Aon plc Class A Ordinary Shares (Ireland)
AON · NYSE
Next quarter
Expected to report Jan 29, 2027 — estimated from last year’s reporting date.
Consensus is $4.80 EPS for Dec 2026 across 10 estimates, ranging $4.49 to $5.27.
AON Sep 2026
- 0.60%
- $3.34
- $3.36
- —
- $4.10B
Reported results
- $4.10B
- $809.00M
- 19.73%
- $476.00M
- $2.23
Highlights
- Organic growth: Revenue rose 3% year over year to $4.10 billion, with 6% organic growth offset by a 3% drag, primarily from divestitures.
- EPS: Adjusted diluted EPS was $3.36, 0.6% above the $3.34 consensus and up 10% year over year; GAAP diluted EPS was $2.23, up 6%.
- Margins: Adjusted operating income increased 5% to $1.11 billion and adjusted operating margin expanded 70 basis points to 27.0%; GAAP operating income declined 1% to $809 million and GAAP margin contracted 70 basis points to 19.7%.
- Broad-based demand: Organic revenue grew 7% in Commercial Risk, 7% in Reinsurance, 6% in Health and 4% in Wealth.
- USI financing: Aon expects its approximately $17 billion cash acquisition of USI to close in Q4 2026; it issued $13.5 billion of notes in September to help fund the transaction.
- Synergies and leverage: Aon identified $395 million of expected annual run-rate EBITDA synergies from USI, and aims to return to 2.8x–3.0x leverage in approximately 24 months through debt repayment.
- Cash generation: Q3 free cash flow was $1.10 billion, up 2%; first-nine-month free cash flow increased 3% to $1.94 billion.
- Sequential comparison: Revenue fell from $4.25 billion in Q2 to $4.10 billion in Q3, while GAAP diluted EPS declined from $2.58 to $2.23.
Analysis
Aon delivered a strong underlying growth quarter, with adjusted EPS of $3.36 edging the $3.34 consensus by 0.6% and increasing 10% from $3.05 a year ago. Revenue grew 3% to $4.10 billion, or 6% organically, as 7% growth in each of Commercial Risk and Reinsurance and 6% in Health were partly offset in reported results by divestitures, especially NFP Wealth. Compared with Q2, revenue eased from $4.25 billion and GAAP diluted EPS from $2.58 to $2.23; the year-over-year comparison is stronger, with GAAP EPS up 6% from $2.11.
The central feature of the print was broad organic demand translating into adjusted operating leverage: adjusted operating income rose 5% and margin expanded 70 basis points to 27.0%, despite continued investment and a softer pricing environment. Reported operating income slipped 1% and GAAP margin fell 70 basis points, reflecting higher restructuring and other expenses. The other defining event is the planned USI acquisition: Aon expects a Q4 close, has raised debt ahead of it, and outlined $395 million of annual run-rate synergies while prioritizing deleveraging. Cash generation remained solid, with $1.10 billion of quarterly free cash flow. Management maintained confidence in previously communicated full-year 2026 standalone objectives, excluding USI-related cash and transaction expenses.
Organic revenue growth
- Commercial Risk: Organic revenue grew 7%, driven by net new business and retention across North America and EMEA; net market impact was slightly positive. Management cited strength in core U.S. P&C and M&A services.
- Reinsurance: Organic growth was 7%, supported by treaty placements, new business and retention. The quarter also included a $24 million reversal of previously constrained revenue; net market impact was unfavorable.
- Human Capital: Health grew organically 6%, with strength in core health and benefits and talent analytics. Wealth grew 4% organically on U.K. and EMEA retirement advisory demand, despite the NFP Wealth divestiture reducing reported Wealth revenue 21%.
- Growth drivers: Management attributed the 6% company-wide organic increase to net new business and strong retention. New business contributed 11 points to organic growth, retention remained in the mid-90s, and net market impact was slightly positive.
Margins and earnings
- Adjusted performance: Adjusted operating income rose 5% to $1.11 billion and adjusted margin widened 70 basis points to 27.0%. Aon cited organic growth, scale benefits in Aon Business Services and $20 million of restructuring savings, partly offset by growth investments.
- Reported results: Operating income decreased $7 million to $809 million as operating expenses rose 3% to $3.29 billion, slightly faster than revenue. GAAP operating margin was 19.7%, down 70 basis points; Accelerating Aon United expenses rose to $93 million from $32 million.
- Per-share results: Adjusted diluted EPS increased 10% to $3.36, including a $0.02 favorable currency effect, while GAAP diluted EPS increased 6% to $2.23. Aon shareholders’ net income was $476 million, up 4%.
- Costs and investment: Compensation expense increased 1% and IT expense rose 11% as Aon continued investments in talent, technology and growth. Restructuring savings contributed approximately 50 basis points to adjusted margin expansion, according to management.
USI acquisition
- Transaction: Aon agreed to acquire USI for approximately $17 billion in cash and expects to close in Q4 2026, subject to closing conditions, including regulatory approval. USI has more than 10,500 colleagues.
- Strategic scale: Aon said combining USI, NFP and Aon would create a U.S. middle-market platform with approximately $6.5 billion of revenue, serving a market of more than 200,000 companies and 48 million employees.
- Synergies: The company identified $395 million of annual run-rate EBITDA synergies: $280 million in cost savings and $115 million in revenue synergies. It expects 90% of cost synergies to be completed by 2028.
- Funding and leverage: Aon issued $13.5 billion of senior notes in September to fund the acquisition and related uses; total debt on the balance sheet was about $28.0 billion at quarter-end, versus $15.2 billion at December 2025. Management said debt repayment would be the capital-allocation priority, targeting 2.8x–3.0x leverage in approximately 24 months.
Cash flow and outlook
- Cash generation: Q3 operating cash flow was $1.19 billion and free cash flow was $1.10 billion, up 4% and 2%, respectively. For the first nine months, operating cash flow increased 4% to $2.18 billion and free cash flow grew 3% to $1.94 billion.
- Full-year objectives: Excluding USI-related cash and transaction expenses, management remained confident in its previously communicated 2026 standalone objectives for organic growth, margin expansion, EPS and free cash flow.
- Near-term items: Aon expects Q4 interest expense of approximately $410 million, reflecting debt raised for USI. At current exchange rates, it expects a de minimis currency effect on Q4 adjusted EPS and an approximately $0.42 favorable effect for full-year 2026.
