WTW — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue increased 8% year-over-year to $2.46 billion for the quarter; organic revenue growth was 4%.
• Diluted earnings per share (EPS) were $3.24, a 4% increase from the prior year; adjusted diluted EPS was $3.63, an 18% increase.
• Operating margin was 17.4%, down 90 basis points from the prior year; adjusted operating margin was 21.9%, up 150 basis points.
• Net income was $309 million, up 1% from the prior year; adjusted net income was $339 million, up 13%.
• Adjusted EBITDA was $577 million (23.5% of revenue), up 12% from the prior year's $515 million (22.5% of revenue).
• Cash flows from operating activities were $1.2 billion for the nine months ended September 30, 2026, compared to $1.0 billion in the prior year.
• Free cash flow for the nine months ended September 30, 2026, was $1.1 billion, an increase of $226 million from the prior year.
• Current debt was $749 million as of September 30, 2026, compared to $550 million as of December 31, 2025; long-term debt was $5.78 billion.

Guidance and Future Outlook:

• Enterprise organic revenue is expected to be in the mid-single digits for 2026.
• Health segment organic revenue is expected to be in the high-single digits; Wealth and Career in the low-single digits; BD&O flat; Risk & Broking and CRB in the mid-single digits; ICT in the low-single digits.
• The Willis Re joint venture is expected to be a headwind on adjusted diluted EPS of approximately $0.30 for 2026.
• The Newfront acquisition is expected to be approximately $0.10 dilutive to adjusted EPS in 2026.
• Foreign exchange is expected to provide an incremental tailwind of approximately $0.02 on adjusted diluted EPS for Q4 2026, resulting in a ~$0.35 tailwind for the full year 2026.
• The company expects to invest approximately $625 million of cash and incur $25 million in non-cash charges for the Propel AI Acceleration Plan to generate approximately $400 million in run-rate savings.
• After reinvesting approximately $50 million to support growth, the company expects to deliver approximately $350 million in net run-rate savings and achieve a 30% adjusted operating margin in 2028.
• Share repurchases are expected to exceed $1.0 billion in 2026, subject to market conditions and capital allocation opportunities.

Business Segments and Product Lines:

• Health, Wealth & Career (HWC): Revenue was $1.35 billion, up 7% reported and 4% organic. Operating margin increased 90 basis points to 29.5%. Health delivered organic growth driven by new business and strong renewals. Wealth growth was supported by Retirement work outside North America and new client wins. Career growth was driven by higher compensation survey sales and increased communications project work. BD&O organic revenue declined due to lower commissions in Individual Marketplace, offset by new client wins and regulatory-driven activity.
• Risk & Broking (R&B): Revenue was $1.09 billion, up 8% reported and 5% organic. Operating margin increased 100 basis points to 19.8%. Corporate Risk & Broking (CRB) grew organically driven by strong new business in North America and International and higher book-of-business settlement activity. Insurance Consulting and Technology (ICT) delivered organic growth primarily from strong software sales, partially offset by lower consulting revenue.
• Propel AI Acceleration Plan: Approved July 28, 2026, to extend through December 31, 2028, embedding AI and automation across the company. Costs incurred to date include $14 million in restructuring costs and $7 million in transaction and program expenses. Annualized run-rate savings achieved to date are $18 million.
• Newfront Acquisition: Expected 2026 post-close revenue of approximately $250 million with an adjusted EBITDA margin of approximately 26%. Newfront's Total Rewards business (~42%) is included in HWC, and Business Insurance business (~58%) is included in R&B.

Market and Competitive Landscape:

• The company operates in a volatile market environment, citing strength and resilience in its business model.
• Investments in talent, technology, and innovation are positioned to differentiate WTW in the market.
• The company serves more than 140 countries and markets.

Risks and Challenges:

• Forward-looking statements are subject to risks including macroeconomic trends (inflation, interest rates, trade policies, geopolitical risks), changes in general economic conditions, and business interruptions.
• Specific risks include the ability to successfully execute the Propel AI Acceleration Plan, integrate acquired businesses, and realize anticipated cost savings.
• Risks related to cybersecurity, data privacy, and compliance with evolving regulations regarding artificial intelligence and data protection.
• Risks associated with foreign currency fluctuations, pension asset/liability fluctuations, and changes in tax laws.
• Potential adverse impacts from natural or man-made disasters, including pandemics, and conflicts such as the Russia-Ukraine war and Middle East conflict.

Management Commentary and Tone:

• Carl Hess, CEO, stated the company delivered "solid results in the face of a volatile market environment," reflecting the strength and resilience of the business.
• Management expressed confidence that their strategy is working and that investments in talent, technology, and innovation are sustaining momentum.
• The CEO noted excitement regarding the initial impact of the Propel AI Acceleration Plan as it scales to enhance client service, unlock growth, strengthen colleague experience, and drive efficiency.
• Management cited continued strategic progress and the strength of the client proposition as reasons for confidence in creating durable long-term value.

Other Key Points:

• During the quarter ended September 30, 2026, the Company repurchased 687,386 outstanding shares for $220 million.
• The period included $29 million of cash proceeds from the disposal of buildings and related improvements.
• The U.S. GAAP tax rate for the quarter was 19.5%, and the adjusted income tax rate was 21.9%.
• The company hosts a conference call on October 29, 2026, at 9:00 a.m. Eastern Time to discuss results and strategic priorities.
• The company does not reconcile forward-looking non-GAAP financial measures to U.S. GAAP measures due to variability and difficulty in making accurate forecasts.