Aon Plc (AON 4.58%), a global professional services firm known for its risk mitigation, insurance brokerage, and human capital consulting, reported its Q2 FY2025 earnings on July 25, 2025. The report showed adjusted EPS of $3.49, ahead of analyst expectations of $3.40 (Non-GAAP). GAAP revenue was $4,155 million, compared to the analyst estimate of $4,166.79 million. driven by expanding margins in the quarter. Management reaffirmed its financial guidance for the year, reflecting continued confidence in Aon's strategy and operating model during the quarter.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $3.49 | $3.40 | $2.93 | 19 % |
| Revenue (GAAP) | $4.16 billion | $4.17 billion | $3.76 billion | 11 % |
| Operating Income | $859 million | $656 million | 31 % | |
| Operating Margin | 20.7 % | 17.4 % | 3.3 pp | |
| Free Cash Flow (Non-GAAP) | $732 million | $460 million | 59 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
Aon Plc offers services in risk capital and human capital, including insurance brokerage, risk assessment, reinsurance solutions, health, and retirement consulting. The company helps clients minimize risks and manage complex employee benefit and wealth programs. Its operations span more than 120 countries, giving it a broad and diverse client base across many industries.
Recently, Aon Plc has prioritized expanding its high-margin, capital-light service offerings. The company's Aon United strategy, built around enhanced integration and cross-segment connectivity, is a major focus. Success relies on both efficient cost control and effective use of analytics to deliver value to clients. Integration of key acquisitions, such as NFP, plays a critical role in broadening capabilities and accelerating growth in core areas like health and wealth consulting.
Quarter Highlights: Growth Drivers and Results
Total revenue increased 11% in Q2 2025 compared to the same period last year. This growth was supported by both organic expansion—revenue growth not tied to acquisitions or currency effects (a non-GAAP measure as defined by Aon)—and contributions from the NFP acquisition, particularly in the Human Capital segment.
Organic revenue growth reached 6% in the second quarter, up from 5% in the first quarter. The Risk Capital group, which includes Commercial Risk and Reinsurance product lines (insurance brokerage and risk transfer solutions), delivered 6% organic revenue growth (non-GAAP) in both areas. This was driven by new business wins, continued strong client retention, and modestly positive market trends. Commercial Risk revenue was $2.18 billion, while Reinsurance revenue was $688 million.
The Human Capital segment, covering Health and Wealth Solutions (employee benefits and retirement consulting), posted particularly strong results. Segment revenue rose 15% year over year to $1.29 billion. Health Solutions saw 6% organic revenue growth, with double-digit expansion internationally, aided by the ongoing integration of the NFP acquisition. Wealth Solutions organic revenue growth was 3%, reflecting steady asset inflows and continued regulatory advisory work.
Operating margin, a key measure of profitability, expanded to 20.7%, up by 3.3 percentage points from a year earlier (GAAP). This increase came as operating income climbed to $859 million, an improvement of 31% year over year. Disciplined expense management played a significant role: total operating expenses increased by just 6%, well below revenue growth. Net restructuring savings from the Accelerating Aon United program were realized. Segment-level margin performance showed Risk Capital at a 34.1% adjusted operating margin and Human Capital at 19.1%.
Free cash flow, a measure of cash available after operating and capital expenses, reached $732 million in the three months ended June 30, 2025—up 59% from the prior-year period. This provided room for $250 million in share repurchases. The balance sheet showed long-term debt at $15.45 billion as of June 30, 2025, down from the previous period, and total shareholder equity up at $7.84 billion.
Aon Plc declared a 10% dividend increase in Q1, marking its fifteenth consecutive annual dividend hike. Management returned capital to shareholders through both dividends and buybacks while maintaining funding for strategic investments and acquisitions.
Management Guidance and Outlook
Management reaffirmed its outlook for fiscal 2025, projecting mid-single-digit or greater organic revenue growth and continued margin expansion. The company expects adjusted operating margin to rise by 80 to 90 basis points for the full year and to deliver double-digit growth in free cash flow.
No significant changes were made to guidance despite ongoing macroeconomic or currency risks. Investors are advised to track organic revenue growth (non-GAAP) by segment, NFP integration progress, margin expansion (particularly in Human Capital), and capital return levels in the coming quarters.
AON pays a quarterly dividend, which was raised 10% this year.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
