Willis Towers Watson Public Limited Company (NASDAQ:WLTW) Q1 2019 Earnings Conference Call Transcript
May 01, 2019 • 09:00 am ET
John J. Haley
This is demonstrated by our recent announcement to acquire TRANZACT. We extremely excited to bring TRANZACT into our Willis Towers Watson family. They bring exceptional talent and capabilities to bear, including a leading technology-driven, direct-to-consumer solution platform and we think there will be a great fit within our company.
This pending acquisition is an excellent example of our focus on investing in areas that deliver a sustainable competitive advantage. We continually look to identify investment opportunities that are high margin or have a prospect of getting to relatively high margin. Similarly, we like them to be adjacent to our core business and have the potential to disrupt their transforms some existing value chains. We believe TRANZACT checks the boxes across the board and represents a tremendous growth opportunity in the Medicare space.
By leveraging Willis Towers Watson technological infrastructure and scale with TRANZACT's telesales and digital marketing expertise, we will have exceptional distribution and enrollment capabilities as well as a broadening position in the rapidly growing Medicare space. Further, we look forward to unlocking the synergies between the two companies and as we execute on our plans.
Overall, we are excited about the step and what it means for Willis Towers Watson, for our colleagues and for our shareholders, as the next step of significant value creation. At this time, we are still in the regulatory approval process and we expect to -- we continue to expect closing will occur in the third quarter of 2019.
Now let's move on to our quarter one 2019 results. Reported revenue for the first quarter was $2.3 billion, up 1% as compared to the prior year first quarter and up 5% on a constant currency and organic basis. The reported revenue included $84 million of negative currency movement. Once again this quarter, we experienced growth on an organic basis across all of our segments.
Net income was $293 million, up 33% for the first quarter, as compared to the $221 million of net income in the prior year first quarter. Adjusted EBITDA was $601 million, or 26% of revenues, as compared to the prior year adjusted EBITDA for the first quarter of $557 million, or 24.3% of revenues, representing an 8% increase on an adjusted EBITDA dollar basis and 170 basis points of margin improvement.
For the quarter, diluted earnings per share were $2.15, an increase of 34% compared to the prior year. Adjusted diluted earnings per share were $2.98, reflecting an increase of 10% compared to prior year. Overall, it was a solid quarter. We grew revenue and earnings per share and had enhanced adjusted EBITDA margin performance.
Now let's look at each of the segments in more detail. To provide clear comparability with prior periods, all commentary regarding the results of our segments will be on an organic basis, unless specifically stated otherwise. Segment margins are calculated using segment revenues and exclude unallocated corporate costs such as amortization of intangibles, certain transaction and integration expenses resulting from mergers and acquisitions, as