Willis Towers Watson (WLTW) Q1 2025 earnings summary

Executive summary

• Achieved 5% organic revenue growth in Q1 2025, despite a 5% reported revenue decline to $2.22B due to the TRANZACT sale.

• Adjusted operating margin expanded 100 bps to 21.6%; diluted EPS rose 27% to $2.33, and adjusted EPS was $3.13, up 8% year-over-year excluding TRANZACT.

• Net income increased 23% to $239M, reflecting lower transformation and restructuring costs.

• Strategic focus on efficiency, operating leverage, and portfolio optimization, including the completed TRANZACT divestiture and acquisition of Global Commercial Credit.

• Returned $200M in share repurchases and $88M in dividends to shareholders in Q1 2025.

Financial highlights

• Revenue: $2.22B, down 5% year-over-year; organic revenue up 5%.

• Adjusted operating margin: 21.6% (up 100 bps); operating margin: 19.4% (up 740 bps).

• Adjusted diluted EPS: $3.13, up 8% year-over-year excluding TRANZACT; diluted EPS: $2.33, up 27%.

• Net income: $239M, up 23% year-over-year.

• Free cash flow: $(86)M, down from $(36)M, mainly due to TRANZACT sale and higher compensation payments.

Outlook and guidance

• Reaffirmed 2025 outlook: mid-single-digit organic growth, adjusted operating margin expansion, adjusted EPS growth, and improved free cash flow margin.

• Share repurchases expected to total ~$1.5B in 2025, subject to market and investment opportunities.

• Foreign exchange expected to have no material impact on full-year adjusted EPS.

• R&B segment targeting ~100 bps average annual margin expansion over next 3 years; incremental margin expansion expected at HWC and enterprise levels.

• Reinsurance JV with Bain Capital expected to be a $0.25–$0.35 headwind to adjusted diluted EPS.