Willis Towers Watson(WTW) - 2025 Q1 - Quarterly Report

Revenue Performance - Revenue for Q1 2025 was $2.2 billion, a decrease of$118 million, or 5%, compared to Q1 2024's $2.3 billion[127] - Organic revenue growth for Q1 2025 was 5$1.2 billion for Q1 2025, down 13% from $1.3 billion in Q1 2024, with organic growth of 3$1.0 billion, a 6% increase from $950 million in Q1 2024, with organic revenue growth of 8$2,223 million, reflecting a 5% decrease compared to $2,341 million for the same period in 2024[202] - For the three months ended March 31, 2025, as-reported revenue decreased by 5$432 million, representing 19% of revenue, an increase from 12% in Q1 2024[126] - Net income attributable to the company for Q1 2025 was $235 million, or$2.33 per diluted share, compared to $190 million, or$1.83 per diluted share in Q1 2024[126] - Segment operating income for Q1 2025 was $226 million, up from$203 million in Q1 2024, primarily due to strong organic revenue growth and transformation savings[146] - Net income attributable to WTW for Q1 2025 was $235 million, a 24$190 million in Q1 2024[158] - Adjusted operating income for the same period was $480 million, a slight decrease from$483 million in 2024, primarily due to lower revenue from the sale of the TRANZACT business[207] - Adjusted EBITDA for the three months ended March 31, 2025, was $532 million, down from$546 million in 2024, attributed to lower revenue from the TRANZACT sale[211] - Adjusted operating income margin improved to 21.6% in 2025 from 20.6% in 2024, reflecting better core operating results despite revenue challenges[207] Costs and Expenses - Total costs of providing services for Q1 2025 were $1.791 billion, compared to$2.061 billion in Q1 2024[126] - Total costs of providing services decreased by $270 million, or 13$1.8 billion in Q1 2025 from $2.1 billion in Q1 2024[147] - Salaries and benefits for Q1 2025 were$1.3 billion, representing 60% of revenue, compared to 57% in Q1 2024[148] Cash Flow and Capital Management - Cash and cash equivalents at March 31, 2025 totaled $1.5 billion, down from$1.9 billion at December 31, 2024, primarily due to share repurchases and dividend payments[166] - Cash flows used in operating activities were $35 million in Q1 2025, compared to cash flows from operating activities of$24 million in Q1 2024[169] - Cash flows used in investing activities for Q1 2025 were $84 million, compared to$74 million in Q1 2024, mainly for capital expenditures[171] - Cash flows from financing activities for Q1 2025 were $24 million, significantly lower than$1.6 billion in Q1 2024, which included substantial debt issuance[172] - Free cash flow for the three months ended March 31, 2025, was negative at $(86) million, compared to$(36) million in 2024, primarily due to the absence of cash collections related to TRANZACT[223] Debt and Equity - As of March 31, 2025, total debt was $5,310 million, with long-term debt at$4,761 million and current debt at $549 million, showing a slight increase from$5,309 million total debt on December 31, 2024[175][179] - Total shareholders' equity increased to $8,133 million as of March 31, 2025, compared to$7,940 million on December 31, 2024, resulting in a capitalization ratio of 39.5%[175] - The company had fiduciary funds of $3.8 billion as of March 31, 2025, up from$3.4 billion on December 31, 2024[179] - The board of directors approved a $1.0 billion increase to the share repurchase program, bringing the total authorization to$10.2 billion since its inception[181] Taxation - The effective tax rate for Q1 2025 was 21.5%, up from 19.9% in Q1 2024, primarily due to changes in geographical income distribution[157] - The U.S. GAAP tax rate for the three months ended March 31, 2025, was 21.5%, compared to 19.9% in 2024, influenced by changes in geographical income distribution[220] - The adjusted income tax rate for the same period was 22.7%, slightly higher than 22.3% in 2024, also affected by geographical income distribution changes[221] Strategic Focus - The company is focused on developing technology, data, and analytic solutions to enhance service delivery and meet client needs amid increasing competition[118] - The company emphasizes the importance of constant currency and organic change measures to provide transparency in performance, excluding foreign currency fluctuations and transaction-related impacts[204]