WTW Adjusted EPS Jumps 18% as Margin Widens on Expense Discipline

WTW posted an 18% jump in third-quarter adjusted earnings per share on Thursday, as the insurance broker and consulting firm widened its adjusted operating margin by 150 basis points on expense discipline and growth in both of its businesses.

Adjusted diluted EPS rose to $3.63 from $3.07 a year earlier, according to the earnings release WTW filed with an 8-K on Thursday. Revenue increased 8% to $2.46 billion from $2.29 billion, with organic growth of 4%.

Margins move in opposite directions

On a GAAP basis, diluted EPS rose 4% to $3.24, and net income edged up to $309 million from $306 million. Operating margin slipped 90 basis points to 17.4%, while adjusted operating margin rose to 21.9% from 20.4%. Adjusted operating income climbed 15% to $539 million, and adjusted EBITDA rose 12% to $577 million.

"WTW delivered another quarter of solid results in the face of a volatile market environment, reflecting the strength and resilience of our business," CEO Carl Hess said in the release. "Our strategy is working."

Both segments grow

The Health, Wealth & Career segment grew revenue 7% to $1.35 billion, with organic growth of 4%. Health grew in all regions on new business and strong renewals, and Career benefited from higher compensation survey sales. Benefits Delivery & Outsourcing declined organically as lower commissions in Individual Marketplace outweighed gains elsewhere. The segment's operating margin rose 90 basis points to 29.5%.

Risk & Broking revenue rose 8% to $1.09 billion, with organic growth of 5%, driven by new business in North America and International and higher book-of-business settlement activity. The segment's operating margin improved 100 basis points to 19.8%.

AI plan and capital returns

WTW gave an early look at Propel, the AI acceleration plan its board approved on July 28 that runs through 2028. The company expects to invest about $625 million in cash and incur about $25 million in non-cash charges to generate about $400 million in run-rate savings. After reinvesting about $50 million, it expects roughly $350 million in net run-rate savings and an adjusted operating margin of about 30% in 2028.

Through Sept. 30, Propel had generated $18 million of annualized run-rate savings, against $14 million of restructuring costs and $7 million of transaction and program expenses.

"While Propel, our AI Acceleration Plan, is in its early days, I'm excited by the initial impact we're seeing as we scale AI to enhance client service," Hess said.

WTW repurchased 687,386 shares for $220 million in the quarter and said it expects 2026 buybacks in excess of $1.0 billion, subject to market conditions. Free cash flow for the first nine months rose by $226 million to $1.1 billion, mainly on operating margin expansion.

2026 considerations

For 2026, WTW continues to expect mid-single-digit organic revenue growth at the enterprise level and continued annual adjusted margin expansion, including about 100 basis points in Risk & Broking. It expects its Willis Re joint venture to be a headwind of about 30 cents on adjusted EPS and the Newfront acquisition to be about 10 cents dilutive, while foreign currency is expected to provide a tailwind of about 35 cents for the full year at current rates.

Sources

1. WTW Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0001171843-26-006942)

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