Why did GAAP EPS decline while adjusted EPS grew?

GAAP diluted EPS fell 3% to $2.58 because the prior-year quarter included a $88 million gain from deferred consideration tied to a 2017 divestiture, which is excluded from adjusted results. GAAP results also carried a higher effective tax rate of 22.0% versus 15.5%, driven by geographic income mix and unfavorable discrete items. Adjusted EPS excludes amortization of intangibles, Aon United restructuring costs, integration costs, and other noteworthy items, and rose 9% to $3.81.

Why did free cash flow drop so sharply in the quarter?

Operating cash flow fell 30% to $556 million in Q2 from $796 million a year earlier. The filing attributes the year-to-date result to a cash tax payment related to NFP Wealth and working capital changes; receivables rose $1.18 billion in the first half. Capital expenditures also increased 14% in the quarter. First-half free cash flow still grew 4% to $846 million, so the decline is concentrated in Q2 timing.

How are the divestitures affecting reported growth?

Divestitures reduced total revenue growth by about 4 percentage points in Q2, mainly from the sale of the NFP Wealth business and Stroz Friedberg. Wealth Solutions revenue fell 18% to $426 million, with a 24% divestiture impact, even though its organic growth was 5%. Divestitures also lowered expenses, which is part of why operating margin improved despite the smaller revenue base.

How much capital is Aon returning, and how much capacity remains?

In Q2, Aon repurchased 1.9 million shares for about $600 million and paid $175 million in dividends. Management says the repurchases already exceed its full-year objective of at least $1 billion. As of June 30, 2026, approximately $7.7 billion remained under the share repurchase authorization. Cash and short-term investments on the balance sheet totaled about $1.3 billion excluding fiduciary funds, and total debt was about $15.0 billion, down from $15.2 billion at year-end 2025.

AON 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed July 29, 2026. Cited figures are marked; the original filing is the authoritative source.

Aon reported second-quarter 2026 results with total revenue up 2% to $4.2 billion^a, driven by 5% organic growth, a 1% favorable currency impact, and a 4% headwind from divestitures, mainly the NFP Wealth sale and Stroz Friedberg.

Risk Capital revenue rose 5% to $3.0 billion^b, while Human Capital fell 4% to $1.2 billion. Operating margin expanded 80 basis points to 21.5%, and adjusted operating margin rose 70 basis points to 28.9%. Diluted EPS declined 3% to $2.58 on a GAAP basis, but adjusted EPS grew 9% to $3.81.

The gap reflects non-GAAP adjustments, a higher GAAP effective tax rate (22.0% vs. 15.5%), and a 2% reduction in diluted share count to 213.9 million. Cash generation weakened in the quarter. Operating cash flow fell 30% to $556 million^c and free cash flow fell 34% to $483 million, although first-half free cash flow still grew 4% to $846 million.

Aon returned $775 million^d to shareholders in Q2, including $600 million of buybacks, which the company says already exceeds its full-year repurchase objective of at least $1 billion. Remaining authorization stood at about $7.7 billion as of June 30, 2026. Management reaffirmed full-year 2026 guidance for mid-single-digit or greater organic growth, 70-80 basis points of adjusted operating margin expansion, strong adjusted EPS growth, and double-digit free cash flow growth.

For investors, the quarter shows steady organic growth and margin progress, supported by cost savings and capital returns. The main watch items are the reported decline in free cash flow, the continued revenue drag from divestitures, and whether the full-year free cash flow guidance can be met after a weaker second quarter. Currency is expected to be a modest tailwind of about $0.42 per share to 2026 adjusted EPS if rates hold.

02—Key points

Key Highlights

Total revenue rose 2% to $4,246 million, with 5% organic growth offset by a 4% drag from divestitures, mainly NFP Wealth and Stroz Friedberg.
Operating margin expanded 80 basis points to 21.5%, and adjusted operating margin rose 70 basis points to 28.9%, driven by organic growth, ABS scale benefits, and net restructuring savings.
Adjusted diluted EPS grew 9% to $3.81, while GAAP diluted EPS fell 3% to $2.58 as non-GAAP adjustments and a higher effective tax rate (22.0% vs. 15.5%) weighed on GAAP results.
Free cash flow fell 34% to $483 million in Q2, as operating cash flow declined 30% to $556 million, though first-half free cash flow grew 4% to $846 million.
Aon returned $775 million to shareholders in Q2, including $600 million of share repurchases and $175 million of dividends, and ended the quarter with about $7.7 billion of remaining buyback authorization.
Diluted share count declined 2% to 213.9 million, supporting per-share growth.
2026 guidance was reaffirmed: mid-single-digit or greater organic growth, 70-80 bps of adjusted operating margin expansion, strong adjusted EPS growth, and double-digit free cash flow growth.

03—Questions

Frequently Asked Questions

Why did GAAP EPS decline while adjusted EPS grew?
GAAP diluted EPS fell 3% to $2.58 because the prior-year quarter included a $88 million gain from deferred consideration tied to a 2017 divestiture, which is excluded from adjusted results. GAAP results also carried a higher effective tax rate of 22.0% versus 15.5%, driven by geographic income mix and unfavorable discrete items. Adjusted EPS excludes amortization of intangibles, Aon United restructuring costs, integration costs, and other noteworthy items, and rose 9% to $3.81.
Why did free cash flow drop so sharply in the quarter?
Operating cash flow fell 30% to $556 million in Q2 from $796 million a year earlier. The filing attributes the year-to-date result to a cash tax payment related to NFP Wealth and working capital changes; receivables rose $1.18 billion in the first half. Capital expenditures also increased 14% in the quarter. First-half free cash flow still grew 4% to $846 million, so the decline is concentrated in Q2 timing.
How are the divestitures affecting reported growth?
Divestitures reduced total revenue growth by about 4 percentage points in Q2, mainly from the sale of the NFP Wealth business and Stroz Friedberg. Wealth Solutions revenue fell 18% to $426 million, with a 24% divestiture impact, even though its organic growth was 5%. Divestitures also lowered expenses, which is part of why operating margin improved despite the smaller revenue base.
How much capital is Aon returning, and how much capacity remains?
In Q2, Aon repurchased 1.9 million shares for about $600 million and paid $175 million in dividends. Management says the repurchases already exceed its full-year objective of at least $1 billion. As of June 30, 2026, approximately $7.7 billion remained under the share repurchase authorization. Cash and short-term investments on the balance sheet totaled about $1.3 billion excluding fiduciary funds, and total debt was about $15.0 billion, down from $15.2 billion at year-end 2025.

04—Continue

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