Willis Towers Watson (WLTW) Q3 2024 earnings summary

Executive summary

• Revenue grew 6% year-over-year to $2.3 billion in Q3 2024, with organic growth also at 6% and strong performances in both Risk & Broking (10% organic) and Health, Wealth & Career (4% organic).

• Adjusted diluted EPS rose 31% to $2.93, while reported diluted loss per share was $(16.44) due to over $1 billion in non-cash impairment and loss charges from the pending TRANZACT sale.

• Adjusted operating margin expanded by 190 basis points to 18.1%, with margin improvements driven by transformation program savings and operating leverage.

• Free cash flow for the nine months ended September 30, 2024, was $807 million, up $100 million year-over-year.

• The multi-year Transformation program delivered $52 million in incremental annualized savings in Q3, totaling $446 million since inception, targeting $450 million by year-end 2024.

Financial highlights

• Q3 2024 revenue was $2.3 billion (up 6% year-over-year); nine-month revenue reached $6.9 billion (up 5%).

• Net loss for Q3 2024 was $1.67 billion, primarily due to over $1 billion in pre-tax non-cash impairment and disposal losses related to TRANZACT.

• Adjusted EBITDA for Q3 2024 was $501 million (margin 21.9%), up from 20.1% in Q3 2023.

• Adjusted diluted EPS was $2.93, a 31% increase from Q3 2023.

• Returned $294 million to shareholders in Q3 via $205 million in share repurchases and $89 million in dividends.

Outlook and guidance

• Full-year 2024 revenue expected to be $9.9 billion or greater, with mid-single digit organic growth.

• Adjusted operating margin guidance of 23.0%–23.5% for 2024, with adjusted diluted EPS projected at $16.00–$17.00.

• Free cash flow margin expected to improve to 16%+ in 2024 and beyond, aided by margin expansion and TRANZACT sale.

• Share repurchase guidance for the year increased to $900 million.

• Sale of TRANZACT not expected to impact 2024 financial targets.