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Willis Towers Watson 8-K Report, Financial Results (Apr 25, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed April 25, 2024
Period End
April 25, 2024
Security
WTW
In the record · 2016–202610-K1210-Q338-K148

WTW filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 148 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Sep ’18Sep ’18
  2. Deal closed8-K · Oct ’20Oct ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Nov ’26Nov ’26

01—Abstract

Summary

Summary of the 8-K filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.

WTW (NASDAQ: WTW), a global advisory, broking and solutions company, reported first-quarter 2024 results for the period ended March 31, 2024.

Revenue rose 4% to $2.34 billiona from $2.24 billion, with organic growth of 5%. Income from operations declined to $280 million from $285 million, and operating margin fell to 12.0% from 12.7%. Net income was $194 million, down from $206 million, and diluted EPS was $1.83 versus $1.88.

On an adjusted basis, which excludes amortization, restructuring costs, and transaction and transformation expenses, adjusted operating income rose 16% to $483 millionb, adjusted operating margin expanded 200 basis points to 20.6%, and adjusted diluted EPS grew 16% to $3.29 from $2.84. Cash flow weakened, with cash from operating activities of $24 million versus $134 million a year earlier and free cash flow of $(9) million versus $92 million, driven by transformation and discretionary compensation payments. The company repurchased $101 million of shares and paid $86 million in dividends during the quarter.

Transformation program savings reached $370 millionc of cumulative run-rate savings since inception, and WTW reaffirmed its full-year 2024 targets: revenue of $9.9 billion or greater, adjusted operating margin of 22.5% to 23.5%, and adjusted diluted EPS of $15.40 to $17.00. The filing furnishes the earnings press release (Exhibit 99.1) and a supplemental slide presentation (Exhibit 99.2) under Items 2.02 and 7.01. Investors should note that the headline adjusted metrics exclude significant transaction and transformation costs, which rose to $125 million from $59 million, and that GAAP net income and free cash flow declined year over year.

02—Key points

Key Highlights

  1. Revenue increased 4% to $2.34 billion, with organic growth of 5% for the quarter.
  2. GAAP diluted EPS was $1.83, down 3% from $1.88; GAAP net income fell 6% to $194 million.
  3. Adjusted diluted EPS rose 16% to $3.29, and adjusted operating margin expanded 200 basis points to 20.6%.
  4. GAAP operating margin declined 70 basis points to 12.0%, with transaction and transformation costs rising to $125 million from $59 million.
  5. Free cash flow was $(9) million versus $92 million in the prior-year quarter, driven by higher transformation and discretionary compensation payments.
  6. WTW repurchased $101 million of shares and paid $86 million in dividends in the quarter.
  7. Full-year 2024 targets were reaffirmed: revenue of $9.9 billion or greater, adjusted operating margin of 22.5% to 23.5%, and adjusted diluted EPS of $15.40 to $17.00.

03—Questions

Frequently Asked Questions

  1. How did WTW perform in the first quarter of 2024?

    Revenue grew 4% to $2.34 billion with 5% organic growth. Net income was $194 million, down from $206 million, and diluted EPS was $1.83 versus $1.88. Adjusted diluted EPS rose 16% to $3.29.

  2. Why did GAAP earnings decline while adjusted earnings grew?

    Adjusted metrics exclude amortization, restructuring costs, and transaction and transformation expenses. Transaction and transformation costs rose to $125 million from $59 million, and amortization and restructuring costs also factor into the difference between GAAP and adjusted results.

  3. What happened to WTW's cash flow this quarter?

    Cash flows from operating activities were $24 million, compared with $134 million a year earlier. Free cash flow was $(9) million versus $92 million, a decrease of $101 million, primarily due to increased cash outflows related to transformation and discretionary compensation payments, partially offset by higher collections.

  4. What are WTW's full-year 2024 financial targets?

    WTW expects revenue of $9.9 billion or greater with mid-single-digit organic growth, adjusted operating margin of 22.5% to 23.5%, and adjusted diluted EPS of $15.40 to $17.00. It also expects approximately $88 million in non-cash pension income and $425 million of cumulative run-rate Transformation savings by the end of 2024.

  5. How is WTW returning capital to shareholders?

    During the first quarter, WTW repurchased $101 million of its outstanding shares and paid $86 million in dividends, or $0.88 per common share.

04—Continue

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