Q1 2025 Earnings Conference Call The Company's forward-looking statements involve significant risks and uncertainties (some of which are beyond the Company's control) and assumptions that could cause actual future results to differ materially from the Company's historical experience and its present expectations or projections. Important factors that could cause results to differ materially from those in the forward-looking statements include (1) the timing and extent of changes in raw materials and componen ...

Financial Performance - For the three months ended March 31, 2025, total revenue was $322.1 million, compared to $262.1 million for the same period in 2024, representing a 22.9% increase[35]. - Consolidated gross profit for the three months ended March 31, 2025, was $86.364 million, compared to $92.242 million for the same period in 2024[131]. - The net income for the three months ended March 31, 2025, was $29,292,000, a decrease of 25.0% from $39,016,000 in the same period of 2024[101]. - Basic earnings per share for the three months ended March 31, 2025, was $0.36, down from $0.48 in the same period of 2024, representing a decline of 25.0%[101]. Revenue and Sales - AAON Oklahoma reported external sales of $161.838 million for the three months ended March 31, 2025, down from $210.140 million in 2024[131]. - AAON Coil Products experienced a significant increase in external sales, reaching $94.023 million in 2025 compared to $24.247 million in 2024[131]. - BASX's external sales increased to $66.193 million in 2025 from $27.712 million in 2024[131]. Costs and Expenses - Costs incurred on uncompleted contracts for the three months ended March 31, 2025, were $157.1 million, up from $106.4 million in 2024, indicating a 47.5% increase[45]. - The profit-sharing bonus plan paid out $3,297,000 for the three months ended March 31, 2025, compared to $4,600,000 in the same period of 2024, indicating a decrease of approximately 28.4%[97]. - The total pre-tax compensation cost related to unvested stock options not yet recognized as of March 31, 2025, is $17.0 million, expected to be recognized over approximately 2.4 years[82]. Assets and Liabilities - Contract assets increased to $188.7 million as of March 31, 2025, from $135.4 million as of December 31, 2024, reflecting increased production and demand for BASX branded products[44]. - Accounts receivable as of March 31, 2025, is $166,103,000, reflecting a net total of $164,977,000 after an allowance for credit losses of $1,126,000[52]. - Inventories as of March 31, 2025, total $204,101,000, with a net total of $198,852,000 after accounting for an allowance for excess and obsolete inventories of $5,249,000[53]. - Total accrued liabilities as of March 31, 2025, amount to $97,041,000, a decrease from $99,347,000 as of December 31, 2024[62]. Taxation - The income tax provision for the three months ended March 31, 2025, was $3.2 million, compared to $7.8 million for the same period in 2024, reflecting a decrease of approximately 59%[70]. - The effective tax rate for the three months ended March 31, 2025, was 9.8%, down from 16.6% in the same period of 2024[71]. - The company recorded an excess tax benefit of $7.2 million for the three months ended March 31, 2025, compared to $4.4 million in the same period of 2024[71]. Debt and Financing - The company has a total of $74,436,000 in term loans as of March 31, 2025, with $16,000,000 classified as short-term[65]. - The available borrowings under the revolving credit facility as of March 31, 2025, is $21,365,000, after accounting for outstanding borrowings of $177,981,000[64]. - The company has an outstanding debt balance of $252.6 million as of March 31, 2025, with a potential annual income decrease of approximately $2.5 million for each 1% increase in interest rates[196]. Employee Compensation - The Company awarded annual merit raises resulting in a 4.0% increase to wages in March 2025, following a 3.3% increase in March 2024[29]. - The total share-based compensation expense for the three months ended March 31, 2025, was $4,021,000, compared to $3,957,000 for the same period in 2024, reflecting an increase of approximately 1.6%[89]. - At March 31, 2025, unrecognized compensation cost related to unvested restricted stock awards was approximately $8.7 million, expected to be recognized over approximately 2.3 years[84]. Future Commitments and Risks - The Company has lease agreements with expiration dates ranging from April 2025 to November 2033, with a weighted average remaining term of 6.4 years[46]. - The company is exposed to commodity price volatility and manages this risk through cancellable and non-cancellable contracts with suppliers for periods of six to 18 months[195]. - Labor market tightening poses challenges for hiring employees necessary for continued growth[197]. - The timing of new product introductions and market acceptance is critical for future performance[197]. Goodwill and Intangible Assets - Goodwill as of March 31, 2025, is expected to be tax deductible in future periods, representing the excess of consideration paid over the fair value of acquired businesses[32]. - Total intangible assets net value as of March 31, 2025, is $78,721,000, with an amortization expense of $2,075,000 for the three months ended March 31, 2025[55][56]. - The company has estimated future amortization expense for finite-lived intangible assets totaling $49,523,000[57].

Core Viewpoint - AAON, Inc. reported strong first-quarter results for 2025, with significant year-over-year growth in net sales and backlog, driven primarily by BASX-branded products and improvements in operational efficiency despite some supply chain challenges [2][3][6]. Financial Performance - Net sales increased by 22.9% to $322.1 million compared to $262.1 million in Q1 2024, with BASX-branded products seeing a remarkable growth of 374.8% [2][5]. - Gross profit margin for the quarter was 26.8%, down from 35.2% in Q1 2024, attributed to lower production volumes at the AAON Oklahoma segment [3][5]. - Earnings per diluted share decreased by 23.9% to $0.35 from $0.46 in the same quarter last year [4][5]. Backlog and Orders - Total backlog reached a record $1.0 billion, up 83.9% year-over-year, with AAON-branded equipment backlog increasing by 44.9% [2][6]. - Bookings for BASX-branded equipment were strong, driven by demand for air-side and liquid cooling data center equipment [2][6]. Operational Insights - The company is experiencing improvements in production rates as supply chain issues related to the new R454B refrigerant components begin to resolve [2][6]. - Operational efficiencies are being enhanced at the Longview, Texas and Redmond, Oregon facilities, contributing positively to margins [2][3][6]. Cash and Investments - As of March 31, 2025, the company had cash and cash equivalents of $2.4 million and a revolving credit facility balance of $178.0 million [6]. - The company plans to invest $220.0 million in 2025 for the new Memphis plant and improvements in existing facilities [6]. Shareholder Returns - The company increased its dividend by 25.0% to $0.10 per quarter, reflecting confidence in future growth [6]. - During the quarter, the company repurchased 371,139 shares for $30.0 million at an average price of $80.81 per share [6].

Core Insights - Aon plc has identified a significant opportunity to reduce healthcare costs and improve workforce health through a comprehensive obesity management program that incorporates GLP-1 medications [1][4][5] - The company has launched its own GLP-1 weight management program for U.S. employees, combining affordable treatment access with virtual support and adherence tools [3][9] Health Data Analysis - Aon's analysis utilized data from over 50 million commercially insured lives, including 139,000 GLP-1 users from 2022-2024, to quantify the economic impact of GLP-1 medications [5][6] - The analysis revealed that GLP-1 users experienced a 44% reduction in the risk of hospitalizations due to major adverse cardiovascular events over 24 months [6] Economic Impact - The initial cost increase associated with GLP-1 medications was followed by a significant reduction in medical spend growth, with a seven-percentage point improvement observed in the second year for GLP-1 users [6] - Aon emphasized that addressing obesity not only presents a public health opportunity but also serves as an economic imperative, with obesity costing the U.S. economy up to $1.72 trillion annually [4] Program Implementation - Aon's GLP-1 weight management program aims to de-stigmatize obesity treatment and provide subsidized access to GLP-1 medications for its U.S. workforce [9][10] - The program includes AI-driven wellness tools, at-home blood tests, and virtual check-ins to enhance adherence and support sustainable health outcomes [9] Future Directions - Aon plans to advance analytics to support better decision-making regarding GLP-1 adoption and its long-term business impact [10] - The company aims to revolutionize chronic condition prevention and redefine workforce health investment, setting a new industry benchmark [10]

Core Viewpoint - Aon plc reported mixed financial results for Q1 2025, with adjusted earnings per share missing estimates but total revenues showing year-over-year growth [1][2]. Financial Performance - Adjusted earnings per share for Q1 2025 were $5.67, missing the Zacks Consensus Estimate by 6.1%, but improved by $0.01 from the previous year [1]. - Total revenues increased by 16% year over year to $4.73 billion, although this was 2.6% below consensus expectations [1]. - Organic revenue growth was reported at 5% [1]. Operating Costs and Margins - Total operating expenses rose by 25% year over year to $3.3 billion, driven by higher costs associated with the NFP acquisition and long-term growth investments [3]. - Adjusted operating income grew by 12% year over year to $1.8 billion, but fell short of the estimated $1.9 billion [4]. - The adjusted operating margin decreased by 130 basis points year over year to 38.4% [4]. Segment Performance - **Commercial Risk Solutions**: Organic revenues grew by 5% year over year, with revenues of $2 billion, an 11% increase, but missed estimates by 4.8% [5]. - **Reinsurance Solutions**: Organic revenues improved by 4% year over year, with revenues of $1.2 billion, a 2% increase, but also missed estimates by 3.6% [6]. - **Health Solutions**: Organic revenues grew by 5% year over year, with revenues of $1 billion, a 40% increase, but fell short of estimates by 1.7% [7]. - **Wealth Solutions**: Organic revenues increased by 8% year over year, with revenues soaring by 40% to $519 million, exceeding estimates by 3.8% [8]. Financial Position - As of March 31, 2025, Aon had cash and cash equivalents of $964 million, down from $1.1 billion at the end of 2024 [9]. - Total assets increased to $50.3 billion from $49 billion at the end of 2024 [9]. - Long-term debt remained stable at $16.28 billion, while short-term debt totaled $1.3 billion [9]. Cash Flow and Capital Deployment - Cash flow from operations was $140 million, down from $309 million a year ago [10]. - Adjusted free cash flows decreased by 68% year over year to $84 million [10]. - Aon repurchased 0.6 million class A ordinary shares for approximately $250 million, with $2.1 billion remaining under its repurchase authorization [11]. Future Outlook - Aon expects mid-single-digit or higher organic revenue growth for 2025 and anticipates an expansion in adjusted operating margin [12]. - Adjusted EPS is projected to see strong growth this year, with free cash flow expected to witness double-digit growth in the long term [12]. - The Aon United Restructuring program aims for annual run-rate savings of approximately $350 million by the end of 2026, with $40 million in net savings realized in Q1 [13].

Aon plc (NYSE:AON) Q1 2025 Earnings Conference Call April 25, 2025 8:30 AM ET Company Participants Greg Case - Chief Executive Officer Edmund Reese - Chief Financial Officer Conference Call Participants Andrew Kligerman - TD Securities Elyse Greenspan - Wells Fargo David Motemaden - Evercore ISI Paul Newsome - Piper Sandler Meyer Shields - KBW Jimmy Bhullar - JPMorgan Cave Montazeri - Deutsche Bank Operator Good morning, and thank you for holding. Welcome to Aon Plc's First Quarter 2025 Conference Call. At ...

Aon (AON) Q1 2025 Earnings Call April 25, 2025 04:35 PM ET Company Participants Greg Case - President & CEOEdmund Reese - CFO & EVPAndrew Kligerman - Managing DirectorElyse Greenspan - Managing DirectorMeyer Shields - Managing Director Conference Call Participants David Motemaden - Managing Director & Sr. Equity Research Analyst - Insurance & Business ServicesPaul Newsome - MD & Senior Research AnalystJimmy Bhullar - Equity Research AnalystCave Montazeri - Analyst Operator Good morning, and thank you for ho ...

Aon (AON) reported $4.73 billion in revenue for the quarter ended March 2025, representing a year-over-year increase of 16.2%. EPS of $5.67 for the same period compares to $5.66 a year ago.The reported revenue represents a surprise of -2.63% over the Zacks Consensus Estimate of $4.86 billion. With the consensus EPS estimate being $6.04, the EPS surprise was -6.13%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectati ...

Earnings Conference Call First Quarter 2025 April 25, 2025 Any or all of Aon's forward-looking statements may turn out to be inaccurate, and there are no guarantees about Aon's performance. The factors identified above are not exhaustive. Aon and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. In addition, results for pr ...

Core Insights - Aon plc reported a total revenue increase of 16% to $4.7 billion for Q1 2025 compared to Q1 2024, driven by organic revenue growth of 5% and contributions from the acquisition of NFP [2][3][9] - Adjusted operating income grew by 12% to $1.8 billion, while diluted EPS decreased by 17% to $4.43, reflecting the impact of foreign currency translation and increased operating expenses [2][9][26] - The company reaffirmed its 2025 guidance, expecting continued organic revenue growth, adjusted operating margin expansion, and strong adjusted EPS growth [9][26] Revenue Summary - Total revenue for Q1 2025 was $4.7 billion, up from $4.1 billion in Q1 2024, with Risk Capital revenue increasing by 7% to $3.2 billion and Human Capital revenue rising by 40% to $1.5 billion [3][9][11] - Organic revenue growth was 5%, with contributions from both Risk Capital and Human Capital segments [3][14][16] Expense Overview - Total operating expenses increased by 25% to $3.3 billion, primarily due to the inclusion of NFP's operating expenses and investments in long-term growth [4][18][21] - Compensation and benefits expenses rose by 19% to $2.2 billion, reflecting the integration of NFP and organic revenue growth [18][21] Cash Flow Analysis - Cash provided by operations decreased by 55% to $140 million, attributed to higher payments related to incentive compensation and restructuring [8][10] - Free cash flow fell by 68% to $84 million, reflecting a decrease in cash flows from operations and an increase in capital expenditures [10][40] Shareholder Returns - Aon repurchased 0.6 million class A ordinary shares for approximately $250 million in Q1 2025, with $2.1 billion remaining under its share repurchase program [7][9] - The company announced a 10% increase in its quarterly dividend, marking the 15th consecutive year of dividend growth [9][26] Tax and Shareholder Metrics - The effective tax rate for Q1 2025 was 21.4%, down from 23.2% in the prior year, with an adjusted effective tax rate of 20.9% [6][41] - Weighted average diluted shares outstanding increased to 217.9 million from 200.1 million in the prior year [7][41]