Arthur J. Gallagher Q4 Earnings & Revenues Beat, Dividend Raised

Core Insights - Arthur J. Gallagher & Co. (AJG) reported fourth-quarter 2025 adjusted net earnings of $2.38 per share, exceeding the Zacks Consensus Estimate by 1.2% and reflecting an 11.7% year-over-year increase [1][8] - The company's performance was bolstered by margin expansion in the Risk Management segment, increased commissions, fees, supplemental revenues, and improved EBITDAC [1][8] Operational Update - Total revenues reached $3.6 billion, surpassing the Zacks Consensus Estimate by 0.3% and showing a 33.8% year-over-year growth, driven by higher commissions, fees, supplemental revenues, and contingent revenues [2][8] - Total expenses rose 44.7% year over year to $3.4 billion, attributed to increased compensation, operating costs, reimbursements, interest, depreciation, and amortization [2] Earnings Metrics - Earnings before interest, tax, depreciation, and amortization (EBITDAC) grew 3.3% year over year to $710 million [3] Segmental Results - Brokerage segment revenues increased 38% year over year to $3.2 billion, driven by higher commissions and fees [4] - Expenses in the brokerage segment rose 46.7% year over year to $2.7 billion, with adjusted EBITDAC climbing 32% to $1 billion, although the margin contracted by 80 basis points to 32.2% [4] - Risk Management segment revenues increased 13% year over year to $417 million, with expenses rising 12.9% to $392 million, leading to an adjusted EBITDAC improvement of 16.8% to $90 million and a margin expansion of 90 basis points to 21.6% [5] Financial Update - As of December 31, 2025, total assets were $70.6 billion, a 10% increase from the previous year, with cash and cash equivalents rising 90.6% to $1.4 billion [6] - Shareholders' equity increased 15.6% to $23.3 billion compared to December 31, 2024 [6] Dividend Update - The board declared a quarterly cash dividend of 70 cents per share, a 7.6% increase from the previous dividend of 65 cents, payable on March 20, 2026 [7] Acquisition Update - In the quarter, the company closed six acquisitions with estimated annualized revenues of approximately $118 million [9] Full-Year Update - For the full year, total revenues increased 20.6% year over year to $13.7 billion, slightly missing the consensus estimate by 0.1% [10] - The company completed 31 acquisitions in 2025, with estimated annualized revenues of $3.5 billion, and adjusted earnings for the year were $10.69 per share, up 5.8% year over year, beating the Zacks Consensus Estimate by 0.2% [10]