Revenue Performance - Revenue for the three months ended September 30, 2025, was $2.288 billion, a decrease of $1 million compared to the same period in 2024, with organic revenue growth of 5%[141] - For the nine months ended September 30, 2025, revenue was $6.772 billion, down $123 million or 2% from $6.895 billion in 2024, with organic revenue growth also at 5%[141] - HWC segment revenue for the three months ended September 30, 2025 was $1.261 billion, a decrease of 5% compared to $1.328 billion in 2024, with organic revenue growth of 4%[154] - R&B segment revenue for the three months ended September 30, 2025 was $1.007 billion, a 7% increase from $940 million in 2024, with organic revenue growth of 6%[161] - HWC segment revenue for the nine months ended September 30, 2025 was $3.606 billion, an 8% decrease from $3.924 billion in 2024, with organic revenue growth of 4%[157] - R&B segment revenue for the nine months ended September 30, 2025 was $3.081 billion, a 6% increase from $2.897 billion in 2024, with organic revenue growth of 6%[164] - The company reported a constant currency revenue change of 5% for the three months ended September 30, 2025, compared to the same period in 2024[228] - For the nine months ended September 30, 2025, reported revenue decreased by $123 million, or 2%, while organic revenue grew by 5%[232] Income and Profitability - Income from operations for the three months ended September 30, 2025, was $418 million, compared to a loss of $766 million in the same period of 2024[140] - Net income attributable to WTW for the three months ended September 30, 2025, was $304 million, a decrease of 73% from $1.134 billion in 2024[140] - Income from operations for the nine months ended September 30, 2025 was $1.2 billion, an increase of $1.5 billion compared to a loss of $274 million for the same period in 2024[177] - Net income attributable to WTW for the nine months ended September 30, 2025 was $870 million, an increase of $2.2 billion compared to a net loss of $1.3 billion for the same period in 2024[183] - Adjusted operating income for the three months ended September 30, 2025, increased to $467 million from $414 million for the same period in 2024[236] - Adjusted EBITDA for the three months ended September 30, 2025, was $515 million, compared to $479 million for the same period in 2024[240] - Adjusted diluted earnings per share for the three months ended September 30, 2025, increased to $3.07 from $2.77 in the prior year[243] - The net income margin for the three months ended September 30, 2025, was 13.4%, compared to a loss margin of (73.0)% in the prior year[239] Costs and Expenses - Total costs of providing services for the three months ended September 30, 2025, were $1.870 billion, compared to $3.055 billion in 2024, reflecting a significant reduction in impairment costs[140] - Salaries and benefits for the three months ended September 30, 2025 were $1.4 billion, an increase of 1% from $1.383 billion in 2024, representing 62% of revenue[167] - Other operating expenses for the three months ended September 30, 2025 decreased to $352 million from $419 million in 2024, a reduction of 16%[169] - Total costs of providing services for the three months ended September 30, 2025 were $1.9 billion, a decrease of 39% from $3.1 billion in 2024[166] Cash Flow and Financing - Cash flows from operating activities were $1.0 billion for the nine months ended September 30, 2025, compared to $913 million for the same period in 2024[195] - Cash flows from investing activities for the nine months ended September 30, 2025 were $530 million, compared to cash flows used in investing activities of $230 million for the same period in 2024[197] - Cash flows used in financing activities for the nine months ended September 30, 2025 were $1.3 billion, including share repurchases of $1.3 billion and dividend payments of $269 million[199] - The company repurchased $1.3 billion of outstanding shares during the nine months ended September 30, 2025, with authorization to repurchase an additional $1.6 billion[187] - Total cash dividends paid during the nine months ended September 30, 2025, amounted to $269 million, with a quarterly cash dividend of $0.92 per share approved in August 2025[211] - Free cash flow for the nine months ended September 30, 2025, increased to $838 million from $724 million in 2024, driven by operating margin expansion[255] Debt and Capitalization - Total debt as of September 30, 2025 was $5.313 billion, with long-term debt of $4.763 billion and current debt of $550 million[201] - The capitalization ratio at September 30, 2025 was 40.7%, compared to 40.1% at December 31, 2024[201] - The board of directors approved a total increase of $2.5 billion to the existing share repurchase program, bringing the total authorization to $11.7 billion since April 20, 2016[208] - As of September 30, 2025, approximately $1.6 billion remained on the current repurchase authority, with a maximum of 4,752,506 shares eligible for repurchase at a closing price of $345.45[209] Economic Environment and Market Conditions - The company experienced a softening market, which generally leads to downward pressure on commission revenue and can adversely impact revenue and operating margins[130] - The ongoing economic environment includes uncertainties such as inflation, interest rate fluctuations, and geopolitical tensions, which could negatively affect business operations and financial conditions[135] Taxation - The effective tax rate for the nine months ended September 30, 2025 was 12.0%, compared to 15.6% for the same period in 2024[181] - The U.S. GAAP tax rate for Q3 2025 was 19.7%, up from 16.1% in Q3 2024, while the nine-month rates were 12.0% and 15.6% respectively[252] - Adjusted income tax rates for Q3 2025 were 22.4%, compared to 19.7% in Q3 2024, reflecting a higher rate due to geographical profit distribution[253] - The adjusted income taxes for the nine months ended September 30, 2025, were $247 million, compared to $235 million in 2024[250] Strategic Focus - The company is focused on developing technology, data, and analytic solutions to enhance service quality and meet client needs amid increased competition[132] - The company experienced lower marketing expenses and decreased office and technology expenses, contributing to improved adjusted operating income[236] Non-GAAP Measures - Non-GAAP measures are used to provide a clearer picture of the company's core operating results, including adjusted operating income and free cash flow[221]

Financial Data and Key Metrics Changes - In Q3 2025, the company achieved 5% organic growth, with adjusted EPS of $3.07, reflecting an 11% year-over-year increase [4][15] - Adjusted operating margin expanded by 230 basis points year-over-year to 20% [15][26] - Free cash flow for the nine months ending September 30, 2025, was $838 million, an increase of $114 million from the prior year [28] Business Line Data and Key Metrics Changes - Health, Wealth & Career (HWC) revenue grew 4% year-over-year, with 5% growth when excluding book of business settlement activity and interest income [16][20] - The Health segment achieved 7% growth, or 8% excluding certain impacts, driven by strong performance in International and North America [17] - Risk and Broking (R&B) reported 6% organic growth, marking the 11th consecutive quarter of high single-digit growth when excluding specific impacts [8][21] Market Data and Key Metrics Changes - The company noted headwinds from declining rates in certain segments of the commercial insurance market across various geographies [6][22] - Pricing pressure was particularly noted in property insurance, with most lines showing softening except for North American Casualty, where pricing continues to rise [42][81] Company Strategy and Development Direction - The company continues to focus on its specialization strategy, investments in talent, data, and technology to drive sustainable growth [21][60] - The strategy aims to enhance efficiency and optimize the portfolio, which has been effective despite macroeconomic volatility [5][29] - The company is committed to delivering 100 basis points of average annual adjusted operating margin expansion over the next three years [24][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit organic growth and margin expansion for 2025, despite challenges in the current pricing environment [29][60] - The company anticipates strong demand across its global business driven by healthcare inflation and employers' focus on managing costs [17][68] Other Important Information - The divestiture of TRANZACT is expected to create a headwind to adjusted diluted earnings per share of $1.14 for the full year 2025 [15] - The company returned $690 million to shareholders via share repurchases and dividends during the quarter [28] Q&A Session Summary Question: Insights on Risk and Broking organic revenue results - Management noted that the 6% growth in Risk and Broking was supported by strong new business across global markets and specialty lines, with project-based placements contributing to growth [31][34] Question: Concerns about margin expansion in Risk and Broking - Management reaffirmed commitment to achieving 100 basis points of margin improvement annually, driven by technology investments and process improvements [36][37] Question: Expectations for free cash flow in the fourth quarter - Management indicated confidence in delivering free cash flow margin expansion, supported by reduced transformation costs and the divestiture of TRANZACT [39][40] Question: Impact of insurance pricing headwinds - Management acknowledged ongoing pricing pressure, particularly in property insurance, but maintained expectations for mid to high single-digit organic revenue growth in Risk and Broking [42][43] Question: HWC margins and future outlook - Management highlighted consistent margin improvement in HWC, driven by disciplined resource management and process optimization [45][46] Question: Prospects for BD&O growth - Management expressed confidence in BD&O growth due to the timing of revenue generation, particularly during the Medicare enrollment period [48][49] Question: Talent acquisition and retention - Management emphasized the company's ability to attract and retain top talent, which is crucial for driving organic growth [54][56]

Financial Data and Key Metrics Changes - The company achieved 5% organic growth in Q3 2025, with adjusted EPS of $3.07, reflecting an 11% year-over-year increase [4][15] - Adjusted operating margin expanded by 230 basis points year-over-year to 20.4% [15][26] - Free cash flow for the nine months ending September 30, 2025, was $838 million, an increase of $114 million from the prior year [27][28] Business Line Data and Key Metrics Changes - Health, Wealth & Career (HWC) revenue grew 4% year-over-year, with 5% growth when excluding book of business settlement activity and interest income [16][20] - The Health segment achieved 7% growth, or 8% excluding certain impacts, driven by strong performance in International and North America [17][20] - Risk and Broking (R&B) reported 6% organic growth, with Corporate Risk & Broking (CRB) also growing 6%, or 7% when excluding specific activities [21][24] Market Data and Key Metrics Changes - The company noted headwinds from declining rates in certain segments of the commercial insurance market [6][5] - Pricing pressure was particularly noted in the property insurance sector, with expectations of mid to high single-digit organic revenue growth despite these challenges [42][43] Company Strategy and Development Direction - The company continues to focus on its specialization strategy and investments in technology to drive sustainable growth [21][24] - The strategy aims to enhance efficiency and optimize the portfolio, which has been effective despite a volatile macroeconomic environment [5][4] - The company is committed to delivering 100 basis points of average annual adjusted operating margin expansion over the next three years [24][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit organic growth and margin expansion for the full year 2025 [29][15] - The company is monitoring economic indicators such as employment levels, which may impact business prospects [5][6] - There is a strong pipeline for the remainder of the year, particularly in the Health segment, driven by healthcare inflation and employers' focus on managing costs [17][69] Other Important Information - The divestiture of TRANZACT is expected to create a headwind to adjusted diluted earnings per share of $1.14 for the full year 2025 [15][26] - The company returned $690 million to shareholders through share repurchases and dividends [28][29] Q&A Session Summary Question: Insights on Risk and Broking organic revenue results - Management noted that the 6% growth in R&B was supported by strong new business across global markets, particularly in construction and credit risk solutions [32][34] Question: Concerns about margin expansion in Risk and Broking - Management remains committed to achieving 100 basis points of margin improvement annually, driven by investments in technology and process improvements [37] Question: Expectations for free cash flow in the fourth quarter - The company anticipates continued free cash flow margin expansion, supported by the divestiture of TRANZACT and reduced transformation costs [40] Question: Impact of insurance pricing headwinds - Pricing pressure has been significant in property insurance, but the company expects to maintain mid to high single-digit organic revenue growth in Risk and Broking [42][43] Question: HWC margins and future expectations - HWC margins improved significantly in Q3, and management is confident in sustaining this performance through disciplined resource management and process optimization [46][47] Question: Confidence in BD&O growth - BD&O is expected to see strong growth in Q4 due to the timing of commissions and new client implementations [48] Question: Interest income levels and sustainability - Interest income levels are influenced by geographic cash balances, and while there are no one-time factors, the company expects healthy interest income moving forward [50] Question: Talent acquisition and retention - The company is successfully attracting and retaining top talent, which is crucial for driving organic growth [54][55] Question: Long-term growth prospects in Wealth - The Wealth segment is expected to grow steadily, supported by new client acquisitions and project work [71][74]

Financial Data and Key Metrics Changes - In Q3 2025, the company achieved 5% organic growth and expanded adjusted operating margin by 230 basis points to 20% [15][20] - Adjusted EPS was $3.07, reflecting an 11% year-over-year increase [3][15] - Free cash flow for the nine months ending September 30, 2025, was $838 million, an increase of $114 million from the prior year [26][28] Business Line Data and Key Metrics Changes - Health, Wealth & Career (HWC) revenue grew 4% year-over-year, with 5% growth when excluding book of business settlement activity and interest income [16][20] - The Health segment achieved 7% growth, driven by strong performance in International and North America [17][20] - Risk and Broking (R&B) reported 6% organic growth, with Corporate Risk & Broking (CRB) growing 6% or 7% when excluding book of business activity and interest income [21][24] Market Data and Key Metrics Changes - The company noted headwinds from declining rates in certain segments of the commercial insurance market across various geographies [4][22] - Pricing pressure has continued in certain areas, particularly in property insurance, but the company expects mid to high single-digit organic revenue growth in Risk and Broking despite these challenges [42][76] Company Strategy and Development Direction - The company is focused on accelerating performance, enhancing efficiency, and optimizing its portfolio to drive value for stakeholders [4][29] - Investments in digital tools, AI, and automation are seen as key to capturing growth opportunities and creating efficiencies [8][29] - The company aims for 100 basis points of average annual adjusted operating margin expansion over the next three years [24][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on 2025 financial objectives, including mid-single-digit organic growth and adjusted operating margin expansion [29] - The macroeconomic environment presents both opportunities and challenges, with concerns about global trade, inflation, and geopolitical conditions [4][29] - The company anticipates strong demand across its global business driven by healthcare inflation and employers' focus on managing costs [17][29] Other Important Information - The company returned $690 million to shareholders through share repurchases and dividends [28] - The divestiture of TRANZACT is expected to create a headwind to adjusted diluted earnings per share of $1.14 for the full year 2025 [15][26] Q&A Session Summary Question: Insights on Risk and Broking organic revenue results - Management noted that the 6% growth in R&B was supported by strong new business across global markets and specialty lines, with project-based placements contributing to growth [31][35] Question: Expectations for free cash flow - The company confirmed confidence in delivering free cash flow margin expansion, driven by operating margin improvements and reduced transformation costs [39][41] Question: Insurance pricing headwinds - Management indicated that pricing pressure is most significant in property insurance, but they expect mid to high single-digit organic revenue growth in Risk and Broking despite these developments [42][43] Question: HWC margins and future expectations - Management reiterated commitment to incremental margin improvement in HWC, with a focus on process optimization and resource management [45][49] Question: BD&O business growth expectations - The company expects BD&O to generate nearly half of its revenue in the fourth quarter, driven by new client implementations and the timing of commissions [51][52] Question: Interest income levels - Management clarified that interest income levels are influenced by geographic cash balances and interest rates, with no specific one-time factors affecting current results [54][55]

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may face access issues if ad-blockers are enabled, suggesting the need to disable them for a better experience [1]

WTW Earnings Release Supplemental Materials 2025 Third Quarter Financial Results October 30, 2025 wtwco.com © 2025 WTW. All rights reserved. WTW Forward-Looking Statements This document contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future resul ...

分组1 - Willis Towers Watson reported quarterly earnings of $3.07 per share, exceeding the Zacks Consensus Estimate of $3 per share, and showing an increase from $2.93 per share a year ago, resulting in an earnings surprise of +2.33% [1] - The company posted revenues of $2.29 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.53%, with year-ago revenues also at $2.29 billion [2] - Over the last four quarters, Willis Towers Watson has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] 分组2 - The stock has added about 1.4% since the beginning of the year, underperforming the S&P 500's gain of 17.2% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is $7.93 on $2.87 billion in revenues, and for the current fiscal year, it is $16.83 on $9.63 billion in revenues [7] 分组3 - The Zacks Industry Rank indicates that the Insurance - Brokerage sector is currently in the top 33% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Willis Towers Watson was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Revenue Performance - Revenue for Q3 2025 was $2.29 billion, flat compared to Q3 2024, with organic growth of 5%[4] - Total revenue for the three months ended September 30, 2024, was $2,288 million, showing a 0% change compared to the previous year[47] - Revenue for Q3 2025 was $2,288 million, slightly down from $2,289 million in Q3 2024[69] - Revenue for the Health, Wealth & Career segment was $3,584 million for the nine months ended September 30, 2025, down 8% from $3,898 million in 2024[49] - Risk & Broking segment revenue increased by 7% to $3,008 million for the nine months ended September 30, 2025, compared to $2,811 million in 2024[49] - Total segment revenue for the company decreased by 2% to $6,772 million for the nine months ended September 30, 2025, from $6,895 million in 2024[49] - The Health, Wealth & Career segment reported revenue of $1.26 billion, a decrease of 5% year-over-year, but achieved organic growth of 4%[12] - The Risk & Broking segment had revenue of $1.01 billion, an increase of 7% year-over-year, with organic growth of 6%[14] Profitability Metrics - Net Income for Q3 2025 was $306 million, a significant recovery from a net loss of $1.67 billion in Q3 2024[8] - Adjusted Diluted EPS for Q3 2025 was $3.07, up 11% from $2.77 in the prior year[4] - Operating Margin for Q3 2025 was 18.3%, with an adjusted operating margin of 20.4%, an increase of 230 basis points year-over-year[4] - Adjusted operating income for Q3 2025 was $467 million, with a margin of 20.4%, compared to $414 million and 18.1% in Q3 2024[63] - The Health, Wealth & Career segment's operating margin improved to 26.4% for the nine months ended September 30, 2025, from 24.0% in 2024[54] - The Risk & Broking segment's operating margin increased to 20.7% for the nine months ended September 30, 2025, compared to 19.8% in 2024[54] - Adjusted EBITDA for the nine months ended September 30, 2025, was $1,517 million with a margin of 22.4%, compared to $1,470 million and 21.3% in the same period of 2024[62] Cash Flow and Capital Management - Cash flows from operating activities for the nine months ended September 30, 2025, were $1.0 billion, up from $913 million in the prior year[11] - Free cash flow for the nine months ended September 30, 2025, was $838 million, an increase of $114 million from the prior year[11] - Free Cash Flow is defined as cash flows from operating activities less cash used to purchase fixed assets and software, reflecting core operating performance[36] - The company reported a net gain of $870 million from the sale of operations in 2025, with no comparable figure in 2024[76] - The company repurchased shares worth $1,300 million in 2025, compared to $506 million in 2024, indicating a substantial increase in share repurchase activity[76] - The company expects share repurchases of approximately $1.5 billion in 2025, subject to market conditions[17] Financial Position - Total assets as of September 30, 2025, were $27,439 million, a slight decrease from $27,681 million at the end of 2024[72] - The company reported a decrease in total liabilities to $19,629 million in 2025 from $19,664 million in 2024, a reduction of approximately 0.2%[73] - The total equity for the company decreased to $7,810 million in 2025 from $8,017 million in 2024, representing a decline of about 2.6%[73] - Cash and cash equivalents as of September 30, 2025, were $1,895 million, a slight increase from $1,890 million at the end of 2024[72] - The company’s cash and cash equivalents increased to $1,895 million in 2025 from $1,372 million in 2024, reflecting a growth of 38.2%[77] - Total cash, cash equivalents, and restricted cash at the end of the period was $5,423 million, up from $4,712 million in 2024, reflecting an increase of 15%[77] Risks and Future Outlook - The company faces risks related to changes in economic conditions, competition, and regulatory environments that could impact financial performance[41] - Forward-looking statements indicate potential impacts from global events and strategic initiatives, with actual results subject to significant uncertainties[39] - A foreign currency tailwind is expected to positively impact adjusted diluted EPS by approximately $0.15 in Q4 2025[17] - The company anticipates future capital expenditures and ongoing working capital efforts as part of its growth strategy[39] - Management emphasizes the importance of free cash flow generation and adjusted earnings per share in achieving financial goals[40] Impairment and Restructuring - The company experienced a significant reduction in impairment charges, with no impairment reported for the nine months ended September 30, 2025, compared to $1,042 million in 2024[56] - The company incurred restructuring costs of $0 in Q3 2025, down from $8 million in Q3 2024[63]

Core Insights - WTW reported strong financial results for Q3 2025, with solid revenue performance, operating margin expansion, and earnings per share growth, despite macroeconomic uncertainties [2][3][6] Consolidated Results - Revenue for Q3 2025 was $2.288 billion, flat compared to $2.289 billion in Q3 2024, with organic revenue growth of 5% [3][6] - Net income for Q3 2025 was $306 million, a significant recovery from a net loss of $1.672 billion in the prior year [3][7] - Adjusted diluted EPS increased by 11% to $3.07 from $2.77 in the previous year [3][8] - Operating margin improved to 18.3% from a negative 33.5% in Q3 2024, with adjusted operating margin at 20.4%, up 230 basis points [3][8] Segment Performance Health, Wealth & Career (HWC) - HWC segment revenue was $1.261 billion, down 5% year-over-year, but showed organic growth of 4% [10][11] - Operating income in the HWC segment increased by 10% to $361 million, with operating margin rising to 28.6% [10][11] Risk & Broking (R&B) - R&B segment revenue reached $1.007 billion, up 7% year-over-year, with organic growth of 6% [12][13] - Operating income for the R&B segment increased by 11% to $189 million, maintaining an operating margin of 18.8% [12][13] Cash Flow and Capital Allocation - Cash flows from operating activities for the nine months ended September 30, 2025, were $1.0 billion, up from $913 million in the prior year [8][9] - Free cash flow for the same period increased to $838 million from $724 million [8][9] - The company repurchased 1,848,098 shares for $600 million during the quarter [9] Financial Considerations - The company expects share repurchases of approximately $1.5 billion, subject to market conditions [17] - Anticipated foreign currency tailwinds on adjusted diluted EPS of about $0.15 in Q4 2025 [17]

Core Insights - Nearly half of organizations believe that optimizing performance management could boost productivity by at least 10% [2] - A significant number of organizations are integrating AI and skills into their performance management processes to enhance effectiveness [4][5] Performance Management Optimization - 39% of organizations report that their performance management processes effectively meet employee expectations for clear goals, regular feedback, and fair ratings [2] - Only 20% of organizations find managers effective in providing coaching and feedback, highlighting a gap in managerial capabilities [3] AI Integration - 37% of organizations are currently using AI in performance management, with goal setting (44%) and development plans (40%) being the most common applications [4] - A similar percentage of organizations are considering the adoption of AI to improve performance management processes [4] Skills Integration - 54% of organizations have incorporated skills into their performance management, primarily for learning and development (78%) and goal setting (40%) [5] - Only 18% of organizations utilize skills for pay decisions, indicating a potential area for growth [5] Performance Ratings - Approximately 45% of organizations use a five-point rating scale, with over half either having changed or considering changes to their rating scales [6] - Organizations are seeking simplification and fairness in performance ratings to enhance differentiation [6] Pay for Performance - High-performing employees receive merit increases that are more than twice as large compared to average performers at one-third of organizations [8] - The primary reasons for implementing pay for performance include rewarding high performers (68%) and motivating employees (53%) [8] Research Methodology - The findings are based on the 2025 Performance Management and Pay for Performance Virtual Focus Groups, which included 280 registrants for performance management and 208 for pay for performance [10]