A global advisory, broking, and consulting firm, WTW helps companies navigate risk and manage their people, from placing insurance coverage on planes and ships to designing retirement plans and employee benefits. It serves clients in over 140 countries through two arms: Health, Wealth & Career and Risk & Broking. The firm was born from a 2016 "merger of equals" between insurance broker Willis Group (whose London roots reach back to 1828 at Lloyd's) and consulting firm Towers Watson. In 2022 it shortened its name to just WTW—the initials everyone already used—to unify the company as "One WTW."
Q2 FY2026 net income fell 31% to $229M as costs and taxes rose despite 9% revenue growth
fell 31% this quarter even as grew. Revenue rose 9.1% to $2,466M with 5% , but dropped 26.8% to $2.43 as higher salaries, $61M in transaction costs, and a swing to a $57M tax provision cut into results. The company is growing top-line while cost and integration pressures weigh on the bottom line.
Key takeaways
attributable to WTW fell 30.8% to $229M as higher salary and benefit costs, $61M of transaction and integration expenses versus $2M a year earlier, and a swing from a $21M tax benefit to a $57M provision drove the decline.
rose 9.1% to $2,466M with 5% , aided by an $21M currency ; revenue rose 11% to $1.2B (7% organic) and rose 8% to $1.3B (4% organic).
Total costs of providing services rose 11% to $2.1B, with salaries and benefits up 7% and other operating expenses up 13%, offsetting the gain.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 9% to $2.5B, organic growth 5%, but net income fell 31% to $229M on higher costs and taxes.
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Consolidated grew 9% as-reported to $2.5B, with of 5% driven by both segments; currency translation added $21M.
was $484M in the quarter, up 34.1% , and rose 40.3% to $425M; H1 operating cash flow was $474M versus $326M.
Interest income fell to $33M for the quarter and $73M for the half from $40M and $79M a year earlier as short-term rates declined from end-of-2024 levels.
The AI acceleration plan was added as a risk factor, citing potential role reductions, correlated errors, regulatory exposure, and no assurance of expected savings.
What changed
The $750M earnout flagged in the FY2025 10-K and Q1 FY2026 was not reported as received in this Q2 filing; fell 8.3% sequentially to $5,781M from $6,304M at March 31, suggesting the early-2026 $550M maturity was addressed.
Organic was 5% in Q2, above the 3% in Q1 FY2026, recovering partway toward the 5% FY2025 full-year pace flagged to watch.
Q2 turned positive at $484M after Q1's -$10M use, confirming the flagged expectation that it would turn positive after integration payouts.
at $5,781M remains 21.4% above the $4,762M a year earlier, reflecting acquisition funding even after the sequential decline.
of $229M fell 30.8% versus the Q2 2025 base that had been lifted by the absence of sale and program costs, reversing the prior two quarters of year-over-year net income growth.
What to watch
Q3 FY2026 organic to confirm the 5% Q2 rate holds without and under the CMS 2025 Medicare rule
Receipt timing of the $750M earnout and its effect on cash and in 2026
Q3 2026 after the $484M Q2 generation amid continued integration costs
path from $5,781M as and the integration interact through H2 2026
(HWC) rose 8% to $1.3B, with of 4% led by Health and Wealth, while Career was flat and BD&O grew organically.
(R&B) increased 11% to $1.2B, with of 7% from new business and strong retention in and software sales in .
Total costs of providing services rose 11% to $2.1B, driven by higher salaries and benefits (+7%), transaction and integration expenses ($61M vs. $2M), and other operating expenses (+13%).
attributable to WTW decreased 31% to $229M, primarily due to higher salary, incentive, and benefit costs, increased transaction expenses, and a swing in income taxes from a $21M benefit to a $57M provision.
was $474M for H1 2026, up from $326M; improved to $360M, supported by expansion, while $1.2B was used in investing activities mainly for acquisitions.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk from fiduciary funds remains the primary market risk, with no material changes from prior disclosures.
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The company holds $2.9 billion in in interest-bearing accounts as of June 30, 2026.
A 25 change in short-term rates would impact annualized interest income by approximately $7 million.
Interest income was $33 million and $73 million for the three and six months ended June 30, 2026, down from $40 million and $79 million in the prior year.
Short-term rates have declined from end-of-2024 levels, with central banks reducing rates, but remained in line with expectations through Q2 2026.
The company maintains a global investment policy to diversify cash investments and minimize counterparty risk.
From time to time, we are a party to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The disclosure called for by Part II, Item 1 regarding our legal proceedings is incorporated by reference herein from Part I, Item 1 Note 13 — Commitm…
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From time to time, we are a party to various lawsuits, arbitrations or mediations that arise in the ordinary course of business. The disclosure called for by Part II, Item 1 regarding our legal proceedings is incorporated by reference herein from Part I, Item 1 Note 13 — Commitments and Contingencies - Legal Proceedings of the notes to the condensed consolidated financial statements in this Form 10-Q for the quarter ended June 30, 2026.
The AI acceleration plan creates operational, financial, and reputational risks, with no assurance of achieving intended benefits or savings.
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The AI acceleration plan may reduce or restructure roles, distract human capital, and slow platform enhancements, harming growth and client responsiveness.
AI initiatives could cause correlated errors, regulatory and privacy exposures, IP challenges, cybersecurity risks, and reputational damage.
Governance processes may not sufficiently mitigate risks given the plan's complexity, scale, and limited implementation time.
Human capital challenges and cultural changes may not be managed successfully, risking key employee retention and engagement.
Delays, unexpected costs, or failure to meet targets could diminish operational and financial benefits, with no assurance of achieving expected savings on the anticipated timeline.