AON earnings analysis
What we found in AON's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Aon delivered 5% organic growth and expanded Q2 GAAP operating margin by 80 basis points to 21.5%, led by Risk Capital, while reported revenue grew only 2% to $4.246 billion because divestitures reduced growth by 4%. Adjusted EPS rose to $3.81, but GAAP EPS fell 3% to $2.58 due primarily to a $73 million year-over-year deterioration in other income/(expense) and a higher tax rate. First-half cash flow and free cash flow increased to $986 million and $846 million, respectively, while debt fell to $15.0 billion; the principal operational weakness remains the 18% reported decline in Wealth Solutions after the NFP Wealth sale.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Organic growth offsets divestiture drag
- Q2 revenue was $4.246 billion, up $91 million or 2% year over year, with 5% organic growth and a 1% currency benefit partly offset by a 4% divestiture headwind. Sequentially, revenue declined from implied Q1 revenue of $5.034 billion (six-month revenue of $9.280 billion less Q2 revenue of $4.246 billion), reflecting normal seasonality.
- Operating margin expands year over year
- GAAP operating income increased $56 million to $915 million and operating margin expanded 80 basis points to 21.5% from 20.7%. Adjusted operating margin rose 70 basis points to 28.9%, aided by 5% organic growth and $25 million of restructuring savings.
- Adjusted EPS rises despite GAAP EPS decline
- Adjusted diluted EPS increased $0.32 to $3.81 from $3.49. GAAP diluted EPS was $2.58, down $0.08 from $2.66, as other income moved to a $17 million expense from $56 million of income and the tax rate increased to 22.0% from 15.5%.
- Risk Capital drives reported growth
- Risk Capital revenue increased 5% to $3.006 billion and segment operating income increased $52 million to $916 million. Commercial Risk Solutions grew 5% to $2.295 billion and Reinsurance Solutions grew 3% to $711 million, each delivering 5% organic growth.
- First-half cash generation improves
- First-half operating cash flow rose $50 million, or 5%, to $986 million and free cash flow rose $30 million, or 4%, to $846 million. Capital expenditures were $140 million, up $20 million from $120 million, equal to 14.2% of operating cash flow.
- Debt reduced and liquidity remains ample
- Liquidity remained substantial, with $1.062 billion of cash and cash equivalents plus $205 million of short-term investments at June 30. Total debt declined $282 million from year-end to $15.0 billion, and the company had $2.0 billion of undrawn committed credit facilities.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Wealth divestiture depresses reported growth
- Human Capital revenue fell $47 million, or 4%, to $1.244 billion. Wealth Solutions was the main drag, declining $93 million, or 18%, to $426 million following the NFP Wealth divestiture, despite 5% organic growth.
- Below-the-line items pressure GAAP earnings
- GAAP net income attributable to shareholders declined $28 million to $551 million and GAAP diluted EPS declined to $2.58 from $2.66. The effective tax rate increased 650 basis points to 22.0% from 15.5%, while other income/(expense) deteriorated by $73 million to a $17 million expense.
- Near-term debt maturities require cash deployment
- The company has $1.721 billion of notes classified as current or due within roughly a year: $600 million due March 2027, $600 million due May 2027, and $521 million due January 2027. Management expects to repay these amounts with operating cash flow and available cash.
- Restructuring execution remains a variable
- The Accelerating Aon United Program incurred $188 million of costs in the first six months of 2026 and had a remaining liability of $169 million at June 30, 2026. Management cautions that timing, cost estimates and savings may change in the final quarters of the program.
- No new Item 1A risk-factor disclosure
- No material risk-factor update was disclosed in this 10-Q: Item 1A directs readers to the risk factors in Aon's Form 10-K for the year ended December 31, 2025. Accordingly, the filing does not identify a newly added or revised risk factor.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $2.58
- Operating margin
- 21.5%
- Segment
- Risk Capital revenue: $3.006 billion, up $140 million or 5% year over year; operating margin 30.5% versus 30.1%.
- Segment
- Human Capital revenue: $1.244 billion, down $47 million or 4% year over year; operating margin 13.4% versus 9.1%.
- Segment
- Commercial Risk Solutions revenue: $2.295 billion, up $117 million or 5% year over year.
- Segment
- Reinsurance Solutions revenue: $711 million, up $23 million or 3% year over year.
- Segment
- Health Solutions revenue: $818 million, up $46 million or 6% year over year.
- Segment
- Wealth Solutions revenue: $426 million, down $93 million or 18% year over year.
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS outlook. Management expects approximately $41 million of pension contributions for the remainder of 2026; the Accelerating Aon United Program is currently expected to have cumulative costs of $1.3 billion and generate approximately $450 million of annualized expense savings by the end of 2027.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 1, 2026
- Aon plc reported Q1 2026 results with total revenue of $5.034 billion, a 6% increase from the prior year, driven by strong performance in the Risk Capital segment. Diluted EPS surged to $5.63, reflecting a 27%…
- 10-K · February 13, 2026
- Aon reports consolidated 2025 Total revenue of $17,181 million, with Risk Capital contributing $11,290 million and Human Capital $5,907 million. The company emphasizes an "Aon United" strategy and a focus on…
- 10-Q · October 31, 2025
- Aon reported Q3 revenue of $3,997 million, up $276 million (+7.4%) versus Q3 2024, with operating income expanding to $816 million (operating margin 20.4%) and diluted EPS of $2.11 (vs $1.57 a year ago). Operating cash…
- 10-Q · October 25, 2024
- Aon reported Q3 revenue of $3,721 million, up $768 million versus Q3 2023 ($2,953 million), driven by across-the-board growth in Commercial Risk, Health, Reinsurance and Wealth Solutions. Operating income declined to…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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