Second Quarter 2026
Filed Jul 30, 2026WTW Reports Second Quarter 2026 Earnings
Revenue, organic growth, adjusted operating income, adjusted margin and adjusted diluted EPS increased, while income from operations, net income, diluted EPS and reported operating margin declined versus the prior-year quarter.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $2,466 | – | Reported 9% | CC 8% | Organic 5% |
| Income from OperationsGAAP | $364 | – | (1)% |
| Operating MarginGAAP | 14.8% | – | (150) bps |
| Adjusted Operating Incomenon-GAAP | $480 | – | 15% |
| Adjusted Operating Marginnon-GAAP | 19.5% | – | 100 bps |
| Net IncomeGAAP | $231 | – | (30)% |
| Adjusted Net Incomenon-GAAP | $316 | – | 11% |
| Diluted EPSGAAP | $2.43 | – | (27)% |
| Adjusted Diluted EPSnon-GAAP | $3.35 | – | 17% |
| Adjusted EBITDAnon-GAAP | $529 million, or 21.5% of revenue | – | 13% |
| U.S. GAAP tax rateGAAP | 19.8% | – | – |
| Adjusted income tax ratenon-GAAP | 19.6% | – | – |
| Cash flows from operating activitiesGAAP | $474 million for the six months ended June 30, 2026 | – | – |
| Free cash flownon-GAAP | $360 million for the six months ended June 30, 2026 | – | an increase of $143 million |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Health, Wealth & CareerHealth delivered organic revenue growth with positive contributions from all regions. Wealth growth was supported by higher levels of retirement work across all regions. Career revenue was flat on an organic basis, while Benefits Delivery & Outsourcing revenue increased organically from expanded project work, new client wins and regulatory driven work in Outsourcing, partly offset by lower commissions in Individual Marketplace. | $1,270 | – | Reported 8% | CC 7% | Organic 4% |
| Risk & BrokingCorporate Risk & Broking organic revenue growth was driven by new business activity and strong client retention globally. Insurance Consulting and Technology growth was primarily from strong software sales in the Technology practice. | $1,164 | – | Reported 11% | CC 10% | Organic 7% |
Full-year 2026 and 2028 Propel target outlook
- NoteThe Company’s full-year 2026 guidance remains unchanged.
- NoteContinued annual margin expansion at the enterprise level.
- Note~100 basis points of annual margin expansion in R&B.
- NoteIncremental annual margin expansion in HWC.
- NoteHealth, Wealth & Career: Mid-single digits (MSD).
- NoteHealth: High-single digits (HSD).
- NoteWealth: Low-single digits (LSD).
- NoteCareer: LSD to MSD.
- NoteBD&O: LSD.
- NoteRisk & Broking: MSD.
- NoteCRB: MSD.
- NoteICT: LSD to MSD.
- NoteWillis Re joint venture: Expected to be a headwind on Adjusted Diluted EPS of ~$0.30.
- NoteThe remaining equity investments in the interest in earnings of associates line are not expected to be material in 2026.
- NoteNewfront acquisition: Expected to be ~$0.10 dilutive to Adjusted EPS in 2026.
- NoteExpected 2026 post-close revenue of ~$250M and an adjusted EBITDA margin of ~26%.
- NoteExpect share repurchases of $1.0B or greater, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities.
- NoteContinual improvement in FCF margin primarily from operating margin expansion along with evolving our business mix.
- NoteExpect an incremental foreign currency tailwind on Adjusted Diluted EPS of ~$0.05 for the remainder of 2026, resulting in a ~$0.35 tailwind for the full year 2026 at today's rates.
- NotePropel is expected to be completed by the end of 2028.
- NoteWTW expects to invest approximately $625 million of cash and incur approximately $25 million in non-cash charges to generate approximately $400 million in run-rate savings.
- NoteAfter reinvesting approximately $50 million to support growth, the Company expects to deliver approximately $350 million in net run-rate savings and approximately 30% adjusted operating margin in 2028.
Capital returns
- During the quarter ended June 30, 2026, the Company repurchased 1,733,574 of its outstanding shares for $450 million.
- The Board of Directors approved an increase to the existing share repurchase authority in the amount of $1.5 billion.
- The $1.5 billion increase is in addition to the approximately $500 million remaining on the current open-ended repurchase authority.
- Expect share repurchases of $1.0B or greater, subject to market conditions and potential capital allocation to organic and inorganic investment opportunities.
What drove it
- Consolidated organic revenue increased 5%.
- HWC operating margin increased 30 basis points from the prior-year second quarter to 24.1%, primarily driven by improved operating leverage and expense discipline.
- R&B operating margin increased 100 basis points from the prior-year second quarter to 22.2%, primarily driven by operating leverage.
- Propel is intended to embed artificial intelligence and automation across the enterprise, enhance client service, create additional growth opportunities and streamline core operating processes.
- The acquisition of Newfront supports the Company's investments in AI, data and technology.
Concerns
- Income from Operations was $364, compared to $368 in the prior-year second quarter.
- Operating Margin was 14.8%, compared to 16.3% in the prior-year second quarter.
- Net Income was $231 million, compared to $332 million in the prior-year second quarter.
- Diluted EPS was $2.43, down 27% over prior year.
- Career revenue was flat on an organic basis, with constrained revenue in the Middle East due to the ongoing conflict.
- Lower commissions in Individual Marketplace partially offset BD&O revenue growth.
- The Willis Re joint venture is expected to be a headwind on Adjusted Diluted EPS of ~$0.30.
- Newfront acquisition is expected to be ~$0.10 dilutive to Adjusted EPS in 2026.
What to watch
- Delivery of continued annual margin expansion at the enterprise level and ~100 basis points of annual margin expansion in R&B.
- HWC segment growth across Health, Wealth, Career and BD&O.
- The expected 2026 post-close revenue of ~$250M and adjusted EBITDA margin of ~26% for Newfront.
- Execution of Propel, including approximately $625 million of cash investment, approximately $25 million in non-cash charges and approximately $400 million in run-rate savings.
- Progress toward approximately 30% adjusted operating margin in 2028.
- Share repurchases of $1.0B or greater, subject to market conditions and potential capital allocation opportunities.
- Foreign currency's expected incremental tailwind on Adjusted Diluted EPS of ~$0.05 for the remainder of 2026.
Balance sheet and cash flow
- Cash flows from operating activities were $474 million for the six months ended June 30, 2026, compared to $326 million in the prior year.
- Free cash flow for the six months ended June 30, 2026 and 2025 was $360 million and $217 million, respectively, an increase of $143 million.
- The increase in free cash flow was primarily driven by operating margin expansion.
Analysis
WTW reported second-quarter revenue of $2,466, up Reported 9% | CC 8% | Organic 5% from $2,261 in the prior-year quarter. Both operating segments expanded organically, led by Risk & Broking at 7%, while Health, Wealth & Career grew 4%. R&B growth reflected new business activity, strong client retention and Technology software sales. HWC benefited from broad regional Health contributions, retirement work in Wealth, and expanded Outsourcing project, client-win and regulatory activity.
Profitability was split between reported and adjusted measures. Income from Operations was $364 versus $368, and GAAP Operating Margin was 14.8% versus 16.3%. In contrast, Adjusted Operating Income increased to $480 from $419, while Adjusted Operating Margin rose to 19.5% from 18.5%. Segment operating margins also improved, with HWC at 24.1% and R&B at 22.2%, supported by operating leverage and, in HWC, expense discipline.
GAAP bottom-line results declined despite adjusted earnings growth. Net Income was $231 million compared with $332 million, and Diluted EPS was $2.43 compared with $3.32. Adjusted Net Income increased to $316 from $285, and Adjusted Diluted EPS rose to $3.35 from $2.86. Adjusted EBITDA increased to $529 million, or 21.5% of revenue, from $470 million, or 20.8% of revenue.
Cash generation improved over the six-month period. Cash flows from operating activities were $474 million, compared with $326 million in the prior year, while free cash flow was $360 million compared with $217 million. The company attributed the free-cash-flow increase primarily to operating margin expansion. WTW repurchased 1,733,574 shares for $450 million during the quarter and expanded its repurchase authorization by $1.5 billion, in addition to approximately $500 million remaining under the open-ended authority.
Full-year 2026 guidance remains unchanged. Management continues to expect enterprise margin expansion, including ~100 basis points of annual margin expansion in R&B, and expects share repurchases of $1.0B or greater. The new Propel plan targets approximately 30% adjusted operating margin in 2028, supported by expected approximately $400 million in run-rate savings and approximately $350 million in net run-rate savings after reinvestment. Items requiring attention include flat organic Career revenue, constrained Middle East revenue, the expected Willis Re joint-venture headwind, and expected Newfront dilution to Adjusted EPS in 2026.
Management, verbatim
WTW delivered solid second quarter results, reflecting business momentum and disciplined execution.
Carl Hess, WTW’s Chief Executive Officer
We remain confident in delivering on our full-year 2026 guidance and achieving our new 2028 margin target.
Carl Hess, WTW’s Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter comparisons for revenue, income from operations, operating margins, net income, EPS, Adjusted EBITDA, cash flow and segment revenue.
- Gross profit and gross margin.
- Total operating expenses.
- Cash balance.
- Debt balance.
- Dividend declaration or payment.
- GAAP and adjusted tax-rate prior-year comparisons.
- Full-year 2026 total revenue guidance.
- Full-year 2026 gross-margin guidance.
- Full-year 2026 operating-expense guidance.
- Full-year 2026 tax-rate guidance.
- Previous-release outlook needed to compare reported results with prior guidance.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.