Aon plc Q4 FY2025 earnings call

• Advanced the three-by-three plan, integrating risk and human capital, expanding client leadership, and leveraging Aon Business Services. - Innovated with Aon Broker Copilot, Claims Copilot, and risk analyzers; expanded risk analyzers and saw market issuance of cap bonds rise over 40% with Aon's up over 50%. - Made progress in middle market strategy with NFP, connecting NFP to ABS platform. - Talent was a critical driver, with 6% net increase in revenue-generating talent. - Strong capital position with $7 billion available in 2026, generated $3.2 billion free cash flow in 2025.

For the full year, organic revenue growth was 6%, total revenue increased 9% to $17 billion. Adjusted operating margin expanded by 90 basis points to 32.4%. In Q4, organic revenue growth was 5%, total revenue was $4.3 billion, adjusted operating margin expanded 220 basis points to 35.5%. Commercial risk and reinsurance each had 6% or better growth. Health solutions grew 2% in Q4, Wealth grew 2%, with broad-based growth across solution lines.

• Mid-single-digit or greater organic revenue growth in 2026, fueled by recurring new business, revenue-generating hires, and middle market growth. - Operating margin expansion of 70-80 basis points, driven by restructuring savings, operating leverage from ABS, and impact of lower interest rates. - Strong adjusted EPS growth and double-digit free cash flow growth.

• Market volatility, including rate declines in property renewals. - Competitive talent market affecting retention and hiring in key growth areas. - Valuation and timing risks related to M&A opportunities.

Q: Follow up on talent and retention in today's environment.

A: Gregory Case and Edmund Reese discuss talent investment, focus on priority areas like construction and energy, and net 6% increase in revenue-generating hires.

Q: On acquisition and inorganic growth.

A: Edmund Reese talks about capital allocation, M&A pipeline meeting strategic and financial criteria, and portfolio IRR of acquisitions over 20% in the last decade.

Q: On data center opportunity and organic growth.

A: Gregory Case and Edmund Reese discuss data center as a unique opportunity contributing to mid-single-digit growth, with commercial risk showing 6% growth and data center driving construction growth.

Q: On $7 billion capital available and acquired EBITDA.

A: Edmund Reese talks about capital deployment balancing investment and return, and acquired EBITDA of $42 million in 2025 within expectations, with pipeline of opportunities.