Marsh McLennan (MRSH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 6% year-over-year to $6.2 billion, with net income of $1.1 billion and diluted EPS up 10% to $2.27; first half 2024 revenue reached $12.7 billion, up 8% year-over-year.

• Adjusted operating income rose 11% to $1.7 billion in Q2, with adjusted EPS up 10% to $2.41 and operating margin expanding by 130 basis points to 29%.

• Announced a 15% increase in quarterly dividend to $0.815 per share and completed $300 million in Q2 share repurchases, totaling $600 million year-to-date.

• Multiple acquisitions completed in both Risk & Insurance Services and Consulting, including Cardano, Veritas Total Solutions, and Fisher Brown Bottrell Insurance.

• Continued investment in innovation and talent, launching new digital and analytics solutions and focusing on ESG, cyber risk, and climate resilience.

Financial highlights

• Q2 2024 consolidated revenue: $6.2B (+6% YoY); H1 2024: $12.7B (+8% YoY); Q2 net income: $1.1B; H1 net income: $2.5B.

• Q2 adjusted operating margin: 29% (up 130 bps); Q2 GAAP EPS: $2.27, adjusted EPS: $2.41 (up 10%).

• Six-month adjusted operating income: $3.7B (up 11% YoY); six-month adjusted EPS: $5.30 (up 12% YoY).

• Operating cash flow for H1 2024 was $434M, down from $665M in H1 2023.

• Free cash flow for LTM 2Q24 reached $3.6B, with a 17% CAGR since 2010.

Outlook and guidance

• Expecting mid-single-digit or better underlying revenue growth, margin expansion, and strong adjusted EPS growth for full year 2024, assuming current macro conditions persist.

• Margin expansion in the second half of 2024 is expected to be better than the first half.

• Adjusted effective tax rate for 2024 projected between 25.5% and 26.5%.

• Management expects strong positioning for the remainder of 2024, citing robust first-half results and continued investments.