01—Abstract
Summary
Summary of the 10-Q filed April 24, 2025. Cited figures are marked; the original filing is the authoritative source.
Willis Towers Watson Public Limited Company reported first-quarter 2025 revenue of $2,223 milliona, down from $2,341 million in the prior-year quarter.
The filing attributes the as-reported decline primarily to the sale of TRANZACT on December 31, 2024, and states that organic revenue grew 5%, driven by both the Health, Wealth & Career and Risk & Broking segments. Income from operations rose to $432 millionb from $280 million, mainly because of lower transformation, transaction and restructuring costs following the completion of the Transformation program in the fourth quarter of 2024. Net income attributable to WTW increased to $235 million from $190 million, and diluted earnings per share were $2.33 compared with $1.83.
Adjusted EBITDA declined to $532 millionc from $546 million, and adjusted diluted earnings per share were flat at $3.13. Cash generation weakened. Net cash used in operating activities was $35 million, compared with $24 million of cash from operations in the prior year, and free cash flow was negative $86 million versus negative $36 million.
The filing cites the absence of TRANZACT-related cash collections and higher compensation payments. Net income was also affected by a one-time, non-cash pension settlement charge of $82 milliond tied to a February 2025 group annuity purchase by the U.S. pension plan. The company repurchased $200 million of shares and paid $88 million in dividends during the quarter, and it reports approximately $1.2 billion remaining under its share repurchase authority.
Liquidity and leverage remained substantial. Total debt was $5,310 million at March 31, 2025, including $549 million of 4.400% senior notes due 2026 classified as current.
Cash and cash equivalents were $1,507 million, and the $1.5 billion revolving credit facility remained undrawn. The filing states that the company received a $750 million earnout related to the 2021 divestiture of Willis Re in April 2025, and that it believes it has sufficient liquidity for the next twelve months.
02—Key points
Key Highlights
- Revenue was $2,223 million versus $2,341 million, a decrease of $118 million or 5% as reported; organic revenue growth was 5%, and the decline was mainly due to the TRANZACT sale on December 31, 2024.
- Income from operations increased to $432 million from $280 million, reflecting lower transformation, transaction and restructuring costs after the Transformation program concluded in Q4 2024.
- Net income attributable to WTW rose $45 million, or 24%, to $235 million; diluted EPS was $2.33 versus $1.83.
- Adjusted EBITDA was $532 million versus $546 million, and adjusted diluted EPS was $3.13 in both periods.
- Operating cash flow was negative $35 million (versus $24 million) and free cash flow was negative $86 million (versus negative $36 million), citing lost TRANZACT collections and higher compensation payments.
- A one-time, non-cash pre-tax pension settlement charge of $82 million was recognized from a $423 million U.S. pension annuity purchase in February 2025.
- The company repurchased $200 million of shares, paid $88 million in dividends ($0.92 per share declared), and has approximately $1.2 billion remaining under its repurchase authority.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 24, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $2.22B$2.34B | −5.0% |
| Operating Expenses | $1.79B$2.06B | −13.1% |
| Operating Income | $432.00M$280.00M | +54.3% |
| Interest Expense | $65.00M$64.00M | +1.6% |
| Net Income | $235.00M$190.00M | +23.7% |
| EPS (Basic) | $2.34$1.84 | +27.2% |
| EPS (Diluted) | $2.33$1.83 | +27.3% |
| Shares Outstanding (Basic) | 100.00M103.00M | −2.9% |
| Shares Outstanding (Diluted) | 101.00M104.00M | −2.9% |
05—Questions
Frequently Asked Questions
Why did reported revenue decline if organic growth was positive?
Reported revenue fell $118 million, or 5%, to $2,223 million, primarily because of the December 31, 2024 sale of TRANZACT. Organic revenue, which excludes currency effects and acquisitions and divestitures, grew 5%, driven by strong performance in both segments. Currency translation reduced consolidated revenue by $36 million, mainly due to the Euro.
Why did operating income improve while adjusted EBITDA declined?
Income from operations rose to $432 million from $280 million mainly because the prior-year quarter included $125 million of transaction and transformation costs and $18 million of restructuring costs, neither of which recurred. Adjusted EBITDA, which excludes those items, fell to $532 million from $546 million, primarily due to lower revenue from the TRANZACT sale, partly offset by lower marketing and local office expenses.
Why was operating cash flow negative this quarter?
Net cash used in operating activities was $35 million, compared with $24 million of cash provided in the prior-year quarter. The filing attributes the change to the absence of cash collections related to TRANZACT, which was sold on December 31, 2024, and to higher compensation payments in the current quarter, including bonus and incentive payments.
What was the pension settlement and how did it affect results?
In February 2025, the Willis Towers Watson Pension Plan for U.S. Employees purchased a group annuity and transferred approximately $423 million of defined benefit obligations and related assets to an insurer. This resulted in a one-time, non-cash pre-tax pension settlement charge of $82 million, which reduced other (loss)/income, net to a loss of $64 million from income of $26 million a year earlier.
How is the company's liquidity and debt position?
Cash and cash equivalents were $1,507 million at March 31, 2025, and total debt was $5,310 million, including $549 million of 4.400% senior notes due in the first quarter of 2026. The $1.5 billion revolving credit facility was undrawn, and the company was in compliance with all financial covenants. The filing also states that a $750 million earnout related to the 2021 Willis Re divestiture was received in April 2025.
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