NYSE$AJG

Arthur J.Gallagher & Co · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Arthur J. Gallagher & Co. reported financial results for the quarter ended March 31, 2023.

Arthur J. Gallagher & Co. had an excellent start to 2023, with core brokerage and risk management segments posting 12% reported revenue growth and 9.7% organic revenue growth. Net earnings grew by 12%, and adjusted EBITDAC increased by 15%, with an improved adjusted EBITDAC margin of 29 basis points.

  • Core brokerage and risk management segments combined to post 12% reported revenue growth.
  • Core brokerage and risk management segments combined to post 9.7% organic revenue growth.
  • Net earnings increased by 12%.
  • Adjusted EBITDAC grew by 15%, and the adjusted EBITDAC margin improved 29 basis points.

Headline financials

Total Revenue

$2.71B

Previous: $2.44B+11.1%
EPS (adj)

$3.03

Previous: $2.81+7.8%
Organic Revenue Growth

9.7%

Previous: 10.0%-3.0%
Capital Expenditures

-$29.7M

Previous: -$37.7M+21.2%
Free Cash Flow

$457M

Previous: $401M+13.9%
Net Income

$487M

Previous: $439M+10.9%
Operating Income

-$405M

Previous: -$340M-19.2%
Gross Profit

$2.68B

Previous: $2.41B+11.2%
Cash & Equivalents

$1.35B

Previous: $529M+154.6%
Total Assets

$45.1B

Previous: $43.2B+4.5%
Stock-Based Comp

$3.8M

Previous: $2.4M+58.3%

Revenue & EPS history

Arthur J. Gallagher · Revenue · Quarterly

$2.71B

Q1 2023+11.1%vs Q1 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Arthur J. Gallagher · $2.67B total across 2 segments · Q1 2023

  • Brokerage
    $2.38B+11.9%
  • Risk Management
    $298M+14.9%

Forward guidance

The company expects insurance and reinsurance pricing increases to continue throughout 2023 and beyond and believes they are very well positioned for the remainder of 2023.

Tailwinds

  • Insurance and reinsurance pricing increases are expected to continue.
  • Talented team will leverage expertise, data and insights.
  • Well positioned for the remainder of 2023
  • First quarter primary insurance market conditions are overall consistent with 2022 with renewal premiums up more than 9%.
  • Continue to see growth in customers’ exposure units and payrolls.

Headwinds

  • Property reinsurance market is very hard.
  • Seeing tighter terms and conditions across a broader range of territories.
  • Tighter terms and conditions even into casualty reinsurance lines.
  • Changes in worldwide and national economic conditions, including the onset of a recession or economic downturn
  • Inflation and related monetary policy responses, and failures of financial institutions and other counterparties

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

+0.6%

Avg return

Earnings day

+1.1%

Avg return

5 days after

+3.1%

Avg return

30 days after

53%

36 / 68 earnings

Positive

+8.2%

Q4 2017

Best reaction

-4.6%

Q1 2014

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.7%-4.6%-2.6%
Q4 2025-3.3%+1.5%-7.2%
Q3 2025-0.7%-6.7%-11.6%
Q2 2025+0.0%+2.0%+6.5%
Q1 2025+4.1%+6.9%+9.4%
Q3 2024-2.1%-1.3%+5.3%
Q2 2024+3.4%+3.9%+4.9%
Q1 2024-1.1%-0.9%+6.4%
Q4 2023-2.5%-3.6%+2.5%
Q3 2023-1.2%+1.9%+9.4%
Q2 2023-1.6%-0.2%+3.6%
Q1 2023+1.3%+2.3%-0.8%
Q4 2022-1.7%-0.7%-6.3%
Q3 2022+7.2%+6.5%+13.3%
Q2 2022+3.3%-0.6%+8.3%
Q1 2022-3.9%-5.6%-5.6%
Q4 2021+0.9%+2.4%+4.0%
Q3 2021+3.4%+0.5%+0.6%
Q2 2021+1.3%+0.8%+4.5%
Q1 2021+3.5%+3.9%+4.7%
Q4 2020+2.0%+4.0%+5.9%
Q3 2020-0.6%+3.5%+11.1%
Q2 2020+2.6%+0.6%+0.2%
Q1 2020-2.7%+4.3%+18.3%
Q4 2019+3.8%+6.0%-1.3%
Q3 2019-0.8%-0.2%+1.8%
Q2 2019-0.0%-0.6%-4.7%
Q1 2019+1.3%+1.9%+2.7%
Q4 2018+5.5%+7.6%+10.2%
Q3 2018+3.8%+4.1%+7.5%
Q2 2018-0.4%+0.3%+1.4%
Q1 2018-1.9%-1.5%-5.3%
Q4 2017+8.2%+6.5%+5.9%
Q3 2017+0.0%+1.3%+4.6%
Q2 2017+1.3%+0.9%-0.5%
Q1 2017-1.0%-2.3%+1.4%
Q4 2016+1.5%+0.1%+5.7%
Q3 2016-0.4%-1.8%+6.9%
Q2 2016-0.6%-1.1%-1.0%
Q1 2016+2.0%
Q4 2015+1.9%
Q3 2015+0.8%
Q2 2015+1.2%
Q1 2015+1.6%
Q4 2014+2.6%
Q3 2014+3.1%
Q2 2014+0.1%
Q1 2014-4.6%
Q4 2013+1.2%
Q3 2013+0.2%
Q2 2013+1.7%
Q1 2013+0.3%
Q4 2011-0.3%
Q1 2010-0.3%
Q4 2012+1.8%
Q3 2012-0.6%
Q2 2012-0.2%
Q1 2012-0.6%
Q4 2010-1.6%
Q3 2011-3.2%
Q2 2011-3.0%
Q1 2011+1.0%
Q4 2008+0.6%
Q3 2010-0.5%
Q3 2009-0.5%
Q4 2009+1.2%
Q2 2009+1.2%
Q2 2010+1.2%

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