquisitions, delivered revenue growth of 28% in the quarter. Our organic growth of 5% reflected strong client retention, disciplined execution, and the benefit of our diversified platform. Net earnings increased 12%, and adjusted EBITDAC grew 18%, marking our 24th consecutive quarter of double-digit adjusted EBITDAC growth.
"Our results reflect the strength and consistency of our business model across the dynamic insurance and economic environment. We remain focused on organic growth, strategic mergers and acquisitions, investment in productivity and quality, and maintaining our culture. We are also seeing the benefit of deeper collaboration across our P&C brokerage, benefits, and claims teams, supported by practical applications of AI, automation, and digitization that enhance how we serve and advocate for our clients. We believe Gallagher is well positioned to continue delivering strong growth and long‑term value for our shareholders."
Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (dollars in millions):
See "Information Regarding Non-GAAP Measures" beginning on page 8 of 17.
Organic Revenues (Non-GAAP)
1st Q 2026
1st Q 2025
Base Commissions and Fees
Commissions and fees, as reported
$ 3,915
$ 2,869
Less commissions and fees from acquisitions, divested operations and other
(937)
(64)
Levelized foreign currency translation
–
52
Organic base commissions and fees
$ 2,978
$ 2,857
Organic change in base commissions and fees
4 %
Supplemental Revenues
Supplemental revenues, as reported
$ 180
$ 114
Less supplemental revenues from acquisitions, divested operations and other
(46)
–
Levelized foreign currency translation
–
2
Organic supplemental revenues
$ 134
$ 116
Organic change in supplemental revenues
16 %
Contingent Revenues
Contingent revenues, as reported
$ 115
$ 93
Less contingent revenues from acquisitions, divested operations and other
(19)
–
Levelized foreign currency translation
–
1
Organic contingent revenues
$ 96
$ 94
Organic change in contingent revenues
2 %
Total reported commissions, fees, supplemental revenues and contingent revenues
$ 4,210
$ 3,076
Less commissions, fees, supplemental revenues and contingent revenues from acquisitions, divested operations and other
(1,002)
(64)
Levelized foreign currency translation
–
55
Total organic commissions, fees, supplemental revenues and contingent revenues
$ 3,208
$ 3,067
Total organic change
5 %
Acquisition Activity
1st Q 2026
1st Q 2025
Number of acquisitions closed *
8
10
Estimated annualized revenues acquired (in millions)
$ 49
$ 63
*
In the first quarter of 2026 and 2025, Gallagher issued 76,000 shares and 49,000 shares, respectively, of its common stock directly to sellers in connection with tax-free exchange acquisitions.
(2 of 17)
Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
See "Information Regarding Non-GAAP Measures" beginning on page 8 of 17.
Compensation Expense and Ratios
1st Q 2026
1st Q 2025
Compensation expense, as reported
$ 2,211
$ 1,617
Acquisition integration
(37)
(28)
Workforce and lease termination related charges
(24)
(16)
Acquisition related adjustments
(50)
(30)
Levelized foreign currency translation
–
29
Compensation expense, as adjusted
$ 2,100
$ 1,572
Reported compensation expense ratios using reported revenues on page 1
*
51.5 %
48.8 %
Adjusted compensation expense ratios using adjusted revenues on page 1
**
49.0 %
46.7 %
*
Reported first quarter 2026 compensation expense ratio was 2.7 pts higher than first quarter 2025. This ratio was primarily impacted by lower interest income revenues in the quarter, as first quarter 2025 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024. This ratio was also impacted by higher acquisition related adjustments and workforce termination costs, partially offset by savings from headcount controls.
**
Adjusted first quarter 2026 compensation expense ratio was 2.3 pts higher than first quarter 2025. This ratio was primarily impacted by lower interest income revenues in the quarter, as first quarter 2025 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024. This ratio also benefited from savings from headcount controls.
Operating Expense and Ratios
1st Q 2026
1st Q 2025
Operating expense, as reported
$ 520
$ 346
Acquisition integration
(50)
(16)
Workforce and lease termination related charges
(3)
(2)
Levelized foreign currency translation
–
9
Operating expense, as adjusted
$ 467
$ 337
Reported operating expense ratios using reported revenues on page 1
*
12.1 %
10.5 %
Adjusted operating expense ratios using adjusted revenues on page 1
**
10.9 %
10.0 %
*
Reported first quarter 2026 operating expense ratio was 1.6 pts higher than first quarter 2025. This ratio was primarily impacted by higher integration and technology costs, partially offset by lower outside consulting fees. This ratio was also impacted by lower interest income revenues in the quarter, as first quarter 2025 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.
**
Adjusted first quarter 2026 operating expense ratio was 0.9 pts higher than first quarter 2025. This ratio was primarily impacted by increased technology costs, partially offset by lower outside consulting fees. This ratio was also impacted by lower interest income revenues in the quarter, as first quarter 2025 included interest income earned on proceeds associated with the AssuredPartners Financing in December 2024.
(3 of 17)
Brokerage Segment Reported GAAP to Adjusted Non-GAAP Reconciliations (continued) (dollars in millions):
See "Information Regarding Non-GAAP Measures" beginning on page 8 of 17.
Net Earnings to Adjusted EBITDAC (Non-GAAP)
1st Q 2026
1st Q 2025
Net earnings, as reported
$ 913
$ 816
Provision for income taxes
313
283
Depreciation
49
33
Amortization
271
204
Change in estimated acquisition earnout payables
16
15
EBITDAC
1,562
1,351
Net (gains) on divestitures
(7)
(6)
Acquisition integration
87
44
Workforce and lease termination related charges
27
18
Acquisition related adjustments
50
30
Levelized foreign currency translation
–
19
EBITDAC, as adjusted
$ 1,719
$ 1,456
Net earnings margin, as reported using reported revenues on page 1
*
21.3 %
24.6 %
EBITDAC margin, as adjusted using adjusted revenues on page 1
*
40.1 %
