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Willis Towers Q1 Earnings Miss Estimates, Revenues Decline Y/Y
WTWWillis Towers Watson(WTW) ZACKS·2025-04-25 13:30

Core Insights - Willis Towers Watson (WTW) reported first-quarter 2025 adjusted earnings of 3.13pershare,missingtheZacksConsensusEstimateby2.13.13 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 1.8billion,attributedtolowersalaries,benefits,andotheroperatingexpenses,whichwasbelowtheestimated1.8 billion, attributed to lower salaries, benefits, and other operating expenses, which was below the estimated 2 billion [3] - Adjusted operating income was 480million,down1480 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 1.1billion,down131.1 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 1.5billionatquarter−end,whilelong−termdebtdecreasedby10.31.5 billion at quarter-end, while long-term debt decreased by 10.3% to 4.7 billion [10] - Free cash outflow was 86million,comparedto86 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 200millionduringthequarter[11]FutureGuidance−WTWanticipatescashoutflowsrelatedtotheTransformationprogram,whichconcludedin2024,andprojectssharerepurchasesof200 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]