Willis Towers Watson Reports 6% Revenue Growth, Substantial Losses in Q3 2024

Willis Towers Watson PLC reported significant financial results for the three and nine months ended September 30, 2024, reflecting both revenue growth and substantial losses. For the third quarter of 2024, the company achieved revenue of $2,289 million, a 6% increase from $2,166 million in the same period of 2023. For the nine months, revenue rose to $6,895 million, up 5% from $6,569 million year-over-year. The growth was attributed to strong performances across both segments, Health, Wealth & Career (HWC) and Risk & Broking (R&B).

Despite the revenue increases, Willis Towers Watson reported a net loss of $(1,675) million for the third quarter, a stark contrast to a net income of $136 million in the same quarter of 2023. For the nine months, the net loss was $(1,344) million, compared to a net income of $433 million in the prior year. The losses were primarily driven by a $1.0 billion goodwill impairment charge related to the pending sale of the TRANZACT business, alongside a loss on disposal of operations amounting to $1.19 billion.

Total costs of providing services surged to $3,055 million for the third quarter, up from $2,007 million in 2023, and $7,169 million for the nine months, compared to $5,983 million in the previous year. This increase in costs was influenced by higher salaries and benefits, which rose by 3% to $1.4 billion for the third quarter, and other operating expenses that also saw a 6% increase.

The company is undergoing a Transformation Program initiated in Q4 2021, aimed at enhancing operations and optimizing technology, with expected annual cost savings exceeding $450 million by the end of 2024. As of September 30, 2024, the total costs associated with this program reached $272 million for the nine months, with cumulative restructuring costs of $222 million.

Cash and cash equivalents as of September 30, 2024, totaled $1,372 million, a slight decrease from $1,424 million at the end of 2023. The company reported a significant increase in cash, cash equivalents, and restricted cash to $4,712 million, compared to $3,732 million a year earlier.

In terms of strategic developments, Willis Towers Watson announced an agreement to sell its direct-to-consumer Medicare coverage business, TRANZACT, for $632 million, with completion expected by the end of 2024. The company also repurchased $506 million of shares during the nine months, with an additional $837 million authorized for repurchase.

Overall, while revenue growth was evident, the substantial losses and strategic shifts highlight the challenges faced by Willis Towers Watson in the current market environment.