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• Total Revenue Growth: 16% increase to $4.7 billion.

• Organic Revenue Growth: 5% for the quarter.

• Adjusted Operating Income Growth: 12% increase.

• Adjusted Operating Margin: 38.4%, down 130 basis points from Q1 '24.

• Adjusted EPS: $5.67.

• Free Cash Flow: $84 million generated.

• Capital Returned to Shareholders: $397 million through dividends and share repurchases.

• Quarterly Dividend Increase: 10% increase to $0.74 per share.

• Commercial Risk Organic Revenue Growth: 5%.

• Reinsurance Organic Revenue Growth: 4%.

• Health Solutions Organic Revenue Growth: 5%.

• Wealth Organic Revenue Growth: 8%.

• Interest Expense: $206 million, up $62 million year-over-year.

• Tax Rate: 20.9% for Q1.

• Leverage Ratio: 3.5 times.

• NFP Acquisition Impact: Contributed to margin and earnings impact.

• Warning! GuruFocus has detected 3 Warning Signs with AON.

Release Date: April 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Aon PLC (NYSE:AON) reported a 16% total revenue growth, driven by 5% organic revenue growth and the acquisition of NFP.

• The company achieved a 38.4% adjusted operating income margin, contributing to a 12% growth in adjusted operating income.

• Aon PLC (NYSE:AON) increased its quarterly dividend by 10%, marking the 15th consecutive year of dividend growth.

• The acquisition of NFP has been successful, with high producer retention and a strong pipeline for middle market growth.

• Aon PLC (NYSE:AON) reaffirmed its 2025 full-year guidance, expecting mid-single-digit or greater organic revenue growth, margin expansion, and double-digit free cash flow growth.

Negative Points

• The company faced a 130 basis point decline in adjusted operating margin due to the impact of the NFP acquisition.

• Interest expense increased by $62 million year-over-year, reflecting higher debt levels from the NFP acquisition.

• Free cash flow generation in Q1 was lower due to higher incentive interest and restructuring payments.

• The macroeconomic environment remains unpredictable, with potential pressures on client discretionary spending due to tariffs and trade complexities.

• Aon PLC (NYSE:AON) experienced a 15% decline in fiduciary investment income due to lower interest rates.

Q & A Highlights

Q: Can you provide more details on the M&A pipeline for NFP and your thoughts on potential acquisitions in 2025? A: Gregory Case, CEO, stated that Aon is always looking for opportunities to strengthen the firm and reinforce return on invested capital. The acquisition of NFP has been successful, and Aon plans to continue executing programmatic acquisitions. Edmund Reese, CFO, added that the primary objective for 2025 is to achieve the leverage ratio target, and any M&A will be evaluated based on strategic fit and financial return criteria.