Marsh & McLennan Companies(MMC) - 2025 Q2 - Quarterly Results

Financial Highlights Consolidated Results (Q2 2025) Marsh McLennan achieved solid Q2 2025 results with 12% revenue growth to $7.0 billion, 4% underlying growth, and 14% adjusted operating income increase - CEO John Doyle highlighted the quarter's solid performance, attributing the 12% revenue growth to continued business momentum and the impact of acquisitions. He also noted a 10% increase in the company's dividend[2] Q2 2025 Consolidated Financial Performance | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $7.0 billion | $6.2 billion | 12% | | Underlying Revenue | - | - | 4% | | Operating Income (GAAP) | $1.8 billion | $1.6 billion | 11% | | Adjusted Operating Income | $2.1 billion | $1.8 billion | 14% | | Net Income (attributable to Company) | $1.2 billion | $1.1 billion | 8% | | EPS (GAAP) | $2.45 | $2.27 | 8% | | Adjusted EPS | $2.72 | $2.44 | 11% | Consolidated Results (H1 2025) H1 2025 consolidated revenue grew 11% to $14.0 billion with 4% underlying growth, and adjusted EPS increased 8% to $5.78 H1 2025 Consolidated Financial Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $14.0 billion | $12.7 billion | 11% | | Underlying Revenue | - | - | 4% | | Operating Income (GAAP) | $3.8 billion | $3.6 billion | 7% | | Adjusted Operating Income | $4.3 billion | $3.9 billion | 11% | | Net Income (attributable to Company) | $2.6 billion | $2.5 billion | 3% | | EPS (GAAP) | $5.23 | $5.08 | 3% | | Adjusted EPS | $5.78 | $5.36 | 8% | Segment Performance Risk & Insurance Services Risk & Insurance Services saw strong Q2 2025 revenue growth of 15% to $4.6 billion (4% underlying) and 16% adjusted operating income increase Risk & Insurance Services Financial Summary | Period | Revenue (GAAP) | Underlying Revenue Growth | Adjusted Operating Income | Adj. Op. Income Growth | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $4.6 billion | 4% | $1.6 billion | 16% | | H1 2025 | $9.4 billion | 4% | $3.5 billion | 12% | Marsh - Marsh's revenue was $3.8 billion in Q2 2025, an increase of 18% (5% underlying). Growth was driven by a 4% rise in U.S./Canada and 7% growth in International operations, with EMEA showing strong performance at 8% underlying growth[7] Guy Carpenter - Guy Carpenter's revenue in Q2 2025 was $677 million, up 7% (5% underlying). For the first six months, underlying revenue growth was also 5%[8] Consulting Consulting segment revenue grew 7% to $2.4 billion (3% underlying) in Q2 2025, with adjusted operating income up 9% to $479 million Consulting Financial Summary | Period | Revenue (GAAP) | Underlying Revenue Growth | Adjusted Operating Income | Adj. Op. Income Growth | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $2.4 billion | 3% | $479 million | 9% | | H1 2025 | $4.7 billion | 4% | $970 million | 9% | Mercer - Mercer's Q2 revenue was $1.5 billion, an increase of 9% (3% underlying). Health revenue showed strong underlying growth at 7%, while Wealth grew 2% and Career declined 5%[10] Oliver Wyman - Oliver Wyman's revenue in Q2 2025 was $873 million, an increase of 5% (3% underlying). For the first six months, underlying revenue growth was 4%[11] Capital Management The company actively returned capital to shareholders via share repurchases and a significant dividend increase Share Repurchases and Dividends Marsh McLennan repurchased $300 million in Q2 2025 shares and increased the quarterly dividend by 10% to $0.900 per share - Share Repurchases: - Q2 2025: 1.4 million shares for $300 million - H1 2025: 2.7 million shares for $600 million[12] - The Board of Directors increased the quarterly dividend by 10% to $0.900 per share, payable on August 15, 2025[12] Financial Statements Consolidated Statements of Income Consolidated Statements of Income show increased revenue and operating income for Q2 and H1 2025, with Q2 revenue reaching $6.97 billion Consolidated Income Statement Highlights (In millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6,974 | $6,221 | $14,035 | $12,694 | | Operating income | $1,829 | $1,642 | $3,834 | $3,567 | | Income before income taxes | $1,646 | $1,565 | $3,473 | $3,436 | | Net income attributable to the Company | $1,211 | $1,125 | $2,592 | $2,525 | | Diluted EPS | $2.45 | $2.27 | $5.23 | $5.08 | Consolidated Balance Sheets As of June 30, 2025, the balance sheet shows strong total assets of $58.6 billion and increased total equity of $16.0 billion Key Balance Sheet Items (In millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,677 | $2,398 | | Total current assets | $23,334 | $22,117 | | Goodwill and intangible assets | $28,689 | $28,126 | | Total Assets | $58,555 | $56,481 | | Long-term debt | $18,960 | $19,428 | | Total Liabilities | $42,579 | $42,946 | | Total Equity | $15,976 | $13,535 | Consolidated Statements of Cash Flows H1 2025 net cash from operations significantly increased to $1.05 billion, with major cash uses for dividends and share repurchases Key Cash Flow Items - Six Months Ended June 30 (In millions) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operations | $1,049 | $434 | | Net cash used for financing activities | $(1,833) | $(384) | | Net cash used for investing activities | $(95) | $(783) | | Purchase of treasury shares | $(600) | $(600) | | Dividends paid | $(810) | $(706) | Supplemental Information and Non-GAAP Reconciliations Revenue Analysis Q2 2025 revenue analysis shows 12% GAAP growth, with 8% from acquisitions and 4% underlying growth after currency impact Q2 2025 Components of Revenue Change | Segment | GAAP % Change | Currency Impact | Acq./Disp. Impact | Underlying Revenue % | | :--- | :--- | :--- | :--- | :--- | | Risk & Insurance Services | 15% | 1% | 10% | 4% | | Consulting | 7% | 1% | 3% | 3% | | Total Company | 12% | 1% | 8% | 4% | - The acquisition of McGriff was a significant driver of the 'Acquisitions/Dispositions' impact, particularly within the Marsh U.S./Canada division, which accounted for 22 percentage points of its 26% GAAP revenue growth[24] Reconciliation of Non-GAAP Measures The company reconciles GAAP to non-GAAP figures, adjusting Q2 2025 GAAP operating income of $1.83 billion to $2.06 billion adjusted operating income - Starting in Q1 2025, the company modified its non-GAAP calculations to exclude the impact of intangible amortization and other net benefit credits to better represent operating performance[34] Q2 2025 Reconciliation of GAAP to Adjusted Operating Income (In millions) | Metric | Amount | | :--- | :--- | | GAAP Operating income | $1,829 | | Total noteworthy items (restructuring, acquisition costs, etc.) | $88 | | Identified intangible amortization expense | $140 | | Adjusted operating income | $2,057 | Q2 2025 Reconciliation of GAAP to Adjusted EPS | Metric | Per Share Amount | | :--- | :--- | | GAAP EPS | $2.45 | | Operating income adjustments & other items (net of tax) | $0.27 | | Adjusted EPS | $2.72 | Forward-Looking Statements and Risk Factors This section outlines forward-looking statements and significant risks that could materially affect the company's future performance Key Risk Factors Key risk factors include macroeconomic instability, litigation, cybersecurity threats, regulatory changes, and acquisition integration challenges - The company cautions that forward-looking statements are subject to inherent risks and uncertainties[16] - Identified risks include: - Geopolitical or macroeconomic conditions (wars, inflation, recessions) - Lawsuits from errors and omissions (E&O) or breaches of fiduciary duty - Ransomware and other cyber attacks - Ability to attract and retain talent - Competitive pressures and digital disruption - Ability to successfully integrate acquisitions, such as McGriff[18]