Core Insights - Willis Towers Watson (WTW) reported first-quarter 2025 adjusted earnings of $3.13 per share, missing the Zacks Consensus Estimate by 2.1% and remaining flat year over year [1] - The company experienced a 5% decline in adjusted consolidated revenues to $2.2 billion year over year, primarily due to the sale of TRANZACT, with a 3.9% miss against the consensus estimate [2] Financial Performance - Total costs of providing services decreased by 13% year over year to $1.8 billion, attributed to lower salaries, benefits, and other operating expenses, which was below the estimated $2 billion [3] - Adjusted operating income was $480 million, down 1% year over year, while adjusted operating margin expanded by 100 basis points to 21.6% [3] - Adjusted EBITDA was $532 million, reflecting a 3% year-over-year decline, with an adjusted EBITDA margin of 23.9%, which expanded by 60 basis points [4] Segment Performance - Health, Wealth & Career segment revenues totaled $1.1 billion, down 13% year over year, with a 12% decrease on a constant currency basis [5] - The Wealth segment saw organic revenue growth driven by increased Retirement work in Europe and International, alongside improvements in the Investments business [6] - Risk & Broking segment revenues rose by 5% year over year to $1.03 billion, matching estimates, with strong client retention and new business activity contributing to growth [7] Cash Flow and Debt Management - Cash and cash equivalents decreased by 20.2% to $1.5 billion at quarter-end, while long-term debt decreased by 10.3% to $4.7 billion [10] - Free cash outflow was $86 million, compared to $36 million in the previous year, primarily due to the absence of cash collections related to TRANZACT [11] - The company repurchased shares worth $200 million during the quarter [11] Future Guidance - WTW anticipates cash outflows related to the Transformation program, which concluded in 2024, and projects share repurchases of $1.5 billion, subject to market conditions [12] - The company expects an average annual margin expansion of 100 basis points over the next three years in the Risk & Broking segment and incremental margin expansion at the Health, Wealth & Career segment [13]

Willis Towers Watson Public Limited Company (NASDAQ:WTW) Q1 2025 Results Conference Call April 24, 2025 9:00 AM ET Company Participants Carl Hess - Chief Executive Officer Andrew Krasner - Chief Financial Officer Julie Gebauer - President of Health, Wealth & Career Lucy Clarke - President of Risk & Broking Conference Call Participants Gregory Peters - Raymond James Elyse Greenspan - Wells Fargo Rob Cox - Goldman Sachs Paul Newsome - Piper Sandler Brian Meredith - UBS David Motemaden - Evercore ISI Mark Hugh ...

Core Insights - Shares of Willis Towers Watson Public Limited Company (NASDAQ: WTW) have increased by 24% over the past year, recovering most of their losses from the post-"Liberation Day" market plunge [1] Group 1 - The company has demonstrated strong performance in the stock market, indicating a favorable risk/reward profile for investors [1]

Revenue Performance - Revenue for Q1 2025 was $2.2 billion, a decrease of $118 million, or 5%, compared to Q1 2024's $2.3 billion[127] - Organic revenue growth for Q1 2025 was 5%, driven by strong performances in both segments, despite a decrease in as-reported revenue due to the sale of the TRANZACT business[127] - The Health, Wealth & Career (HWC) segment reported revenue of $1.2 billion for Q1 2025, down 13% from $1.3 billion in Q1 2024, with organic growth of 3%[140] - R&B segment revenue for Q1 2025 was $1.0 billion, a 6% increase from $950 million in Q1 2024, with organic revenue growth of 8%[145] - Revenue for the three months ended March 31, 2025, was reported at $2,223 million, reflecting a 5% decrease compared to $2,341 million for the same period in 2024[202] - For the three months ended March 31, 2025, as-reported revenue decreased by 5% while organic revenue grew by 5%[205] Income and Profitability - Income from operations for Q1 2025 was $432 million, representing 19% of revenue, an increase from 12% in Q1 2024[126] - Net income attributable to the company for Q1 2025 was $235 million, or $2.33 per diluted share, compared to $190 million, or $1.83 per diluted share in Q1 2024[126] - Segment operating income for Q1 2025 was $226 million, up from $203 million in Q1 2024, primarily due to strong organic revenue growth and transformation savings[146] - Net income attributable to WTW for Q1 2025 was $235 million, a 24% increase from $190 million in Q1 2024[158] - Adjusted operating income for the same period was $480 million, a slight decrease from $483 million in 2024, primarily due to lower revenue from the sale of the TRANZACT business[207] - Adjusted EBITDA for the three months ended March 31, 2025, was $532 million, down from $546 million in 2024, attributed to lower revenue from the TRANZACT sale[211] - Adjusted operating income margin improved to 21.6% in 2025 from 20.6% in 2024, reflecting better core operating results despite revenue challenges[207] Costs and Expenses - Total costs of providing services for Q1 2025 were $1.791 billion, compared to $2.061 billion in Q1 2024[126] - Total costs of providing services decreased by $270 million, or 13%, to $1.8 billion in Q1 2025 from $2.1 billion in Q1 2024[147] - Salaries and benefits for Q1 2025 were $1.3 billion, representing 60% of revenue, compared to 57% in Q1 2024[148] Cash Flow and Capital Management - Cash and cash equivalents at March 31, 2025 totaled $1.5 billion, down from $1.9 billion at December 31, 2024, primarily due to share repurchases and dividend payments[166] - Cash flows used in operating activities were $35 million in Q1 2025, compared to cash flows from operating activities of $24 million in Q1 2024[169] - Cash flows used in investing activities for Q1 2025 were $84 million, compared to $74 million in Q1 2024, mainly for capital expenditures[171] - Cash flows from financing activities for Q1 2025 were $24 million, significantly lower than $1.6 billion in Q1 2024, which included substantial debt issuance[172] - Free cash flow for the three months ended March 31, 2025, was negative at $(86) million, compared to $(36) million in 2024, primarily due to the absence of cash collections related to TRANZACT[223] Debt and Equity - As of March 31, 2025, total debt was $5,310 million, with long-term debt at $4,761 million and current debt at $549 million, showing a slight increase from $5,309 million total debt on December 31, 2024[175][179] - Total shareholders' equity increased to $8,133 million as of March 31, 2025, compared to $7,940 million on December 31, 2024, resulting in a capitalization ratio of 39.5%[175] - The company had fiduciary funds of $3.8 billion as of March 31, 2025, up from $3.4 billion on December 31, 2024[179] - The board of directors approved a $1.0 billion increase to the share repurchase program, bringing the total authorization to $10.2 billion since its inception[181] Taxation - The effective tax rate for Q1 2025 was 21.5%, up from 19.9% in Q1 2024, primarily due to changes in geographical income distribution[157] - The U.S. GAAP tax rate for the three months ended March 31, 2025, was 21.5%, compared to 19.9% in 2024, influenced by changes in geographical income distribution[220] - The adjusted income tax rate for the same period was 22.7%, slightly higher than 22.3% in 2024, also affected by geographical income distribution changes[221] Strategic Focus - The company is focused on developing technology, data, and analytic solutions to enhance service delivery and meet client needs amid increasing competition[118] - The company emphasizes the importance of constant currency and organic change measures to provide transparency in performance, excluding foreign currency fluctuations and transaction-related impacts[204]

Core Insights - Willis Towers Watson (WTW) reported a revenue of $2.22 billion for Q1 2025, reflecting a year-over-year decline of 5% and an EPS of $3.13, down from $3.29 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $2.31 billion, resulting in a surprise of -3.96%, while the EPS also missed the consensus estimate of $3.20 by -2.19% [1] Revenue Breakdown - Health, Wealth and Career segment revenue was $1.17 billion, below the estimated $1.25 billion, marking a year-over-year decline of 12.8% [4] - Risk and Broking segment revenue matched the estimate at $1.03 billion, showing a year-over-year increase of 5% [4] - Total segment revenue was $2.19 billion, compared to the average estimate of $2.28 billion, indicating a year-over-year change of -5.3% [4] - Reimbursable expenses and other revenue was reported at $21 million, below the average estimate of $25.73 million, with no year-over-year change [4] Operating Income - Risk and Broking segment operating income was $226 million, exceeding the average estimate of $219.91 million [4] - Health, Wealth and Career segment operating income was $311 million, below the estimated $325.49 million [4] Stock Performance - Over the past month, shares of Willis Towers Watson have returned -3.8%, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Willis Towers Watson (WTW) reported quarterly earnings of $3.13 per share, missing the Zacks Consensus Estimate of $3.20 per share, and down from $3.29 per share a year ago, representing an earnings surprise of -2.19% [1] - The company posted revenues of $2.22 billion for the quarter, missing the Zacks Consensus Estimate by 3.96%, and down from $2.34 billion year-over-year [2] - The stock has added about 4% since the beginning of the year, contrasting with the S&P 500's decline of -8.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.72 on revenues of $2.28 billion, and for the current fiscal year, it is $16.76 on revenues of $9.77 billion [7] - The estimate revisions trend for WTW is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Insurance - Brokerage industry, to which WTW belongs, is currently in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Ryan Specialty Group, is expected to report quarterly earnings of $0.39 per share, reflecting a year-over-year change of +11.4% [9]

Core Insights - WTW reported a solid start to 2025, with results aligning with expectations and progress on strategic goals [2] - The company is focused on growth, efficiency, and margin expansion amid economic uncertainty [2] Consolidated Results - Revenue for Q1 2025 was $2.22 billion, a decrease of 5% from $2.34 billion in Q1 2024; on a constant currency basis, revenue decreased by 4%, but organic revenue grew by 5% [3][5] - Income from operations increased by 54% to $432 million, with an operating margin of 19.4%, up 740 basis points year-over-year [3][6] - Net income rose to $239 million, a 23% increase from $194 million in the prior year [3][6] - Diluted EPS increased by 27% to $2.33, while adjusted diluted EPS remained stable at $3.13 [3][6] Segment Highlights Health, Wealth & Career (HWC) - HWC segment revenue was $1.17 billion, down 13% year-over-year; however, organic growth was 3% [9][10] - Operating income decreased by 7% to $311 million, with an operating margin of 26.7%, up 160 basis points [9][10] Risk & Broking (R&B) - R&B segment revenue increased by 5% to $1.03 billion, with organic growth also at 7% [11][12] - Operating income rose by 11% to $226 million, and operating margin improved to 22.0%, up 120 basis points [11][12] Cash Flow and Capital Allocation - Cash flows used in operating activities were $(35) million, compared to $24 million in the prior year; free cash flow was $(86) million, down from $(36) million [7][8] - The company repurchased 607,221 shares for $200 million during the quarter [8] Financial Considerations - The company expects share repurchases of approximately $1.5 billion, subject to market conditions [14] - Anticipated foreign currency impact on adjusted diluted earnings per share is expected to be neutral in 2025 [14]

Revenue Performance - Revenue for Q1 2025 was $2.22 billion, a decrease of 5% compared to $2.34 billion in Q1 2024, with organic revenue growth of 5%[6] - Total revenue for the three months ended March 31, 2025, was $2,223 million, a decrease of 5% compared to $2,341 million in the same period of 2024[45] - The Health, Wealth & Career segment reported revenue of $1.17 billion, down 13% year-over-year, but achieved organic growth of 3%[10] - The Risk & Broking segment generated revenue of $1.03 billion, an increase of 5% year-over-year, with organic growth of 7%[12] - Health, Wealth & Career segment revenue was $1,158 million, down 13% from $1,327 million year-over-year, with an organic change of 3%[45] - Risk & Broking segment revenue increased by 5% to $1,027 million from $978 million, with an organic growth of 8%[45] Profitability Metrics - Net Income for Q1 2025 increased to $239 million, up 23% from $194 million in Q1 2024[7] - Diluted EPS for Q1 2025 was $2.33, reflecting a 27% increase from $1.83 in the prior year[8] - Operating Margin improved to 19.4%, up 740 basis points from 12.0% in Q1 2024[4] - Adjusted Operating Income for Q1 2025 was $480 million, a slight decrease of 1% from $483 million in Q1 2024[4] - Income from operations increased to $432 million for Q1 2025, compared to $280 million in Q1 2024, reflecting a growth of 54.3%[59] - Adjusted net income for Q1 2025 was $316 million, slightly down from $325 million in Q1 2024, indicating a decrease of 2.8%[52] - The company reported a net income attributable to WTW of $235 million for Q1 2025, up from $190 million in Q1 2024, reflecting a growth of 23.7%[59] Cash Flow and Liquidity - Free cash flow for Q1 2025 was $(86) million, a decrease of $50 million compared to $(36) million in Q1 2024, primarily due to the sale of TRANZACT[9] - Free cash flow for the three months ended March 31, 2025, was negative at $(86) million, compared to $(36) million in the same period of 2024[57] - Net cash used in operating activities was $(35) million in 2025, compared to $24 million in 2024, indicating a significant decline in cash flow from operations[63] - Net cash used in investing activities increased to $(84) million in 2025 from $(74) million in 2024, showing a rise of 13.5% in cash outflow for investments[63] - Net cash from financing activities was $24 million in 2025, a decrease from $1,556 million in 2024, indicating a substantial reduction in financing cash flow[63] - Total cash, cash equivalents, and restricted cash at the end of the period was $4,983 million, down from $5,251 million in the previous year, reflecting a decrease of 5.1%[65] Assets and Liabilities - Total assets as of March 31, 2025, were $28,064 million, an increase from $27,681 million as of December 31, 2024[60] - Total liabilities increased to $19,850 million as of March 31, 2025, compared to $19,664 million at the end of 2024[60] Taxation - The U.S. GAAP tax rate for Q1 2025 was 21.5%, compared to 19.9% in Q1 2024, indicating an increase in the effective tax rate[56] - Adjusted income tax rate is calculated based on adjusted income before taxes, providing a more accurate reflection of the tax rate incurred[33] Strategic Outlook - The company anticipates future growth driven by strategic acquisitions and ongoing operational transformation initiatives[37] - The company faces significant risks including economic conditions, regulatory changes, and competition that could impact future performance[38] Shareholder Activities - The company plans to repurchase approximately $1.5 billion in shares, subject to market conditions[15] - The company repurchased shares worth $200 million in 2025, up from $101 million in 2024, representing a 98% increase in share repurchase activity[63]

Core Viewpoint - Willis has appointed Harry Merker as the new Property and Casualty (P&C) Cross Industry Sales Leader and Alternative Asset Insurance Solutions (AAIS) Sales, Strategy and Execution Leader for North America, aiming to enhance broking growth and strategic sales initiatives across its P&C business and AAIS verticals [1][2]. Group 1: Appointment and Role - Harry Merker will drive broking growth initiatives and lead strategic sales efforts across 12 industry verticals within Willis' P&C business [2]. - In his dual role, Merker will oversee the go-to-market strategy for the AAIS vertical, managing carrier relationships, product development, and market-facing content [2][3]. Group 2: Responsibilities and Collaboration - Merker will focus on sales pipeline engagement, support RFP execution, and collaborate with sales leaders to implement best practices across the P&C and AAIS Broking business [3]. - He will lead cross-selling efforts to connect clients with Willis' broader capabilities and specialized expertise [3]. Group 3: Experience and Background - Merker brings 20 years of experience in commercial insurance and broking, with a proven track record in developing tailored solutions for various industry sectors [4]. - Prior to joining Willis, he served as Chief Broking Officer – Middle Market at Aon, demonstrating significant leadership in the insurance sector [4]. Group 4: Strategic Importance - Aartie Manansingh emphasized the importance of recruiting differentiated talent to achieve market-leading outcomes, highlighting Merker's strategic insight and market expertise as key to enhancing tailored solutions for alternative asset clients [5].

Core Insights - Willis has appointed Harry Merker as the new Property and Casualty (P&C) Cross Industry Sales Leader and Alternative Asset Insurance Solutions (AAIS) Sales, Strategy and Execution Leader for North America [1][2] Group 1: Role and Responsibilities - In his dual role, Merker will drive broking growth initiatives across Willis' P&C business and lead strategic broking sales efforts across 12 industry verticals [2] - He will oversee the go-to-market strategy for the AAIS vertical, managing carrier relationships, product development, and market-facing content delivery [2][3] - Merker will enhance sales pipeline engagement, support RFP execution, and collaborate with sales leaders to scale best practices in the P&C and AAIS Broking business [3] Group 2: Experience and Background - Merker brings 20 years of experience in commercial insurance and broking, with a strong background in risk management and tailored client solutions [4] - He previously served as Chief Broking Officer – Middle Market at Aon, leading the East and South Region [4] - Based in New York, he will report to Aartie Manansingh and be part of the Property and Casualty Leadership Team [4] Group 3: Strategic Importance - Manansingh emphasized the importance of recruiting differentiated talent to achieve market-leading outcomes for clients, highlighting Merker's strategic insight and market expertise [5]