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WTW posted Q4 adjusted EPS of $8.12, beating estimates as operating margins expanded.
Health, Wealth & Career margins jumped 240 bps to 44.3%, aided by organic growth and the TRANZACT sale.
Risk & Broking revenues rose 10% year over year, with margin expansion driven by strong organic growth.
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered fourth-quarter 2025 adjusted earnings of $8.12 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line increased 2% year over year.
The quarterly results of WTW were aided by expanded operating margins at the Health, Wealth & Career and Risk & Broking segments. Lower expenses also added to the upside.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Willis Towers posted adjusted consolidated revenues of $2.9 billion, which declined 3% year over year on a reported basis. Revenues increased 6% on an organic basis but declined 5% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 2.5%. The total costs of providing services decreased 10% year over year to $1.9 billion due to lower other operating expenses, amortization and transaction and transformation. Our estimate was pegged at $1.8 billion.
Adjusted operating income was $1 billion, which decreased 1% year over year. Margin expanded 80 basis points (bps) to 36.9%. Adjusted EBITDA was $1.12 billion, down 3% year over year. Adjusted EBITDA margin was 38.2%, which expanded 30 bps year over year.
Quarterly Segment Update
Health, Wealth & Career: Total revenues of $1.6 billion declined 11% year over year (12% decrease on a constant currency basis but 6% increase on an organic basis), but beat the Zacks Consensus Estimate by 0.6%. Our estimate was pegged at $1.7 billion.
Health delivered organic revenue growth, which was led by double-digit increases in International due to strong client retention, new client wins, and healthcare inflation.
Wealth generated organic revenue growth from strong levels of Retirement work across all regions, as well as growth in the Investments business from new products, enhanced capital market conditions, and client wins.
Career organic revenue growth was primarily driven by robust demand for broad-based advisory services and compensation benchmarking survey work, as well as the impact of a change in survey delivery patterns. A book-of-business sale also contributed to Career’s revenue growth this quarter.
Benefits Delivery & Outsourcing organic revenue growth reflected higher commission revenue alongside higher levels of project and core administration work.
The operating margins expanded 240 basis points from the prior-year quarter to 44.3%, primarily due to the sale of TRANZACT.
Risk & Broking: Total revenues of $1.2 billion rose 10% year over year (7% increase in constant currency and on an organic basis) and beat the Zacks Consensus Estimate by 4.9%. Our estimate was $1.1 billion.
Corporate Risk & Broking had organic revenue growth, which is driven by higher levels of new business activity and strong client retention globally. Insurance Consulting and Technology's organic revenues declined modestly, reflecting clients' continued caution in managing expenses amid ongoing economic uncertainty.
The operating margins expanded 120 basis points from the prior-year quarter to 34.7%. The increase was primarily driven by operating leverage from strong organic revenue growth.
Financial Update
As of Dec. 31, 2025, cash and cash equivalents were $3.1 billion, up 65.7% from 2024-end.
Long-term debt increased 8.4% to $5.7 billion at quarter-end from 2024-end.
Shareholders’ equity increased 0.4% from the level on Dec. 31, 2025, to $7.9 billion as of Dec 31, 2024.
Cash flow from operations was $1.78 billion in 2025, up 17.8% from the prior-year period.
Free cash flow for 2025 increased 22% year over year to $1.55 billion. The increase was primarily due to operating margin expansion and the abatement of remaining Transformation program cash outflows.
Newfront acquisition
Willis Towers expected 10 cents dilutive to adjusted EPS in 2026.
The insurer projects 2026 post-close revenues to be $250 million and an adjusted EBITDA margin of 26%.
Newfront’s Total Rewards business segment (42%) will be included in HWC, and Newfront’s Business Insurance business segment (58%) will be included in R&B.
2026 Financial Considerations
Willis Towers expects continued annual margin expansion at the enterprise level, driven by 100 basis points of average annual margin expansion over the next two years in R&B and incremental annual margin expansion in HWC.
The insurer projects a foreign currency tailwind on adjusted diluted EPS of 30 cents in 2026 at current rates, with most of the tailwind coming in first-quarter 2026.
WTW expects continual improvement in FCF margin primarily from operating margin expansion, along with evolving our business mix.
Willis Towers expects share repurchases of $1.0 billion or greater, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities.
Full-Year Highlights
Adjusted earnings of $17.08 per share beat the Zacks Consensus Estimate by 1.2%. The bottom line increased 5% year over year.
Total revenues declined 2% from the year-ago quarter to about $9.7 billion. The top line beat the Zacks Consensus Estimate by 0.6%.
Arthur J. Gallagher & Co. (AJG - Free Report) reported fourth-quarter 2025 adjusted net earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 1.2%. The bottom line increased 11.7% on a year-over-year basis. Total revenues of $3.6 billion beat the Zacks Consensus Estimate by 0.3%. The top line also improved 33.8% year over year.
Arthur J. Gallagher’s total expenses increased 44.7% year over year to $3.4 billion in the reported quarter. Earnings before interest, tax, depreciation, and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 3.3% from the prior-year quarter to $710 million.
Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2025 adjusted earnings of 93 cents per share beat the Zacks Consensus Estimate by 2.1%. The bottom line increased 8.1% year over year. Total revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.1%. The top line improved 35.7% year over year. The upside can be primarily attributed to commission and fees, which grew 36% year over year to $1.6 billion and improved investment and other income. The Zacks Consensus Estimate for commission and fees was pegged at $1.6 billion. Organic revenues declined 2.8% to $1 billion in the quarter under review.
Investment income and other income increased 17.3% year over year to $27 million. Adjusted EBITDAC was $529 million, up 35.6% year over year. EBITDAC margin remained unchanged year over year to 32.9%.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2025 operating earnings of 94 cents per share, which beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 80.8% from the prior-year quarter. Operating revenues for the reported quarter were $449 million, up 3% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Gross premiums written decreased 2.1% year over year to $463.2 million. Our estimate was $505.2 million. Net investment income increased 9.2% year over year to $42.3 million. The Zacks Consensus Estimate was $42.9 million, while our estimate for the metric was pegged at $44.5 million. The investment portfolio’s total return was 1.5% in the quarter.
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Willis Towers Q4 Earnings & Revenues Beat Estimates on Lower Expenses
Key Takeaways
Willis Towers Watson Public Limited Company (WTW - Free Report) delivered fourth-quarter 2025 adjusted earnings of $8.12 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line increased 2% year over year.
The quarterly results of WTW were aided by expanded operating margins at the Health, Wealth & Career and Risk & Broking segments. Lower expenses also added to the upside.
Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise
Willis Towers Watson Public Limited Company price-consensus-eps-surprise-chart | Willis Towers Watson Public Limited Company Quote
Operational Update
Willis Towers posted adjusted consolidated revenues of $2.9 billion, which declined 3% year over year on a reported basis. Revenues increased 6% on an organic basis but declined 5% on a constant currency basis. The top line beat the Zacks Consensus Estimate by 2.5%.
The total costs of providing services decreased 10% year over year to $1.9 billion due to lower other operating expenses, amortization and transaction and transformation. Our estimate was pegged at $1.8 billion.
Adjusted operating income was $1 billion, which decreased 1% year over year. Margin expanded 80 basis points (bps) to 36.9%.
Adjusted EBITDA was $1.12 billion, down 3% year over year. Adjusted EBITDA margin was 38.2%, which expanded 30 bps year over year.
Quarterly Segment Update
Health, Wealth & Career: Total revenues of $1.6 billion declined 11% year over year (12% decrease on a constant currency basis but 6% increase on an organic basis), but beat the Zacks Consensus Estimate by 0.6%. Our estimate was pegged at $1.7 billion.
Health delivered organic revenue growth, which was led by double-digit increases in International due to strong client retention, new client wins, and healthcare inflation.
Wealth generated organic revenue growth from strong levels of Retirement work across all regions, as well as growth in the Investments business from new products, enhanced capital market conditions, and client wins.
Career organic revenue growth was primarily driven by robust demand for broad-based advisory services and compensation benchmarking survey work, as well as the impact of a change in survey delivery patterns. A book-of-business sale also contributed to Career’s revenue growth this quarter.
Benefits Delivery & Outsourcing organic revenue growth reflected higher commission revenue alongside higher levels of project and core administration work.
The operating margins expanded 240 basis points from the prior-year quarter to 44.3%, primarily due to the sale of TRANZACT.
Risk & Broking: Total revenues of $1.2 billion rose 10% year over year (7% increase in constant currency and on an organic basis) and beat the Zacks Consensus Estimate by 4.9%. Our estimate was $1.1 billion.
Corporate Risk & Broking had organic revenue growth, which is driven by higher levels of new business activity and strong client retention globally. Insurance Consulting and Technology's organic revenues declined modestly, reflecting clients' continued caution in managing expenses amid ongoing economic uncertainty.
The operating margins expanded 120 basis points from the prior-year quarter to 34.7%. The increase was primarily driven by operating leverage from strong organic revenue growth.
Financial Update
As of Dec. 31, 2025, cash and cash equivalents were $3.1 billion, up 65.7% from 2024-end.
Long-term debt increased 8.4% to $5.7 billion at quarter-end from 2024-end.
Shareholders’ equity increased 0.4% from the level on Dec. 31, 2025, to $7.9 billion as of Dec 31, 2024.
Cash flow from operations was $1.78 billion in 2025, up 17.8% from the prior-year period.
Free cash flow for 2025 increased 22% year over year to $1.55 billion. The increase was primarily due to operating margin expansion and the abatement of remaining Transformation program cash outflows.
Newfront acquisition
Willis Towers expected 10 cents dilutive to adjusted EPS in 2026.
The insurer projects 2026 post-close revenues to be $250 million and an adjusted EBITDA margin of 26%.
Newfront’s Total Rewards business segment (42%) will be included in HWC, and Newfront’s Business Insurance business segment (58%) will be included in R&B.
2026 Financial Considerations
Willis Towers expects continued annual margin expansion at the enterprise level, driven by 100 basis points of average annual margin expansion over the next two years in R&B and incremental annual margin expansion in HWC.
The insurer projects a foreign currency tailwind on adjusted diluted EPS of 30 cents in 2026 at current rates, with most of the tailwind coming in first-quarter 2026.
WTW expects continual improvement in FCF margin primarily from operating margin expansion, along with evolving our business mix.
Willis Towers expects share repurchases of $1.0 billion or greater, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities.
Full-Year Highlights
Adjusted earnings of $17.08 per share beat the Zacks Consensus Estimate by 1.2%. The bottom line increased 5% year over year.
Total revenues declined 2% from the year-ago quarter to about $9.7 billion. The top line beat the Zacks Consensus Estimate by 0.6%.
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 Other Brokerage Insurers
Arthur J. Gallagher & Co. (AJG - Free Report) reported fourth-quarter 2025 adjusted net earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 1.2%. The bottom line increased 11.7% on a year-over-year basis. Total revenues of $3.6 billion beat the Zacks Consensus Estimate by 0.3%. The top line also improved 33.8% year over year.
Arthur J. Gallagher’s total expenses increased 44.7% year over year to $3.4 billion in the reported quarter. Earnings before interest, tax, depreciation, and amortization and change in estimated acquisition earnout payables (EBITDAC) grew 3.3% from the prior-year quarter to $710 million.
Brown & Brown, Inc.’s (BRO - Free Report) fourth-quarter 2025 adjusted earnings of 93 cents per share beat the Zacks Consensus Estimate by 2.1%. The bottom line increased 8.1% year over year. Total revenues of $1.6 billion missed the Zacks Consensus Estimate by 2.1%. The top line improved 35.7% year over year. The upside can be primarily attributed to commission and fees, which grew 36% year over year to $1.6 billion and improved investment and other income. The Zacks Consensus Estimate for commission and fees was pegged at $1.6 billion. Organic revenues declined 2.8% to $1 billion in the quarter under review.
Investment income and other income increased 17.3% year over year to $27 million. Adjusted EBITDAC was $529 million, up 35.6% year over year. EBITDAC margin remained unchanged year over year to 32.9%.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2025 operating earnings of 94 cents per share, which beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 80.8% from the prior-year quarter. Operating revenues for the reported quarter were $449 million, up 3% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Gross premiums written decreased 2.1% year over year to $463.2 million. Our estimate was $505.2 million. Net investment income increased 9.2% year over year to $42.3 million. The Zacks Consensus Estimate was $42.9 million, while our estimate for the metric was pegged at $44.5 million. The investment portfolio’s total return was 1.5% in the quarter.