Professional services firm Marsh & McLennan (NYSE: MMC) met Wall Streets revenue expectations in Q3 CY2025, with sales up 11.5% year on year to $6.35 billion. Its non-GAAP profit of $1.85 per share was 4.1% above analysts’ consensus estimates.

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John Doyle, President and CEO, said: "Our third quarter results were solid and tracked with expectations. Overall, we generated 11% revenue growth, or 4% on an underlying basis, as well as 13% growth in adjusted operating income and 11% growth in adjusted EPS."

Company Overview

With roots dating back to 1871 and a presence in over 130 countries, Marsh & McLennan (NYSE: MMC) is a global professional services firm that helps organizations manage risk, strategy, and workforce challenges through its four specialized businesses.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $26.45 billion in revenue over the past 12 months, Marsh & McLennan is a behemoth in the business services sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices.

As you can see below, Marsh & McLennan grew its sales at an impressive 9.2% compounded annual growth rate over the last five years. This is an encouraging starting point for our analysis because it shows Marsh & McLennan’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Marsh & McLennan’s annualized revenue growth of 9.1% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Marsh & McLennan’s organic revenue averaged 5.8% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Marsh & McLennan’s year-on-year revenue growth was 11.5%, and its $6.35 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.6% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is satisfactory given its scale and implies the market is baking in success for its products and services.

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Adjusted Operating Margin

Marsh & McLennan has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average adjusted operating margin of 25.7%.

Analyzing the trend in its profitability, Marsh & McLennan’s adjusted operating margin rose by 2.9 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q3, Marsh & McLennan generated an adjusted operating margin profit margin of 22.7%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Marsh & McLennan’s EPS grew at a spectacular 13.8% compounded annual growth rate over the last five years, higher than its 9.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Marsh & McLennan’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Marsh & McLennan’s adjusted operating margin was flat this quarter but expanded by 2.9 percentage points over the last five years. On top of that, its share count shrank by 3.3%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Marsh & McLennan, its two-year annual EPS growth of 10.6% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.

In Q3, Marsh & McLennan reported adjusted EPS of $1.85, up from $1.63 in the same quarter last year. This print beat analysts’ estimates by 4.1%. Over the next 12 months, Wall Street expects Marsh & McLennan’s full-year EPS of $9.50 to grow 6.4%.

Key Takeaways from Marsh & McLennan’s Q3 Results

It was good to see Marsh & McLennan beat analysts’ EPS expectations this quarter. Overall, this print had some key positives. The stock remained flat at $185.82 immediately following the results.

Is Marsh & McLennan an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.