Willis Towers Watson (WTW) Q2 2024 earnings summary

Executive summary

• Achieved 6% organic revenue growth and 5% total revenue growth year-over-year in Q2 2024, with revenue reaching $2.3 billion.

• Adjusted diluted EPS rose 24% to $2.55; diluted EPS increased 55% to $1.36; net income grew 48%-50% to $141-$142 million.

• Transformation program delivered $24 million incremental annualized savings in Q2, totaling $394 million, with a target of $450 million by year-end 2024.

• Returned $290 million to shareholders in Q2 via $200 million in share repurchases and $90 million in dividends.

• Strategic hires, technology modernization, and operational efficiency initiatives continued to drive growth and margin expansion.

Financial highlights

• Adjusted operating margin for Q2 was 17.0%, up 240 basis points year-over-year.

• Adjusted EBITDA for Q2 was $466 million (20.6% margin), up from $411 million (19.0% margin) in Q2 2023.

• Free cash flow for the first half was $361 million, up from $350 million in the prior year.

• Net cash from operating activities was $431 million for Q2, flat year-over-year.

• Returned $290 million to shareholders in Q2 through share repurchases and dividends.

Outlook and guidance

• Raised 2024 guidance: adjusted operating margin now 23.0%-23.5%, adjusted EPS $16.00-$17.00, and transformation savings target increased to $450 million.

• Revenue target reaffirmed at $9.9+ billion for 2024, with mid-single-digit organic growth expected.

• Free cash flow margin target of 16%+ remains a longer-term goal, with improvement expected as transformation spend abates.

• Share repurchases expected to total ~$750 million in 2024, subject to market conditions.

• Management expects sufficient liquidity for the next twelve months, with no mandatory debt repayments and a fully available $1.5 billion revolving credit facility.