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Willis Towers Watson 8-K Report, Financial Results (Oct 31, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed October 31, 2024
Period End
October 31, 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 October 31, 2024. Cited figures are marked; the original filing is the authoritative source.

WTW (NASDAQ: WTW) reported third-quarter 2024 results on October 31, 2024, as stated in Exhibit 99.1.

Revenue was $2,289 milliona, up 6% from $2,166 million in the prior-year quarter, with organic growth of 6%. The company reported a net loss of $1,672 million (diluted loss per share of $16.44), driven by pre-tax non-cash losses and impairment charges of over $1.0 billion each related to the pending sale of TRANZACT. On an adjusted basis, operating income was $414 million with an adjusted operating margin of 18.1%, up 190 basis points, and adjusted diluted EPS was $2.93, up 31% from $2.24.

For the nine months ended September 30, 2024, free cash flow was $807 millionb versus $707 million a year earlier, and the company repurchased $205 million of shares in the quarter. Segment results showed Health, Wealth & Career revenue of $1,328 million (organic growth of 4%) with an operating margin of 24.7%, and Risk & Broking revenue of $940 million (organic growth of 10%) with an operating margin of 18.1%. WTW reaffirmed its full-year 2024 targets: revenue of $9.9 billion or greater with mid-single-digit organic growth, adjusted operating margin of 23.0% to 23.5%, and adjusted diluted EPS of $16.00 to $17.00.

It also expects approximately $450 millionc of cumulative run-rate Transformation savings by year-end 2024, against total program costs of $1.175 billion. The company will hold an Investor Day on December 3, 2024.

02—Key points

Key Highlights

  1. Q3 2024 revenue of $2,289 million, up 6% reported and 6% organic versus $2,166 million in Q3 2023.
  2. GAAP net loss of $1,672 million (diluted EPS of $(16.44)), including over $1.0 billion of pre-tax non-cash losses and impairment charges tied to the pending sale of TRANZACT.
  3. Adjusted diluted EPS of $2.93, up 31% from $2.24; adjusted operating margin of 18.1%, up 190 basis points.
  4. Health, Wealth & Career segment: revenue of $1,328 million (4% organic growth) and operating margin of 24.7%, up 90 basis points, primarily from Transformation savings.
  5. Risk & Broking segment: revenue of $940 million (10% organic growth) and operating margin of 18.1%, up 240 basis points.
  6. Nine-month free cash flow of $807 million versus $707 million a year earlier; $205 million of shares repurchased in the quarter.
  7. 2024 targets reaffirmed: revenue of $9.9 billion or greater, adjusted operating margin of 23.0% to 23.5%, and adjusted diluted EPS of $16.00 to $17.00; Investor Day scheduled for December 3, 2024.

03—Questions

Frequently Asked Questions

  1. Why did WTW report a large GAAP net loss in the third quarter of 2024?

    The filing states that the third-quarter results include pre-tax non-cash losses and impairment charges of over $1.0 billion each related to the pending sale of TRANZACT. The impairment was a non-cash goodwill impairment tied to the Benefits, Delivery and Administration reporting unit, and the loss on disposal was $1,190 million. Net loss was $1,672 million, compared with net income of $139 million a year earlier.

  2. How did WTW's underlying operating performance look excluding these items?

    On an adjusted basis, operating income rose to $414 million from $351 million, with an adjusted operating margin of 18.1% versus 16.2%. Adjusted net income was $299 million, up from $236 million, and adjusted diluted EPS was $2.93 versus $2.24.

  3. What drove revenue growth in the quarter?

    Revenue grew 6% on both a reported and organic basis. Risk & Broking grew 10% organically, driven by new business activity, client retention and software sales in Technology. Health, Wealth & Career grew 4% organically, with Health, Wealth and Career all contributing, while Benefits Delivery & Outsourcing declined as the company deliberately moderated growth in Individual Marketplace.

  4. What are WTW's full-year 2024 targets and the status of the Transformation program?

    WTW expects revenue of $9.9 billion or greater, mid-single-digit organic growth, adjusted operating margin of 23.0% to 23.5%, and adjusted diluted EPS of $16.00 to $17.00. It expects approximately $450 million of cumulative run-rate savings from the Transformation program by year-end 2024, with total program costs of $1.175 billion. Cumulative run-rate savings reached $446 million as of the quarter.

  5. What capital return and cash flow actions did WTW report?

    Free cash flow for the nine months ended September 30, 2024 was $807 million, up $100 million from $707 million. WTW repurchased $205 million of its outstanding shares during the quarter and paid dividends of $89 million, or $0.88 per common share, per the supplemental slides.

04—Continue

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