Willis Towers Q2 Earnings & Revenues Beat Estimates on Lower Costs

Willis Towers Watson Public Limited Company WTW delivered second-quarter 2025 adjusted earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 8%.  The bottom line increased 20% year over year.

The insurer’s second-quarter results benefited from strong revenue contribution from the Risk & Broking segment, as well as expanded EBITDA margin and lower expenses.

Operational Update

Willis Towers posted adjusted consolidated revenues of $2.26 billion, which remained flat year over year on a reported basis. Revenues increased 5% on an organic basis and 1% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 1.2%.

The total costs of providing services decreased 7.8% year over year to $1.9 billion due to lower other operating expenses, amortization, and transaction and transformation. Our estimate was $1.8 billion. 

Adjusted operating income was $419 million, which increased 9% year over year. The figure was higher than our estimate of $396.2 million. Margin expanded 150 basis points (bps) to 18.5%.

Adjusted EBITDA was $470 million, up 6% year over year. The figure matched our estimate. Adjusted EBITDA margin expanded 120 bps to 20.8%.

Quarterly Segment Update

Health, Wealth & Career: Total revenues of $1.18 billion decreased 6% year over year (8% decrease on a constant currency and 4% increase on an organic basis), due to the sale of TRANZACT. The figure matched the Zacks Consensus Estimate as well as our estimate. 
Health delivered organic revenue growth driven by double-digit increases outside North America and solid performance in North America. 
Wealth generated organic revenue growth from higher levels of Retirement work globally, alongside growth in the Investments business from new business wins and product launches. 

Career had modest revenue growth as healthy demand for advisory project work outside North America. It was offset by North America client postponement decisions made earlier in the year. Benefits Delivery & Outsourcing revenues were materially flat, as increased project and core administration work within Europe was tempered by lower commission revenues in the Individual Marketplace business.
The operating margin was 23.8%, which expanded 190 bps from the prior-year quarter, primarily due to the sale of TRANZACT.

Risk & Broking: Total revenues of $1 billion increased 7% year over year (6% increase in constant currency as well as on an organic basis). The figure matched the Zacks Consensus Estimate as well as our estimate. The organic revenue growth in Corporate Risk & Broking was driven by higher levels of new business activity and strong client retention globally.  Insurance Consulting and Technology revenues were flat for the quarter as clients managed spending more cautiously amid ongoing economic uncertainty.

The operating margin increased 60 bps from the prior-year quarter to 21.2%, primarily due to operating leverage driven by strong organic revenue growth and savings from the Transformation program. These were partially offset by headwinds from decreased interest income and foreign currency fluctuations.

Financial Update

As of June 30, 2025, cash and cash equivalents were $1.9 billion, up 3.4% from the end of 2024. Long-term debt increased 10.3% to $4.7 billion at quarter-end from the end of 2024.

Shareholders’ equity increased 2% from the level on Dec. 31, 2024, to $8.1 billion as of June 30, 2025. Cash flow from operations was $326 million in the first half of 2025, which decreased 24.3% from the prior-year period.

Free cash flow for the first half of 2025 decreased 29% to $217 million. The decline was primarily due to increased compensation and cash tax payments as well as the absence of cash inflows from TRANZACT following its sale on Dec. 31, 2024. It was partly offset by lower Transformation program spending and operational improvements.

2025 Outlook

Willis Towers expects 100 basis points of average annual margin expansion over the next three years in R&B. WTW projects incremental annual margin expansion at HWC and enterprise levels.

Willis Towers expects cash outflows from the payment of accrued costs related to the Transformation program, which concluded in 2024.
The insurer projects share repurchases of $1.5 billion, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities.

WTW expects a foreign currency tailwind on adjusted diluted earnings per share of approximately 5 cents in 2025 at today's rates.

Zacks Rank

Willis Towers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Brokerage Insurers

Brown & Brown, Inc.’s BRO second-quarter 2025 adjusted earnings of 1.03 per share beat the Zacks Consensus Estimate by 4%. The bottom line increased 10.8% year over year. Total revenues of $1.3 billion beat the Zacks Consensus Estimate by 0.7%. The top line improved 9.1% year over year. The upside can be primarily attributed to commission and fees, which grew 7.7% year over year to $1.2 billion. Our estimate for commission and fees growth was 8.5%.

Organic revenues improved 3.6% year over year to $1.2 billion in the quarter under review. Investment income increased year over year to $36 million. The Zacks Consensus Estimate for the metric was pegged at $18.6 million, and our estimate was $22.9 million.

Marsh & McLennan Companies, Inc. MMC reported second-quarter 2025 adjusted earnings per share of $2.72, which surpassed the Zacks Consensus Estimate by 2.3%. The bottom line advanced 11% year over year. Consolidated revenues of $6.97 billion improved 12% year over year. The figure rose 4% on an underlying basis. Also, the top line beat the consensus mark by 0.8%. 

Total operating expenses escalated 12.4% year over year to $5.1 billion, higher than our model estimate of $4.9 billion. Expenses in the Risk and Insurance Services segment rose 16.8% year over year, while the Consulting segment's expenses increased 6%. Marsh & McLennan’s adjusted operating income improved 14% year over year to $2.06 billion and beat our estimate of $2.05 billion. Adjusted operating margin of 29.5% increased 50 basis points year over year.

Aon plc AON reported second-quarter 2025 adjusted earnings of $3.49 per share, which beat the Zacks Consensus Estimate by 2.7%. The bottom line increased 19.1% from the year-ago period. Total revenues rose 11% year over year to $4.2 billion. The top line surpassed the consensus mark by 0.7%. Organic revenue growth was 6%. Total operating expenses of $3.3 billion increased 6% year over year.

Adjusted operating income advanced 14% year over year to $1.2 billion and was in line with our estimate. However, the adjusted operating margin of 28.2% improved 80 basis points year over year.

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