Aon Reports Second-Quarter 2026 Results

"Our second-quarter results demonstrate the consistency of our execution and the strength of our business model," said Greg Case, president and CEO. "We delivered 5% organic revenue growth, operating margin expansion, and 9% adjusted EPS growth, reflecting robust client demand, disciplined execution, and durable through-the-cycle performance."

"The structural advantage created by our Aon United strategy, coupled with AI-enabled analytical insights and innovative capital solutions, continues to differentiate Aon in the marketplace," Case added. "As clients navigate increasing complexity, we are expanding our addressable market, creating new opportunities with both traditional and non-traditional sources of capital, and generating the financial flexibility to invest for growth while returning significant capital to shareholders. We remain confident in our strategy, our outlook, and our ability to deliver sustainable long-term value."

Net income attributable to Aon shareholders in the second quarter decreased 3%, to $2.58 per share on a diluted basis, compared to $2.66 per share on a diluted basis, in the prior-year period. Adjusted net income per share attributable to Aon shareholders increased 9% to $3.81 on a diluted basis, including a de minimis impact if prior-year period results were translated at current period foreign exchange rates ("foreign currency translation"), compared to $3.49 in the prior-year period. Certain items that impacted second-quarter results and comparisons with the prior-year period are detailed in "Reconciliation of Non-GAAP Measures - Operating Income, Operating Margin and Diluted Earnings Per Share" on page 11 of this press release.

SECOND-QUARTER 2026 FINANCIAL SUMMARY

Total revenue in the second quarter increased 2% to $4.2 billion compared to the prior-year period, reflecting 5% organic revenue growth and a 1% favorable impact from foreign currency translation, partially offset by a 4% unfavorable impact primarily from divestitures. Risk Capital revenue increased $140 million, or 5%, to $3.0 billion and Human Capital revenue decreased $47 million, or 4%, to $1.2 billion.

Total operating expenses in the second quarter increased 1% to $3.3 billion compared to the prior-year period due primarily to an increase in expense associated with 5% organic revenue growth and investments in long-term growth, as well as an unfavorable impact from foreign currency translation, partially offset by lower expenses associated with the sale of the NFP Wealth business, $25 million of net restructuring savings, and lower compensation expense. Risk Capital operating expenses increased $88 million, or 4%, and Human Capital operating expenses decreased $97 million, or 8%.

Foreign currency translation had a de minimis impact on both diluted EPS and adjusted EPS in the second quarter. If currency were to remain stable at today's rates, the Company would expect a de minimis impact on adjusted EPS in the third quarter of 2026 and a favorable impact on adjusted EPS of approximately $0.42 per share for the full year 2026.

Effective tax rate was 22.0% in the second quarter compared to 15.5% in the prior-year period. After adjusting to exclude the applicable tax impact associated with certain non-GAAP adjustments, the adjusted effective tax rate for the second quarter of 2026 was 20.1% compared to 16.5% in the prior-year period. The primary drivers of the change in the effective tax rate were changes to the geographical distribution of income and an unfavorable impact from discrete items compared to a favorable impact in the prior-year period. The primary drivers of the change in the adjusted effective tax rate were changes to the geographical distribution of income and a lower favorable impact from discrete items.

Weighted average diluted shares outstanding decreased to 213.9 million in the second quarter compared to 217.3 million in the prior-year period. The Company repurchased 1.9 million class A ordinary shares for approximately $600 million in the second quarter. As of June 30, 2026, the Company had approximately $7.7 billion of remaining authorization under its share repurchase program.

YEAR-TO-DATE 2026 CASH FLOW SUMMARY

Cash flows provided by operations for the first six months of 2026 increased $50 million, or 5%, to $986 million compared to the prior-year period, as strong adjusted operating income growth offset the cash tax payment related to NFP Wealth and impact of working capital.

Free cash flow, defined as cash flow from operations less capital expenditures, increased 4%, to $846 million for the first six months of 2026 compared to the prior-year period, reflecting an increase in cash flows provided by operations, partially offset by a $20 million increase in capital expenditures.

SECOND-QUARTER 2026 REVENUE REVIEW

The second-quarter revenue reviews provided below include supplemental information related to organic revenue growth, which is a non-GAAP measure that is described in detail in "Reconciliation of Non-GAAP Measures - Organic Revenue Growth and Free Cash Flow" on page 10 of this press release.

Total revenue increased $91 million, or 2%, compared to the prior-year period, reflecting 5% organic revenue growth, driven by net new business and ongoing strong retention, and a 1% favorable impact from foreign currency translation, partially offset by a 4% unfavorable impact primarily from divestitures largely due to the sales of the NFP Wealth business and Stroz Friedberg. Risk Capital revenue increased $140 million, or 5%, and Human Capital revenue decreased $47 million, or 4%.

Risk Capital

Commercial Risk Solutions Organic revenue growth of 5% reflects growth in EMEA and North America, driven by net new business and ongoing strong retention. Net market impact was modestly positive. Within North America, performance was highlighted by strong growth in U.S. core P&C and double-digit growth in construction.

Reinsurance Solutions Organic revenue growth of 5% reflects growth in treaty placements, driven by net new business and strong retention, and double-digit increases in facultative placements and our Strategy and Technology Group. Net market impact was unfavorable in the quarter.

Human Capital

Health Solutions Organic revenue growth of 5% reflects strong growth in core health and benefits, including particular strength internationally, driven by net new business and ongoing strong retention, as well as growth in Talent Solutions driven by strong growth in talent analytics. Net market impact was slightly negative.

Wealth Solutions Organic revenue growth of 5% reflects strong growth in Retirement, driven by continued demand for advisory work in the UK and EMEA related to the ongoing impact of regulatory change.

SECOND-QUARTER 2026 EXPENSE REVIEW

Compensation and benefits expense decreased $89 million, or 4%, compared to the prior-year period, due primarily to lower expenses from the sale of the NFP Wealth business and savings from Accelerating Aon United restructuring actions, partially offset by the unfavorable impact of foreign currency translation and expenses associated with 5% organic revenue growth and investments in long-term growth.

Information technology expense increased $26 million, or 19%, compared to the prior-year period, due primarily to Aon Business Services investments in ongoing technology initiatives.

Premises expense was flat compared to the prior-year period, as we continued to optimize our real estate footprint and recognize savings from Accelerating Aon United restructuring actions.

Depreciation of fixed assets increased $2 million, or 4%, compared to the prior-year period.

Amortization and impairment of intangible assets decreased $27 million, or 13%, compared to the prior-year period, due primarily to the decrease in intangible assets associated with the sale of the NFP Wealth business.

Other general expense increased $121 million, or 32%, compared to the prior-year period, due primarily to non-recurring gains including sales of portfolios in the prior-year period, partially offset by lower expenses associated with the sale of the NFP Wealth business.

Accelerating Aon United Restructuring Program expense increased $2 million, or 2%, compared to the prior-year period, due primarily to costs related to workforce optimization.

SECOND-QUARTER 2026 INCOME SUMMARY

Certain noteworthy items impacted adjusted operating income and adjusted operating margin in the second quarters of 2026 and 2025, which are also described in detail in "Reconciliation of Non-GAAP Measures - Operating Income, Operating Margin and Diluted Earnings Per Share" on page 11 of this press release.

Operating income increased $56 million and operating margin increased 80 basis points to 21.5%, each compared to the prior-year period. Adjusted operating income increased $56 million, or 5%, and adjusted operating margin increased 70 basis points to 28.9%, each compared to the prior-year period. The increase in adjusted operating income reflects organic revenue growth, scale improvements in ABS and net restructuring savings, partially offset by investments for growth.

Interest income increased $5 million compared to the prior-year period, primarily reflecting higher cash balances due to the sale of the NFP Wealth business. Interest expense decreased $33 million compared to the prior-year period, reflecting lower total debt.

Other expense was $17 million compared to other income of $56 million in the prior-year period, primarily due to the absence of deferred consideration recognized in the prior-year period related to the 2017 sale of our outsourcing business. Adjusted other expense was $17 million compared to $32 million in the prior-year period, primarily reflecting a favorable impact of foreign currency remeasurement of assets and liabilities in non-functional currencies and a decrease in non-cash pension expense.

Net income attributable to Aon shareholders decreased 5% to $551 million compared to $579 million in the prior-year period. Adjusted net income attributable to Aon shareholders increased 7% to $814 million compared to $759 million in the prior-year period.

Conference Call, Presentation Slides, and Webcast Details

The Company will host a conference call on Wednesday, July 29, 2026 at 7:30 a.m., central time. Interested parties can listen to the conference call via a live audio webcast and view the presentation slides at ir.aon.com.

About Aon

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.

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Explanation of Non-GAAP Measures

This communication includes supplemental information not calculated in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), including organic revenue growth, free cash flow, adjusted operating income, adjusted operating margin, adjusted earnings per share, adjusted net income attributable to Aon shareholders, adjusted diluted net income per share ("EPS"), adjusted effective tax rate, adjusted other income (expense), and adjusted income before income taxes that exclude the effects of intangible asset amortization and impairment, Accelerating Aon United Program expenses, contingent consideration, NFP integration costs, certain pension settlements, capital expenditures, and certain other noteworthy items that affected results for the comparable periods. Organic revenue growth includes the impact of intercompany activity and excludes foreign exchange rate changes, acquisitions (provided that organic revenue growth includes organic growth of an acquired business as calculated assuming that the acquired business was part of the combined company for the same proportion of the relevant prior-year period), divestitures (including held for sale disposal groups, if any, which are adjusted from organic revenue growth upon classification as held-for-sale), transfers between revenue lines, fiduciary investment income, and gains or losses on derivatives accounted for as hedges. Currency impact represents the effect on prior-year period results if they were translated at current period foreign exchange rates. Reconciliations to the closest U.S. GAAP measure for each non-GAAP measure presented in this communication are provided in the attached appendices. Supplemental organic revenue growth information and additional measures that exclude the effects of certain items noted above do not affect net income or any other U.S. GAAP reported amounts. Free cash flow is cash flows from operating activity less capital expenditures. The adjusted effective tax rate excludes the applicable tax impact associated with adjustments previously described, generally at the estimated annual effective tax rate or jurisdictional rate, where appropriate. Beginning in the third quarter of 2024, the adjusted effective tax rate also excludes interest accruals for income tax reserves related to the termination fee payment made in connection with the Company's terminated proposed combination with Willis Towers Watson. Management believes that these measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors. Management also uses these measures to assess operating performance and performance for compensation. Non-GAAP measures should be viewed in addition to, not in lieu of, Aon's Consolidated Financial Statements. Industry peers provide similar supplemental information regarding their performance, although they may not make identical adjustments. Aon does not provide a reconciliation of forward-looking non-GAAP measures, such as adjusted operating margin, adjusted other income (expense) and adjusted effective tax rate, where Aon believes such a reconciliation would imply a degree of precision and certainty that could be misleading and is unable to reasonably predict certain items contained in the corresponding GAAP measures without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of Aon's control, or cannot be reasonably predicted. For these reasons, Aon is also unable to address the probable significance of the unavailable information.