Willis Towers Watson Public Limited Company Ordinary Shares
WTW · Nasdaq
Next quarter
Reports Oct 29, 2026.
Consensus is $3.61 EPS for Sep 2026 across 8 estimates, ranging $3.46 to $3.81.
WTW Jun 2026
- 7.03%
- -0.04%
- $3.13
- $3.35
- —
- $2.43B
Reported results
- $2.43B
- $364.00M
- 14.99%
- $229.00M
- $2.43
Highlights
- Adjusted EPS: Adjusted diluted EPS was $3.35, up 17% year over year and 7.0% above the $3.13 consensus; GAAP diluted EPS was $2.43 versus $3.32 a year earlier.
- Revenue growth: Revenue rose 9% year over year to $2.466 billion, including 8% constant-currency growth and 5% organic growth; revenue increased from $2.36 billion in Q1 2026.
- Margin expansion: Adjusted operating income increased 15% to $480 million and adjusted margin expanded 100 basis points to 19.5%, despite GAAP operating income declining to $364 million from $368 million.
- Risk & Broking: R&B delivered the strongest segment performance, with revenue up 11% to $1.164 billion, organic growth of 7%, operating income up 16% to $258 million and margin up 100 basis points to 22.2%.
- Health, Wealth & Career: HWC revenue increased 8% to $1.270 billion, with 4% organic growth; operating income rose 9% to $306 million and margin expanded 30 basis points to 24.1%.
- Propel AI plan: WTW announced a two-year AI and automation program requiring approximately $625 million of cash investment and $25 million of non-cash charges, targeting $400 million of gross run-rate savings and $350 million net savings by 2028.
- Capital returns: The board added $1.5 billion to repurchase authorization, on top of approximately $500 million remaining previously; WTW repurchased 1.734 million shares for $450 million during the quarter.
- Cash generation and leverage: Six-month operating cash flow rose to $474 million from $326 million and free cash flow to $360 million from $217 million, while total debt increased to $6.530 billion from $6.306 billion at year-end after acquisition funding.
Analysis
WTW's second quarter was an adjusted earnings beat driven by broad-based organic growth and operating leverage, though the GAAP result was weaker because of acquisition-related costs, higher taxes and interest expense. Revenue of $2.466 billion increased 9% from $2.261 billion a year ago and 5% organically, while adjusted diluted EPS of $3.35 exceeded the $3.13 consensus by 7.0% and rose 17% year over year. GAAP diluted EPS fell 27% to $2.43, and net income declined 30% to $231 million, largely reflecting a much higher $61 million of transaction and integration expense versus $2 million last year and a 19.8% tax rate versus a prior-year tax benefit. Relative to Q1, revenue grew from $2.36 billion, while operating income and GAAP EPS declined from $448 million and $3.10, consistent with WTW's seasonal pattern.
The operating print was led by Risk & Broking, where 7% organic growth and leverage lifted margin to 22.2%, while HWC produced 4% organic growth and a 24.1% margin. Management's larger message was structural: Propel targets approximately 30% adjusted operating margin in 2028 through $350 million of net run-rate savings after $625 million of cash investment. WTW also continued aggressive capital deployment, repurchasing $750 million of shares in the first half and expanding authorization by $1.5 billion.
Propel AI plan
Propel was the quarter's most consequential strategic announcement. WTW plans to embed AI and automation across the enterprise over two years, using existing investments in AI, data and technology as well as capabilities brought by Newfront. The program is intended to improve client service, create growth opportunities and streamline core processes, but it also carries substantial execution and workforce risks.
- Investment: WTW expects approximately $625 million of cash costs and $25 million of non-cash charges through 2028, principally for technology implementation, process redesign, severance, retention and contract termination costs.
- Savings: The company targets approximately $400 million of gross annual run-rate savings, less roughly $50 million reinvested in growth, for $350 million of net run-rate savings by the end of 2028.
- Margin target: Management linked the program to an approximately 30% adjusted operating margin target in 2028, versus 19.5% in the second quarter of 2026.
Organic operating growth
Underlying demand remained healthy across both operating segments, with the strongest momentum in R&B. Growth was not solely currency or acquisition-driven: consolidated organic revenue increased 5%, compared with 8% constant-currency growth and 9% reported growth. Both segments also expanded operating margins through leverage and expense discipline.
- Risk & Broking: Revenue rose 11% to $1.164 billion, including 7% organic growth. Corporate Risk & Broking benefited from new business and strong client retention, while Insurance Consulting and Technology was helped by software sales. Operating income increased 16% to $258 million and margin reached 22.2% from 21.2%.
- Health, Wealth & Career: Revenue increased 8% to $1.270 billion, including 4% organic growth. Health grew across all regions, Wealth benefited from higher retirement work, and BD&O gained from project work, new wins and regulatory activity. Operating income rose 9% to $306 million and margin reached 24.1% from 23.8%.
- Growth constraints: Career revenue was flat organically in the quarter as communications and pay work offset Middle East weakness related to the ongoing conflict.
Earnings quality and costs
The adjusted measure showed improving core profitability, but the GAAP bridge became more significant following the Newfront acquisition. Adjusted operating income rose to $480 million from $419 million, lifting adjusted margin to 19.5% from 18.5%. GAAP operating income was broadly flat because transaction costs increased sharply, while below-the-line items and taxes weighed on net income.
- Acquisition costs: Transaction and integration expense was $61 million in the quarter versus $2 million a year earlier, primarily reflecting Newfront-related share compensation and other transaction costs.
- Cost pressure: Salaries and benefits increased 7% to $1.551 billion, with roughly one-third of the increase attributed to Newfront and Cushon; the remainder reflected salary increases, incentives and higher medical costs.
- Below the line: Interest expense increased 22% to $78 million because of new senior notes and the $775 million delayed-draw term loan. The tax rate was 19.8%, compared with a 6.8% tax benefit in the prior-year quarter.
Newfront and Cushon
WTW continued to expand through acquisitions, adding scale to both segments but increasing near-term financing, amortization and integration costs. Newfront was acquired in January for approximately $1.05 billion of upfront consideration, while Cushon was acquired in April for £150 million of cash consideration plus contingent consideration.
- Newfront contribution: Management expects approximately $250 million of post-close 2026 revenue and a roughly 26% adjusted EBITDA margin. Its Total Rewards business is included in HWC and Business Insurance in R&B.
- 2026 dilution: Newfront is expected to be approximately $0.10 dilutive to adjusted EPS in 2026, while the Willis Re joint venture is expected to be a roughly $0.30 headwind.
- Funding and accounting: Six-month cash outflows for acquisitions were $1.039 billion. Newfront-related transaction and integration expenses drove much of the $102 million of first-half expense, while goodwill increased to $9.735 billion from $8.938 billion at year-end.
Capital allocation and cash
WTW paired acquisition spending with continued shareholder returns and stronger cash conversion. Six-month operating cash flow and free cash flow improved despite the cash demands of Newfront and Cushon, while the balance sheet reflected both acquisition funding and share repurchases.
- Repurchases: WTW bought back 1.734 million shares for $450 million in the quarter and 2.748 million shares for $750 million in the first half. Approximately $542 million remained under the prior authorization before the new $1.5 billion increase.
- Cash flow: Six-month operating cash flow increased 45% to $474 million, while free cash flow rose 66% to $360 million from $217 million, primarily because of operating margin expansion.
- Balance sheet: Cash and equivalents declined to $1.627 billion from $3.132 billion at December 31, 2025, while total debt rose to $6.530 billion from $6.306 billion. WTW remained in compliance with its financial covenants and had full availability under its $1.5 billion revolving facility.
