Willis Towers Q2 Earnings Beat Estimates, Improve Y/Y

Willis Towers Watson Public Limited Company (NASDAQ: WTW) delivered second-quarter 2024 adjusted earnings of $2.55 per share, which beat the Zacks Consensus Estimate by 11.8%.  The bottom line increased 24% year over year.

The insurer’s second-quarter results benefited from the strong revenue contribution from the Health, Wealth & Career and Risk & Broking segments, as well as expanded margin, partly offset by elevated expenses.

Operational Update

Willis Towers posted adjusted consolidated revenues of $2.26 billion, up 5% year over year on a reported basis. Revenues increased 6% on both organic basis and constant currency basis. The top line beat the Zacks Consensus Estimate by 0.04%.

The total costs of providing services increased 1.7% year over year to $2 billion due to higher salaries and benefits, transaction and transformation and other operating expenses. The metric matched our estimate.

Adjusted operating income was $385 million, which increased 22% year over year. The figure was higher than our estimate of $343 million. Margin expanded 240 basis points (bps) to 17%.

Adjusted EBITDA was $466 million, up 13% year over year. The figure was higher than our estimate of $437.4 million. Adjusted EBITDA margin expanded 160 bps to 20.6%.

Quarterly Segment Update

Health, Wealth & Career: Total revenues of $1.2 billion increased 4% year over year (4% increase on a constant currency and 5% increase on organic basis). The figure matched the Zacks Consensus Estimate as well as our estimate.

Organic revenue growth in Health was driven by increased project work in North America and strong client retention, new local appointments and the continued expansion of Global Benefits Management client portfolio in International and Europe.

Wealth businesses generated organic revenue growth from higher levels of Retirement work in North America and Europe …

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