WTW saw its first-quarter 2026 revenue climb 8% to US$2.41 billion from US$2.22 billion a year earlier, but the insurance broker's results drew a cool reception from investors as organic growth trailed rivals across the broking sector.

Revenue at the New York-listed advisory, broking and solutions firm rose 4% on a constant-currency basis and 3% organically. Net income for the quarter ended March 31 reached US$303 million, up from US$239 million, lifting diluted earnings per share 33% to US$3.10.

Adjusted diluted EPS came in at US$3.72, a 19% gain that beat the US$3.49 consensus estimate.

Yet the headline beat masked softer underlying momentum. Income from operations rose 4% to US$448 million, with the operating margin narrowing 80 basis points to 18.6%. Adjusted operating income climbed 12% to US$537 million, pushing the adjusted operating margin up 70 basis points to 22.3%.

Adjusted EBITDA reached US$589 million, or 24.4% of revenue, against US$532 million, or 23.9%, a year earlier.

The 3% organic growth figure placed WTW at the bottom of the listed broking cohort. Aon posted 5% organic growth in the quarter, Marsh 4%, and Arthur J. Gallagher 5%, drawing from each firm's first-quarter disclosures.

Marsh executives told analysts the commercial property and casualty rate environment had softened, pointing to an industry-wide pricing headwind rather than a stumble unique to WTW.

Discretionary spending pulls back

Chief executive Carl Hess (pictured above) pinned the quarter's mixed showing on a tougher operating backdrop. "Our ongoing focus on enhancing efficiency drove margin expansion and significant EPS growth, despite a more challenging global market that created near-term headwinds to organic growth," he said.

Risk & Broking president Lucy Clarke told analysts on the earnings call that the unit had missed new business targets and faced a stiff prior-year comparable, with international markets bearing the brunt of geopolitical pressures.

Health, Wealth & Career president Julie Gebauer flagged conditions in the Middle East and client caution on discretionary projects as the main drags, casting both as transient.

Career, the segment most exposed to advisory work, shrank 4% organically. Health grew 6% and Wealth 5%, the transcript showed. Management has nudged full-year organic growth guidance toward the lower end of its mid-single-digit range.

Cash used in operations narrowed to US$10 million from US$35 million, while free cash flow improved by US$21 million to negative US$65 million, reflecting margin gains and the wind-down of the Transformation program completed in December 2024.

WTW bought back US$300 million of stock during the quarter and expects full-year repurchases of US$1.0 billion or more. As previously guided, the firm sees about 100 basis points of average annual adjusted operating margin expansion in Risk & Broking over the next two years, with smaller gains in Health, Wealth & Career.

The Willis Re joint venture is set to weigh on adjusted diluted EPS by around US$0.30, with the Newfront acquisition adding another US$0.10 of dilution. Foreign currency tailwinds are expected to deliver a full-year benefit of about US$0.35 at current rates.