[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2025, show a year-over-year increase in total revenues for both the second quarter and the first six months, with net income attributable to shareholders decreasing in Q2 2025 but increasing for the six-month period, while the balance sheet indicates a stable financial position and improved cash flow from operations Consolidated Statements of Operations Highlights (In thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $334,595 | $326,853 | $657,934 | $639,926 | | **Income Before Income Taxes** | $13,665 | $12,988 | $22,885 | $16,814 | | **Net Income Attributable to Shareholders** | $7,782 | $8,584 | $14,466 | $11,421 | | **Diluted EPS (Class A & B)** | $0.16 | $0.17 | $0.29 | $0.23 | Consolidated Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $376,173 | $374,227 | | **Total Assets** | $799,365 | $803,755 | | **Total Current Liabilities** | $281,110 | $299,727 | | **Total Liabilities** | $624,024 | $648,204 | | **Total Shareholders' Investment** | $175,341 | $155,551 | Consolidated Cash Flow Highlights (In thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $21,083 | $(8,253) | | **Net cash used in investing activities** | $(18,278) | $(18,449) | | **Net cash (used in) provided by financing activities** | $(1,078) | $15,655 | | **Increase (Decrease) in Cash** | $2,590 | $(11,202) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the basis of presentation, revenue recognition policies by segment, and other key accounting considerations, including an increased effective tax rate due to a one-time foreign tax expense and segment performance data - The company operates through four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[31](index=31&type=chunk) - The effective income tax rate for Q2 2025 increased to **42.8%** from **34.5%** in Q2 2024, and for H1 2025 increased to **36.4%** from **32.9%** in H1 2024, primarily due to a one-time expense of **$1.3 million** relating to administrative guidance from a foreign tax authority[59](index=59&type=chunk)[60](index=60&type=chunk) - As of June 30, 2025, the company had **$113.4 million** of remaining performance obligations, with approximately **73%** expected to be recognized as revenue within one year[53](index=53&type=chunk) Revenues Before Reimbursements by Segment (In thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $78,074 | $76,030 | $157,814 | $153,395 | | International Operations | $109,070 | $102,283 | $213,464 | $200,375 | | Broadspire | $100,617 | $97,087 | $197,001 | $191,385 | | Platform Solutions | $35,236 | $38,827 | $66,750 | $70,726 | | **Total** | **$322,997** | **$314,227** | **$635,029** | **$615,881** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 2.8% increase in consolidated revenues before reimbursements for Q2 2025, driven by growth in North America Loss Adjusting, International Operations, and Broadspire, partially offset by a decline in Platform Solutions, with stronger constant currency revenue growth and improved liquidity [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Consolidated revenues before reimbursements rose by 2.8% to **$323.0 million** in Q2 2025 and by 3.1% to **$635.0 million** in H1 2025, with constant currency growth of 3.0% for the quarter and 3.9% for the half-year, primarily driven by North America Loss Adjusting, International Operations, and Broadspire segments, while SG&A expenses increased by 8.4% in Q2 due to a one-time indirect tax expense Q2 2025 Revenue Growth vs. Q2 2024 (Constant Currency) | Segment | % Variance (Reported) | % Variance (Constant Currency) | | :--- | :--- | :--- | | North America Loss Adjusting | 2.7% | 3.0% | | International Operations | 6.6% | 6.9% | | Broadspire | 3.6% | 3.6% | | Platform Solutions | (9.2)% | (9.2)% | | **Total** | **2.8%** | **3.0%** | - SG&A expenses increased by **$6.1 million** (**8.4%**) in Q2 2025, largely due to a one-time indirect tax expense of **$3.1 million**, increased IT costs, and higher administrative compensation[113](index=113&type=chunk) - Total cases received decreased by **3.7%** in Q2 2025 and **4.6%** in H1 2025, driven by International Operations and Platform Solutions, while North America Loss Adjusting saw a significant increase due to the transfer of low-value inspection cases[111](index=111&type=chunk)[112](index=112&type=chunk) [Segment Performance](index=35&type=section&id=Segment%20Performance) Segment performance varied in Q2 2025, with International Operations and Platform Solutions showing strong growth in operating earnings due to cost efficiencies, while North America Loss Adjusting and Broadspire experienced declines despite revenue growth, positioning International Operations as the largest revenue segment and Broadspire as the most profitable Segment Operating Earnings (In thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $4,595 | $4,885 | (5.9)% | | International Operations | $7,636 | $5,702 | 33.9% | | Broadspire | $13,652 | $15,091 | (9.5)% | | Platform Solutions | $3,132 | $1,469 | 113.2% | - North America Loss Adjusting case volume increased **42.2%** in Q2 2025, primarily due to the transfer of **24,100** low-value inspection services cases from the Platform Solutions segment[138](index=138&type=chunk) - Platform Solutions' operating earnings increased **113.2%** in Q2 2025, driven by cost reductions related to the transfer of low-value inspection services, an increase in average rates, and lower compensation costs[165](index=165&type=chunk) [Liquidity, Capital Resources, and Financial Condition](index=52&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Financial%20Condition) The company's financial condition improved, with working capital increasing by **$20.6 million** to **$95.1 million** at June 30, 2025, and cash from operating activities turning around to a source of **$21.1 million** in H1 2025, contributing to a total liquidity of **$277.8 million** - Cash provided by operating activities increased to **$21.1 million** for H1 2025, compared to an **$8.3 million** use of cash in H1 2024, driven by higher earnings and working capital improvements[191](index=191&type=chunk) - Total liquidity at June 30, 2025 was **$277.8 million**, consisting of cash on hand and borrowing capacity under the Credit Facility[195](index=195&type=chunk) - Working capital increased by **$20.6 million** to **$95.1 million** at June 30, 2025, from December 31, 2024[188](index=188&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its exposures to market risk have not changed materially since December 31, 2024, as detailed in its Annual Report on Form 10-K - There have been no material changes in the company's market risk exposures since the end of the last fiscal year[206](index=206&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded that they were effective as of June 30, 2025, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[209](index=209&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[210](index=210&type=chunk) [Part II. Other Information](index=50&type=section&id=Part%20II.%20Other%20Information) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The company refers to the risk factors detailed in its Annual Report on Form 10-K for the year ended December 31, 2024, stating that those factors could materially affect its business, financial condition, or results of operations - The company directs investors to the risk factors disclosed in its 2024 Form 10-K, indicating no material updates in this quarterly report[212](index=212&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any of its Class A or Class B common stock during the second quarter of 2025, but had remaining authorization to repurchase **1,089,809 shares** under its existing plan through December 31, 2025 - No shares of CRD-A or CRD-B common stock were repurchased during the three months ended June 30, 2025[214](index=214&type=chunk) - As of June 30, 2025, the company has authorization to repurchase an additional **1,089,809 shares** through December 31, 2025[213](index=213&type=chunk) [Other Information](index=50&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, no directors or officers adopted or terminated any Rule 10b5-1 trading plans for the purchase or sale of the company's securities - No directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[215](index=215&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the principal executive officer and principal financial officer as required by the Sarbanes-Oxley Act, and Inline XBRL documents

[Crawford & Company Q2 2025 Earnings Release](index=1&type=section&id=Crawford%20%26%20Company%20Q2%202025%20Earnings%20Release) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported a 3% revenue increase to $323.0 million but a 9% decline in GAAP net income to $7.8 million Q2 & H1 2025 Consolidated Financial Results (GAAP) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $323.0M | $314.2M | 3% | $635.0M | $615.9M | 3% | | Net Income | $7.8M | $8.6M | (9)% | $14.5M | $11.4M | 27% | | Diluted EPS (CRD-A & CRD-B) | $0.16 | $0.17 | (6)% | $0.29 | $0.23 | 26% | Q2 & H1 2025 Consolidated Financial Results (Non-GAAP) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Consolidated Adjusted Operating Earnings | $22.0M | $22.1M | (0)% | $39.8M | $34.1M | 17% | | Consolidated Adjusted EBITDA | $31.4M | $30.6M | 3% | $58.3M | $51.2M | 14% | | Non-GAAP Net Income | $11.2M | $12.4M | (10)% | $21.5M | $18.9M | 14% | | Non-GAAP Diluted EPS (CRD-A & CRD-B) | $0.22 | $0.25 | (12)% | $0.43 | $0.38 | 13% | - The company increased its quarterly dividend to **$0.075 per share**, reflecting confidence in its margin trajectory[1](index=1&type=chunk)[3](index=3&type=chunk) - Management noted that consolidated revenue growth was driven by three of the four operating segments, though lower claims frequency in U.S. property created some revenue pressure on North America Loss Adjusting and Platform Solutions[3](index=3&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) Three of four segments grew revenue, with International Operations showing strong margin expansion while Platform Solutions improved profitability despite lower sales [North America Loss Adjusting](index=3&type=section&id=North%20America%20Loss%20Adjusting) The segment's revenue grew 2.7% to $78.1 million, but operating margin declined slightly due to higher administrative costs North America Loss Adjusting Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $78.1M | $76.0M | 2.7% | $157.8M | $153.4M | 2.9% | | Operating Earnings | $4.6M | $4.9M | (6.1)% | $10.1M | $9.4M | 7.4% | | Operating Margin | 5.9% | 6.4% | -50 bps | 6.4% | 6.1% | +30 bps | - Revenue growth was primarily driven by **U.S. Global Technical Services**[4](index=4&type=chunk) - The Q2 operating margin decline was attributed to decreased revenue in U.S. Field Operations and an **increase in administrative costs**[5](index=5&type=chunk) [International Operations](index=3&type=section&id=International%20Operations) This segment delivered strong results with a 6.6% revenue increase and a significant operating margin expansion to 7.0% International Operations Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $109.1M | $102.3M | 6.6% | $213.5M | $200.4M | 6.5% | | Operating Earnings | $7.6M | $5.7M | 33.3% | $11.1M | $7.4M | 50.0% | | Operating Margin | 7.0% | 5.6% | +140 bps | 5.2% | 3.7% | +150 bps | - Revenue growth was driven by operations in the **U.K., Europe, and Asia**[8](index=8&type=chunk) [Broadspire](index=3&type=section&id=Broadspire) Broadspire achieved record quarterly revenue of $100.6 million, though its operating margin contracted due to higher costs Broadspire Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $100.6M | $97.1M | 3.6% | $197.0M | $191.4M | 2.9% | | Operating Earnings | $13.7M | $15.1M | (9.3)% | $25.9M | $27.9M | (7.2)% | | Operating Margin | 13.6% | 15.5% | -190 bps | 13.1% | 14.6% | -150 bps | - Q2 2025 revenues were a **new quarterly record**, driven by increases in medical case management and casualty claims revenues[12](index=12&type=chunk) - The operating margin was negatively impacted by an **increase in administrative costs**[13](index=13&type=chunk) [Platform Solutions](index=5&type=section&id=Platform%20Solutions) Despite a 9.2% revenue decline, the segment's operating margin more than doubled to 8.9% by exiting low-value services Platform Solutions Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $35.2M | $38.8M | (9.2)% | $66.8M | $70.7M | (5.6)% | | Operating Earnings | $3.1M | $1.5M | 113.2% | $6.1M | $2.6M | 134.5% | | Operating Margin | 8.9% | 3.8% | +510 bps | 9.1% | 3.7% | +540 bps | - The significant improvement in operating earnings and margin was due to a **reduction in low-value inspection services** and a decrease in administrative costs[16](index=16&type=chunk)[18](index=18&type=chunk) [Corporate Costs, Balance Sheet, and Cash Flow](index=5&type=section&id=Corporate%20Costs%2C%20Balance%20Sheet%2C%20and%20Cash%20Flow) Corporate costs rose due to a one-time tax expense, while the balance sheet showed a slight increase in cash and debt - Unallocated corporate costs in Q2 2025 increased mainly due to a **one-time $3.1 million indirect tax expense** and higher self-insurance reserves[19](index=19&type=chunk) - Selling, General, and Administrative (SG&A) expenses rose by 8.4% in Q2 2025, also primarily driven by the **one-time $3.1 million indirect tax expense**[21](index=21&type=chunk) Balance Sheet and Cash Flow Summary | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $58.5M | $55.4M | | Total Debt | $225.4M | $218.1M | | **Metric (H1)** | **2025** | **2024** | | Net Cash from Operations | $21.1M | ($8.3M) | - The company **did not repurchase any shares** of CRD-A or CRD-B during the first six months of 2025[27](index=27&type=chunk) [Non-GAAP Reconciliations](index=6&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations for non-GAAP measures like operating earnings and adjusted EBITDA to their nearest GAAP equivalents - **Operating earnings** is the primary measure used by management to evaluate the financial performance of the company and its operating segments[30](index=30&type=chunk) Reconciliation of Consolidated Operating Earnings to Net Income (H1 2025) | (in thousands) | H1 2025 | | :--- | :--- | | Consolidated operating earnings | $39,840 | | Net corporate interest expense | ($7,802) | | Amortization of intangible assets | ($3,625) | | Non-service pension costs | ($4,687) | | Income tax provision | ($8,325) | | Other adjustments | ($875) | | **Net income attributable to shareholders** | **$14,466** | Reconciliation of Net Income to Adjusted EBITDA (H1 2025) | (in thousands) | H1 2025 | | :--- | :--- | | Net income attributable to shareholders | $14,466 | | Depreciation and amortization | $19,461 | | Stock-based compensation | $3,085 | | Net corporate interest expense | $7,802 | | Non-service pension costs | $4,687 | | Income tax provision | $8,325 | | Contingent earnout adjustments | $443 | | **Non-GAAP adjusted EBITDA** | **$58,269** | Reconciliation of GAAP to Non-GAAP EPS (Q2 2025) | (per share) | Q2 2025 | | :--- | :--- | | GAAP Diluted EPS | $0.16 | | Amortization of intangible assets | $0.03 | | Non-service related pension costs | $0.04 | | Contingent earnout adjustments | $0.00 | | **Non-GAAP Adjusted Diluted EPS** | **$0.22** | [Condensed Consolidated Financial Statements](index=13&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's unaudited condensed consolidated statements of operations, balance sheets, and cash flows - The Condensed Consolidated Statements of Operations show revenues, costs, and net income for the three and six months ended June 30, 2025 and 2024[44](index=44&type=chunk)[46](index=46&type=chunk) - The Condensed Consolidated Balance Sheets present the company's assets, liabilities, and shareholders' investment as of June 30, 2025, compared to December 31, 2024[48](index=48&type=chunk) - The Condensed Consolidated Statements of Cash Flows detail the cash provided by or used in operating, investing, and financing activities for the six months ended June 30, 2025 and 2024[55](index=55&type=chunk)

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Crawford & Company's unaudited condensed consolidated financial statements for Q1 2025, including operations, balance sheets, cash flows, and notes [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income significantly increased in Q1 2025 due to higher revenues and reduced expenses, with total revenues growing 3.3% Q1 2025 vs Q1 2024 Statement of Operations Highlights | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $323,339 | $313,073 | +3.3% | | **Income Before Income Taxes** | $9,220 | $3,826 | +141.0% | | **Net Income** | $6,740 | $2,779 | +142.5% | | **Net Income Attributable to Shareholders** | $6,684 | $2,837 | +135.6% | | **Diluted EPS (Class A)** | $0.13 | $0.06 | +116.7% | | **Diluted EPS (Class B)** | $0.13 | $0.06 | +116.7% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities slightly decreased as of March 31, 2025, while shareholders' investment saw a modest increase Balance Sheet Summary | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $372,837 | $374,227 | | **Total Assets** | $792,259 | $803,755 | | **Total Current Liabilities** | $286,201 | $299,727 | | **Long-term debt and finance leases** | $205,274 | $200,315 | | **Total Liabilities** | $633,236 | $648,204 | | **Total Shareholders' Investment** | $159,023 | $155,551 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash used in operating activities decreased in Q1 2025, while financing activities provided more cash due to increased borrowings Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(13,923) | $(19,803) | | **Net cash used in investing activities** | $(9,113) | $(9,550) | | **Net cash provided by financing activities** | $25,017 | $16,073 | | **Increase (Decrease) in Cash** | $1,692 | $(12,886) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover segment reporting, revenue recognition, income taxes, and a subsequent event regarding potential foreign tax impact - The company has four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[26](index=26&type=chunk) - As of March 31, 2025, the company had **$101.4 million** of remaining performance obligations, with approximately **71%** expected to be recognized as revenue within one year[48](index=48&type=chunk) - A subsequent event was noted where a foreign tax authority issued new guidance that could have an approximately **$5.0 million** negative impact on the company's financial condition and results in the second quarter of 2025[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2025 financial performance, highlighting revenue growth across segments, operating earnings, liquidity, and capital resources Consolidated Revenues Before Reimbursements (Three Months Ended March 31) | Metric (in thousands) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenues before reimbursements** | $312,032 | $301,654 | 3.4% | | **Constant Currency Revenues** | $316,451 | $301,654 | 4.9% | - The increase in consolidated revenues was driven by growth in the North America Loss Adjusting, International Operations, and Broadspire segments, partially offset by a slight decrease in Platform Solutions[94](index=94&type=chunk)[95](index=95&type=chunk) - Total cases received decreased by **5.6%** year-over-year, primarily due to a transfer of low-value inspection services from Platform Solutions to North America Loss Adjusting and lower high-frequency cases in International Operations[96](index=96&type=chunk)[97](index=97&type=chunk) [North America Loss Adjusting Segment](index=32&type=section&id=North%20America%20Loss%20Adjusting%20Segment) Operating earnings and margin improved due to revenue growth from new clients and efficiency gains in U.S. operations North America Loss Adjusting Performance (Q1) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Revenues** | $79,740 | $77,365 | | **Operating Earnings** | $5,476 | $4,479 | | **Operating Margin** | 6.9% | 5.8% | - Revenue growth was led by U.S. Global Technical Services due to new client additions and expansion with existing accounts[117](index=117&type=chunk) [International Operations Segment](index=34&type=section&id=International%20Operations%20Segment) Operating earnings more than doubled with expanded margins, driven by revenue growth in the U.K. and Asia International Operations Performance (Q1) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Revenues** | $104,394 | $98,092 | | **Operating Earnings** | $3,456 | $1,690 | | **Operating Margin** | 3.3% | 1.7% | - Revenue growth was driven by higher-value third-party administration revenues in the U.K. and increased claims activity in Europe and Asia[125](index=125&type=chunk)[126](index=126&type=chunk) [Broadspire Segment](index=38&type=section&id=Broadspire%20Segment) Revenues increased due to new clients and pricing, but operating earnings slightly decreased due to higher indirect support costs Broadspire Performance (Q1) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Revenues** | $96,384 | $94,298 | | **Operating Earnings** | $12,203 | $12,804 | | **Operating Margin** | 12.7% | 13.6% | - The decrease in operating earnings was attributed to an increase in centralized indirect support costs, which offset the revenue growth[132](index=132&type=chunk) [Platform Solutions Segment](index=39&type=section&id=Platform%20Solutions%20Segment) Profitability significantly improved despite a revenue decline, driven by cost reductions and a shift to higher-margin services Platform Solutions Performance (Q1) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Revenues** | $31,514 | $31,899 | | **Operating Earnings** | $2,927 | $1,115 | | **Operating Margin** | 9.3% | 3.5% | - Profitability improved due to a shift in business mix towards higher-margin staff augmentation services and away from low-value inspection services, which were transferred to another segment[141](index=141&type=chunk)[142](index=142&type=chunk) [Liquidity, Capital Resources, and Financial Condition](index=42&type=section&id=Liquidity,%20Capital%20Resources,%20and%20Financial%20Condition) Working capital and total liquidity increased, with less cash used in operations and higher net borrowings for operational needs - Working capital increased by **$12.1 million** from year-end 2024 to **$86.6 million** at March 31, 2025[159](index=159&type=chunk) - Total liquidity, defined as cash on hand plus borrowing capacity, was **$255.9 million** at the end of the quarter[166](index=166&type=chunk) - Cash used in operating activities was **$13.9 million**, an improvement from the **$19.8 million** used in the same period of 2024, primarily due to higher earnings and working capital changes[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposures since the prior fiscal year-end - There have been no material changes in the company's market risk exposures since the end of the last fiscal year[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[181](index=181&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[182](index=182&type=chunk) Part II. Other Information [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive risk factors in the 2024 Form 10-K, indicating no new material risks - The company directs stakeholders to its 2024 Form 10-K for a comprehensive discussion of risk factors, implying no significant new risks have emerged during the quarter[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details on the share repurchase program are provided, with no shares repurchased during Q1 2025 and remaining authorization - The company did not repurchase any of its Class A or Class B common stock during the three months ended March 31, 2025[185](index=185&type=chunk) - As of March 31, 2025, the company had authorization to repurchase an additional **1,089,809 shares** under its existing plan, which extends through December 31, 2025[184](index=184&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter ended March 31, 2025[186](index=186&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists standard exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files - The report includes standard exhibits such as CEO/CFO certifications and XBRL data files[187](index=187&type=chunk)

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Crawford & Company demonstrated robust financial performance in Q1 2025, marked by significant revenue and earnings growth across both GAAP and non-GAAP measures [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Crawford & Company reported strong Q1 2025 financial results, with revenues before reimbursements increasing 3% to $312.0 million and net income surging 139% to $6.7 million | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **GAAP Results (Millions USD)** | | | | | Revenues before reimbursements | $312.0 | $301.7 | 3% | | Net income attributable to shareholders | $6.7 | $2.8 | 139% | | Diluted EPS (CRD-A & CRD-B) (USD) | $0.13 | $0.06 | 117% | | **Non-GAAP Results (Millions USD)** | | | | | Revenues (constant dollar) | $316.5 | $301.7 | 5% | | Consolidated adjusted operating earnings | $17.8 | $12.1 | 47% | | Consolidated adjusted EBITDA | $26.8 | $20.6 | 30% | | Non-GAAP diluted EPS (CRD-A & CRD-B) (USD) | $0.21 | $0.13 | 62% | [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Rohit Verma highlighted strong Q1 2025 momentum, attributing significant revenue and operating earnings growth to the company's diversified model and disciplined execution - The CEO emphasized continued growth and profitability momentum, with a **3.4% revenue increase** and a **47% rise in consolidated operating earnings**[3](index=3&type=chunk) - Margin improvement was driven by the company's diversified model and disciplined execution across three of its business segments[3](index=3&type=chunk) - Future strategy involves investing in the business, enhancing liquidity, and strengthening the balance sheet[4](index=4&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) This section provides a detailed analysis of the financial performance across Crawford & Company's four key business segments, highlighting revenue and operating margin trends [North America Loss Adjusting](index=2&type=section&id=North%20America%20Loss%20Adjusting) The North America Loss Adjusting segment reported a 3.1% revenue increase to $79.7 million, with operating earnings growing to $5.5 million and margin improving to 6.9% | Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | Change | | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $79.7 | $77.4 | 3.1% | | Operating Earnings | $5.5 | $4.5 | 22.3% | | Operating Margin (%) | 6.9 | 5.8 | +1.1 p.p. | - Revenue growth was primarily driven by strength in U.S. Global Technical Services[5](index=5&type=chunk) [International Operations](index=2&type=section&id=International%20Operations) International Operations achieved strong results with a 6.4% revenue increase to $104.4 million, and operating earnings more than doubled to $3.5 million, expanding the margin to 3.3% | Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | Change | | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $104.4 | $98.1 | 6.4% | | Operating Earnings | $3.5 | $1.7 | 105% | | Operating Margin (%) | 3.3 | 1.7 | +1.6 p.p. | - Growth was driven by operations in the U.K. and Europe[7](index=7&type=chunk) [Broadspire](index=2&type=section&id=Broadspire) The Broadspire segment saw a 2.2% revenue increase to $96.4 million, though operating earnings slightly decreased to $12.2 million, leading to a margin contraction to 12.7% | Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | Change | | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $96.4 | $94.3 | 2.2% | | Operating Earnings | $12.2 | $12.8 | (4.7)% | | Operating Margin (%) | 12.7 | 13.6 | (0.9) p.p. | - The operating margin was negatively impacted by an increase in centralized indirect support costs[10](index=10&type=chunk) [Platform Solutions](index=2&type=section&id=Platform%20Solutions) Platform Solutions experienced a slight revenue decrease to $31.5 million, yet profitability dramatically improved with operating earnings rising to $2.9 million and margin expanding to 9.3% | Metric | Q1 2025 (Millions USD) | Q1 2024 (Millions USD) | Change | | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $31.5 | $31.9 | (1.2)% | | Operating Earnings | $2.9 | $1.1 | 162.5% | | Operating Margin (%) | 9.3 | 3.5 | +5.8 p.p. | - Profitability improvement was driven by higher staff augmentation revenues, cost reductions in Networks, and increased rates in Contractor Connection[12](index=12&type=chunk) [Corporate and Other Financial Items](index=2&type=section&id=Corporate%20and%20Other%20Financial%20Items) This section covers unallocated corporate costs, SG&A expenses, and other financial matters, including a significant subsequent event related to foreign tax guidance [Unallocated Corporate Costs and SG&A](index=2&type=section&id=Unallocated%20Corporate%20Costs%20and%20SG%26A) Unallocated corporate costs decreased to $6.2 million in Q1 2025, while total Selling, General, and Administrative (SG&A) expenses also fell by $2.7 million - Unallocated corporate costs decreased to **$6.2 million** in Q1 2025 from **$8.0 million** in Q1 2024[13](index=13&type=chunk) - Selling, general, and administrative expenses (SG&A) decreased by **$2.7 million**, or **3.5%**, year-over-year[14](index=14&type=chunk) [Other Matters and Subsequent Event](index=3&type=section&id=Other%20Matters%20and%20Subsequent%20Event) The company recognized a $0.4 million pretax contingent earnout expense and $2.3 million in non-service pension costs, with a subsequent foreign tax guidance potentially impacting future financial results by $5.0 million - Recognized a pretax contingent earnout expense of **$0.4 million** and non-service pension costs of **$2.3 million** in Q1 2025[15](index=15&type=chunk)[16](index=16&type=chunk) - A subsequent event involving new foreign tax guidance could result in an estimated negative financial impact of approximately **$5.0 million**[17](index=17&type=chunk) [Financial Position and Cash Flow](index=3&type=section&id=Financial%20Position%20and%20Cash%20Flow) This section provides an analysis of Crawford & Company's financial position, detailing balance sheet items, cash flow activities, and capital allocation decisions [Balance Sheet Analysis](index=3&type=section&id=Balance%20Sheet%20Analysis) As of March 31, 2025, Crawford & Company reported cash and cash equivalents of $57.4 million and total debt outstanding of $246.6 million | Balance Sheet Item | March 31, 2025 (Millions USD) | December 31, 2024 (Millions USD) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $57.4 | $55.4 | | Total Debt Outstanding | $246.6 | $218.1 | [Cash Flow and Capital Allocation](index=3&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) The company's operations used $13.9 million in cash during Q1 2025, an improvement from the prior year, with no share repurchases and $0.8 million contributed to U.K. pension plans - Cash used in operations improved to **$13.9 million** in Q1 2025, compared to **$19.8 million** used in Q1 2024[19](index=19&type=chunk) - The company made no share repurchases of CRD-A or CRD-B stock during the first three months of 2025[20](index=20&type=chunk) - Contributions to U.K. pension plans totaled **$0.8 million** for the first three months of 2025[19](index=19&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company employs non-GAAP measures like 'Operating earnings' and 'Adjusted EBITDA' to provide clearer insights into core operational performance and facilitate segment evaluation - Operating earnings is the primary financial performance measure used by senior management to evaluate segment performance and make resource allocation decisions[23](index=23&type=chunk) - Adjusted EBITDA is used by management to evaluate, assess, and benchmark operational results and is defined as net income adjusted for items like depreciation, amortization, interest, taxes, and stock-based compensation[24](index=24&type=chunk) - Expenses such as income taxes, net corporate interest, stock option expense, amortization, and non-service pension costs are excluded from segment operating earnings to better assess the results of each segment's operating activities[26](index=26&type=chunk) [GAAP to Non-GAAP Reconciliations](index=6&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) Detailed reconciliations are provided, adjusting GAAP net income of $6.7 million for Q1 2025 to a non-GAAP adjusted net income of $10.3 million, alongside similar adjustments for operating earnings and adjusted EBITDA | Metric (Thousands USD) | Pretax earnings | Net income | Diluted EPS (CRD-A & B) (USD) | | :--- | :--- | :--- | :--- | | **Q1 2025 GAAP** | **$9,220** | **$6,684** | **$0.13** | | Amortization of intangible assets | $1,800 | $1,489 | $0.03 | | Non-service related pension costs | $2,333 | $1,803 | $0.04 | | Contingent earnout adjustments | $363 | $363 | $0.01 | | **Q1 2025 Non-GAAP Adjusted** | **$13,716** | **$10,339** | **$0.21** | - Consolidated operating earnings of **$17.8 million** for Q1 2025 are reconciled to GAAP net income of **$6.7 million**[28](index=28&type=chunk) - GAAP net income of **$6.7 million** is reconciled to Non-GAAP adjusted EBITDA of **$26.8 million** for Q1 2025[28](index=28&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) This section presents Crawford & Company's condensed consolidated statements, including operations, balance sheets, and cash flows for the reported periods [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, total revenues increased by 3% to $323.3 million, contributing to a 141% rise in income before income taxes to $9.2 million and a 136% increase in net income to $6.7 million | Metric (Thousands USD) | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues Before Reimbursements | $312,032 | $301,654 | 3% | | Total Revenues | $323,339 | $313,073 | 3% | | Income Before Income Taxes | $9,220 | $3,826 | 141% | | Net Income Attributable to Shareholders | $6,684 | $2,837 | 136% | | Diluted EPS (Class A & B) (USD) | $0.13 | $0.06 | 117% | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $792.3 million, with total liabilities at $633.2 million, and total shareholders' investment increasing to $159.0 million | Metric (Thousands USD) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $57,367 | $55,412 | | Total Current Assets | $372,837 | $374,227 | | Total Assets | $792,259 | $803,755 | | Total Current Liabilities | $286,201 | $299,727 | | Long-Term Debt and Finance Leases | $205,274 | $200,315 | | Total Shareholders' Investment | $159,023 | $155,551 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash used in operating activities was $13.9 million, with net cash provided by financing activities at $25.0 million, resulting in a net cash increase of $1.7 million | Metric (Thousands USD) | Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash used in operating activities | $(13,923) | | Net cash used in investing activities | $(9,113) | | Net cash provided by financing activities | $25,017 | | Increase in cash, cash equivalents | $1,692 |

Part I [Business](index=4&type=section&id=Item%201.%20Business) Crawford & Company, the world's largest independent claims management provider, generated **$1.293 billion** in **2024** revenue across four segments - **Crawford & Company is the world's largest publicly listed independent provider of claims management and outsourcing solutions**, operating in over **70** countries[15](index=15&type=chunk) 2024 Revenue Contribution by Segment | Segment | 2024 Revenue Contribution | Key Services | | :--- | :--- | :--- | | North America Loss Adjusting | 24.2% | Claims management for property and casualty losses in the U.S. and Canada. | | International Operations | 32.4% | Claims management for property and casualty markets in the U.K., Europe, Australia, Asia, and Latin America. | | Broadspire | 30.0% | Third-party administration for workers' compensation, auto, liability, and disability claims in the U.S. | | Platform Solutions | 13.4% | Services including Contractor Connection, Networks (Catastrophe operations), and Subrogation in the U.S. | - As of December **31**, **2024**, the company had approximately **10,040** employees. Women comprised **57%** of the global workforce and **27%** of the global senior management team[34](index=34&type=chunk) - The company emphasizes employee development, tracking approximately **50,500** training hours globally in **2024** through its proprietary learning platform, KMC OnDemand™[39](index=39&type=chunk) - While no single customer accounts for **10%** or more of consolidated revenues, the Platform Solutions segment had three customers each representing over **10%** of its revenue, and the International Operations segment had one such customer in **2023** and **2022**[24](index=24&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from unpredictable claim volumes, data security threats, international operations, an underfunded pension plan, and intense market competition - A significant portion of revenues depends on claim volumes, which are difficult to forecast due to factors like weather severity, insurance outsourcing trends, and economic conditions[47](index=47&type=chunk) - The company manages a large amount of sensitive consumer data, and a security breach could result in material loss of business, legal liability, and reputational harm[52](index=52&type=chunk)[53](index=53&type=chunk) - The U.S. qualified defined benefit pension plan is underfunded by **$19.0 million**. Future funding requirements could restrict cash available for operations and investment[74](index=74&type=chunk) - The company's credit facility contains financial covenants, including a maximum leverage ratio and a minimum interest coverage ratio. Non-compliance could lead to the acceleration of outstanding debt[76](index=76&type=chunk)[77](index=77&type=chunk) - The global claims management market is highly competitive. The company competes with numerous firms on price, quality, and scope of services, and faces pressure from clients handling claims in-house[81](index=81&type=chunk)[82](index=82&type=chunk) - A principal shareholder, Jesse C. Crawford, beneficially owns approximately **68%** of the voting Class B Common Stock, giving him control over matters submitted to shareholders, including the election of directors[80](index=80&type=chunk) [Unresolved Staff Comments](index=19&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - **None**[90](index=90&type=chunk) [Cybersecurity](index=20&type=section&id=Item%201C.%20Cybersecurity) The company's global cybersecurity program, aligned with NIST and overseen by the Board, has prevented material incidents in the last three years - **The company's cybersecurity program is aligned with the NIST Cybersecurity Framework** and is integrated into its global Enterprise Risk Management (ERM) program[91](index=91&type=chunk)[92](index=92&type=chunk) - Cybersecurity governance involves a CISO, a Cybersecurity and Privacy Council comprising senior management, and primary oversight from the Audit Committee of the Board of Directors[98](index=98&type=chunk)[99](index=99&type=chunk) - The company has not experienced any material cybersecurity incidents in the last three fiscal years, and related expenses have been immaterial[97](index=97&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) As of December **31**, **2024**, the company leased **202** office locations, which management deems sufficient for operations - The company leased **202** office locations as of December **31**, **2024**, and believes these facilities are sufficient for its operational needs[104](index=104&type=chunk) [Legal Proceedings](index=22&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine lawsuits related to claims administration, mostly covered by insurance, with adequate provisions made - The company is periodically named as a defendant in lawsuits related to its claims administration services. Most of these claims are covered by insurance, and adequate provisions for known risks have been made[105](index=105&type=chunk) [Mine Safety Disclosures](index=22&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[107](index=107&type=chunk) Part II [Market for Common Equity, Shareholder Matters, and Issuer Purchases](index=23&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity,%20Related%20Shareholder%20Matters,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A and B common stocks trade on the NYSE, supported by a share repurchase program and benchmarked against market indices - The company's two classes of common stock, CRD-A and CRD-B, trade on the New York Stock Exchange (NYSE)[110](index=110&type=chunk) - A share repurchase program is authorized through December **31**, **2025**, with **1,089,809** shares remaining for repurchase at year-end **2024**[112](index=112&type=chunk) Total Return to Shareholders (Indexed Returns, Base Period 2019 = 100) | Company / Index | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Crawford & Company (Class A) | 100.00 | 66.09 | 68.73 | 52.72 | 128.83 | 116.02 | | Crawford & Company (Class B) | 100.00 | 72.62 | 77.57 | 56.97 | 145.08 | 132.58 | | Russell 2000 Index | 100.00 | 119.96 | 137.74 | 109.58 | 128.14 | 142.92 | | S&P Property-Casualty Insurance Index | 100.00 | 106.33 | 124.95 | 148.53 | 164.49 | 219.73 | [RESERVED]](index=25&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial performance, noting **2024** revenue growth to **$1.293 billion** but a net income decline, and discusses liquidity, capital, and critical accounting policies [Results of Operations](index=27&type=section&id=Results%20of%20Operations) In **2024**, consolidated revenues grew **2.0%** to **$1.293 billion**, while net income decreased, with varied segment performance and no goodwill impairment Consolidated Financial Highlights (2024 vs. 2023) | Metric | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $1.293 billion | $1.267 billion | 2.0% | | Net Income Attributable to Company | $26.6 million | $30.6 million | (13.1)% | Segment Revenue Performance (2024 vs. 2023) | Segment | 2024 Revenues (in thousands) | 2023 Revenues (in thousands) | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $312,158 | $303,629 | 2.8% | | International Operations | $418,607 | $382,393 | 9.5% | | Broadspire | $388,074 | $355,650 | 9.1% | | Platform Solutions | $173,671 | $225,459 | (23.0)% | Segment Operating Earnings (2024 vs. 2023) | Segment | 2024 Operating Earnings (in thousands) | 2023 Operating Earnings (in thousands) | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $18,173 | $23,185 | (21.6)% | | International Operations | $21,001 | $11,181 | 87.8% | | Broadspire | $52,429 | $41,873 | 25.2% | | Platform Solutions | $11,173 | $28,541 | (60.9)% | - In **2022**, the company recognized a pretax non-cash goodwill impairment of **$36.8 million** related to the North America Loss Adjusting, International Operations, and Platform Solutions segments. No goodwill impairment was recorded in **2024** or **2023**[138](index=138&type=chunk) [Liquidity, Capital Resources, and Financial Condition](index=58&type=section&id=Liquidity,%20Capital%20Resources,%20and%20Financial%20Condition) The company maintains liquidity through operations and a **$450 million** credit facility, remains compliant with debt covenants, but manages an underfunded U.S. pension plan - The company's primary sources of liquidity are cash from operations and a **$450 million** revolving credit facility that matures in November **2026**[257](index=257&type=chunk)[259](index=259&type=chunk) Key Financial Covenants and Ratios (as of Dec 31, 2024) | Covenant/Ratio | Requirement | Actual Value | | :--- | :--- | :--- | | Consolidated Leverage Ratio | Not greater than 4.50 to 1.00 | 1.85 | | Consolidated Interest Coverage Ratio | Not less than 2.50 to 1.00 | 5.50 | - The frozen U.S. Qualified Pension Plan was underfunded by **$19.0 million** as of December **31**, **2024**. The company does not expect to make discretionary contributions to this plan in **2025**[290](index=290&type=chunk) Cash Flow Summary (in millions) | Cash Flow Activity | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $51.6 | $103.8 | $27.6 | | Net cash used in investing activities | $(41.6) | $(36.6) | $(57.9) | | Net cash (used in) provided by financing activities | $(12.9) | $(54.7) | $25.9 | [Critical Accounting Policies and Estimates](index=64&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section details critical accounting policies and estimates, including revenue recognition, credit losses, goodwill impairment, pension plans, income taxes, and self-insured risks - For lifetime claim handling arrangements, deferred revenues were approximately **$39.6 million** as of December **31**, **2024**. A **1.0%** change in the claim closing rate would impact annual revenues by approximately **$0.5 million**[302](index=302&type=chunk) - The allowance for expected credit losses was **$8.1 million** at year-end **2024**. A **1.0%** change in this allowance relative to gross billed receivables would have impacted **2024** pretax income by approximately **$1.5 million**[304](index=304&type=chunk) - Goodwill impairment testing is performed annually using a combination of income and market approaches. Key assumptions for the **2024** test included discount rates of **13.0%** - **17.0%** and a terminal growth rate of **2.0%**[306](index=306&type=chunk)[309](index=309&type=chunk) - Accounting for defined benefit pension plans is sensitive to assumptions. A **0.50%** change in the expected return on plan assets would have impacted **2024** pretax income by approximately **$2.1 million**, while a **0.25%** change in the discount rate would have impacted the projected benefit obligation by approximately **$8.7 million**[322](index=322&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=74&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from foreign currency fluctuations and interest rates, with hypothetical changes impacting pretax income and interest expense - A hypothetical **10.0%** change in foreign currency exchange rates would have impacted **2024** consolidated pretax income by approximately **$1.9 million**[342](index=342&type=chunk) - A hypothetical **1.0%** change in market interest rates would have changed pretax interest expense on floating-rate debt by **$2.2 million** in **2024**[343](index=343&type=chunk) - A **0.25%** change in the discount rate for the U.S. and U.K. defined benefit pension plans would have changed the projected benefit obligations by approximately **$8.7 million** at December **31**, **2024**[344](index=344&type=chunk) [Financial Statements and Supplementary Data](index=76&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements, including notes and the independent auditor's unqualified opinion for **2024** Consolidated Statements of Operations Highlights (in thousands) | Line Item | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Total Revenues | $1,340,970 | $1,316,919 | $1,231,226 | | Income Before Income Taxes | $41,112 | $47,357 | $5,046 | | Net Income (Loss) Attributable to Shareholders | $26,596 | $30,609 | $(18,305) | | Diluted EPS (Class A) | $0.53 | $0.61 | $(0.37) | Consolidated Balance Sheets Highlights (in thousands) | Line Item | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $374,227 | $369,346 | | Goodwill | $76,368 | $76,724 | | Total Assets | $803,755 | $799,199 | | Total Current Liabilities | $299,727 | $299,292 | | Long-term debt and finance leases | $200,315 | $194,335 | | Total Shareholders' Investment | $155,551 | $139,831 | [Changes in and Disagreements with Accountants](index=135&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company - **Not applicable**[561](index=561&type=chunk) [Controls and Procedures](index=135&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December **31**, **2024** - **The CEO and CFO concluded that the company's disclosure controls and procedures were effective** as of December **31**, **2024**[564](index=564&type=chunk) - **Management determined that the company's internal control over financial reporting was effective** as of December **31**, **2024**, based on the COSO framework[567](index=567&type=chunk) [Other Information](index=136&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted or terminated Rule **10b5-1** trading arrangements during the fourth quarter of **2024** - No directors or officers adopted or terminated any Rule **10b5-1** trading plans during the fourth quarter of **2024**[570](index=570&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=136&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - **Not applicable**[571](index=571&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=138&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the **2025** Proxy Statement - Required information is incorporated by reference from the Registrant's **2025** Proxy Statement[582](index=582&type=chunk) [Executive Compensation](index=138&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the **2025** Proxy Statement - Required information is incorporated by reference from the Registrant's **2025** Proxy Statement[584](index=584&type=chunk) [Security Ownership and Related Shareholder Matters](index=138&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the **2025** Proxy Statement - Required information is incorporated by reference from the Registrant's **2025** Proxy Statement[585](index=585&type=chunk) [Certain Relationships, Related Transactions, and Director Independence](index=138&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the **2025** Proxy Statement - Required information is incorporated by reference from the Registrant's **2025** Proxy Statement[586](index=586&type=chunk) [Principal Accountant Fees and Services](index=138&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the **2025** Proxy Statement - Required information is incorporated by reference from the Registrant's **2025** Proxy Statement[587](index=587&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=139&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the report, including certifications - This item lists all financial statements, schedules, and exhibits filed with the report, including certifications by the CEO and CFO[590](index=590&type=chunk)[591](index=591&type=chunk) [Form 10-K Summary](index=140&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form **10-K** summary - **None**[593](index=593&type=chunk)

Revenue Performance - Revenues before reimbursements increased 17% to $347.3 million in Q4 2024 from $296.1 million in Q4 2023[2] - Full year revenues before reimbursements reached a record $1.293 billion in 2024, up 2% from $1.267 billion in 2023[3] - Total revenues for Q4 2024 reached $347,254, up 17.3% from $296,121 in Q4 2023[32] - Total revenues for the three months ended December 31, 2024, increased by 16% to $358,318,000 compared to $309,165,000 in the same period of 2023[41] - Total revenues for the year ended December 31, 2024, were $1,340,970,000, a 2% increase from $1,316,919,000 in 2023[43] Net Income and Earnings - Fourth quarter net income was $5.7 million, a significant recovery from a loss of $(0.8) million in the prior year quarter[2] - Net income attributable to shareholders for Q4 2024 was $5,722, a recovery from a loss of $818 in Q4 2023[33] - Net income for the three months ended December 31, 2024, was $5,861,000, a significant increase of 693% from a net loss of $989,000 in the same period of 2023[41] - Net income attributable to shareholders for the year ended December 31, 2024, was $26,596,000, down 13% from $30,609,000 in 2023[43] Earnings Per Share - The diluted earnings per share for Q4 2024 was $0.11, compared to a diluted loss per share of $0.02 in Q4 2023[34] - Basic earnings per share for Class A and Class B Common Stock were both $0.12 for the three months ended December 31, 2024, compared to a loss of $0.02 in the same period of 2023, representing a 700% increase[41] - Basic earnings per share for Class A and Class B Common Stock decreased by 14% to $0.54 for the year ended December 31, 2024, compared to $0.63 in 2023[43] Operating Performance - Consolidated operating earnings for Q4 2024 were $18,726, a significant increase from $7,750 in Q4 2023, representing a growth of 142.5%[33] - International operations generated $8,473 in operating earnings for Q4 2024, up from $2,207 in Q4 2023, reflecting a growth of 284.5%[33] - Operating earnings for North America reached $3,366 million, a significant increase of 347.6% from $752 million in 2023[48] - Operating earnings for international operations surged to $8,473 million, an increase of 283.9% from $2,207 million in 2023[48] Cash Flow and Debt - Cash provided by operations decreased to $51.6 million in 2024 from $103.8 million in 2023, primarily due to a decrease in accounts receivable[23] - Free cash flow for the year ended December 31, 2024, was $9,972, down 85.1% from $67,194 in 2023[33] - The company's total debt outstanding increased to $218.1 million as of December 31, 2024, compared to $209.1 million at the end of 2023[22] Assets and Liabilities - Cash and cash equivalents as of December 31, 2024, were $55,412,000, a decrease from $58,363,000 as of December 31, 2023[45] - Total assets increased to $803,755,000 as of December 31, 2024, compared to $799,199,000 as of December 31, 2023[45] - Total liabilities remained relatively stable at $648,204,000 as of December 31, 2024, compared to $659,368,000 as of December 31, 2023[45] Segment Performance - North America Loss Adjusting revenues before reimbursements were $79.4 million in Q4 2024, increasing 14% from $69.7 million in Q4 2023[6] - International Operations revenues before reimbursements were $112.5 million in Q4 2024, up 15.8% from $97.2 million in Q4 2023[9] - Broadspire segment revenues before reimbursements reached a new annual record of $388.1 million in 2024, increasing 9.1% from $355.7 million in 2023[13] - Platform Solutions revenues before reimbursements were $57.6 million in Q4 2024, up 55.1% from $37.2 million in Q4 2023[14] Expense Management - Direct compensation, fringe benefits, and non-employee labor costs in North America rose to $58,951 million, reflecting a 12.9% increase from $52,224 million in 2023[48] - Total operating expenses for North America were $76,068 million, a 10.4% increase compared to $68,932 million in 2023[48] - Total operating expenses for international operations increased to $104,018 million, up 9.6% from $94,945 million in 2023[48]

Financial Performance - Total revenues for the nine months ended September 30, 2024, were $982,652,000, a decrease of 2.1% from $1,007,754,000 in the same period of 2023[6] - Net income for the nine months ended September 30, 2024, was $20,874,000, down 33.5% from $31,427,000 in 2023[8] - Earnings per share (diluted) for Class A and Class B common stock were both $0.42 for the nine months ended September 30, 2024, compared to $0.63 and $0.64, respectively, in 2023[8] - Comprehensive income for the nine months ended September 30, 2024, was $27,833,000, down from $43,913,000 in 2023[12] - The company reported a net income of $8,584 million for the quarter, compared to $8,502 million in the previous quarter, indicating stable profitability[18] - Net income for the three months ended September 30, 2023, was $12,319,000, an increase from $10,681,000 in the previous quarter[19] - The Company recognized a net income attributable to common shareholders of $7.329 million for the three months ended September 30, 2024, compared to $4.990 million in the same period of 2023[43] Assets and Liabilities - Total current assets decreased to $362,368,000 as of September 30, 2024, from $369,346,000 at December 31, 2023[13] - Cash and cash equivalents were $52,340,000 as of September 30, 2024, down from $58,363,000 at December 31, 2023[13] - Total liabilities increased to $800,794,000 as of September 30, 2024, compared to $799,199,000 at December 31, 2023[14] - The company’s goodwill as of September 30, 2024, was $76,631,000, slightly down from $76,724,000 at December 31, 2023[13] - Total shareholders' investment increased to $139,831 million, up from $2,779 million, demonstrating growth in equity[18] - The balance at September 30, 2024, showed total assets of $160,927 million, reflecting the company's robust financial position[18] Cash Flow - Net cash provided by operating activities for the nine months ended September 30, 2024, was $11,093,000, significantly lower than $68,077,000 in the same period of 2023[15] - Net cash used in investing activities totaled $(29,445) million, compared to $(27,683) million in the previous period, indicating an increase in investment outflows[16] - Cash dividends paid increased to $(10,320) million from $(9,284) million, reflecting a rise in shareholder returns[16] - The company repurchased common stock amounting to $(3,604) million, significantly higher than $(582) million in the prior period, indicating a strong commitment to returning capital to shareholders[16] - Net cash provided by financing activities was $13,309 million, a turnaround from $(38,070) million in the previous period, highlighting improved cash flow management[16] - Cash, cash equivalents, and restricted cash at the end of the period stood at $54,683 million, up from $50,282 million, showing a positive liquidity position[16] Segment Performance - North America adjusted revenues before reimbursements for Q3 2024 were $79,329,000, a slight decrease of 0.8% from $79,987,000 in Q3 2023[25] - International Operations revenues before reimbursements for Q3 2024 totaled $105,741,000, up 7.3% from $98,066,000 in Q3 2023[27] - Broadspire segment revenues before reimbursements for Q3 2024 reached $99,009,000, an increase of 7.7% compared to $92,229,000 in Q3 2023[28] - Contractor Connection service line revenues for Q3 2024 were $17,051,000, down 10.3% from $19,013,000 in Q3 2023[30] - Networks service line revenues for Q3 2024 decreased significantly to $20,787,000 from $34,160,000 in Q3 2023, a decline of 39.0%[30] - Total revenues for the Platform Solutions segment before reimbursements in Q3 2024 were $45,296,000, down 24.3% from $59,839,000 in Q3 2023[30] - Claims Management service line revenues for Q3 2024 were $50,293,000, an increase of 4.8% from $47,919,000 in Q3 2023[28] - Medical Management service line revenues for Q3 2024 increased to $48,716,000 from $44,310,000 in Q3 2023, reflecting a growth of 10.8%[28] Shareholder Returns - Cash dividends paid for Class A and Class B shares were $3,430,000 for the three months ended September 30, 2023, maintaining a dividend of $0.06 per share[19] - The company reported a retained earnings balance of $234,718,000 as of September 30, 2023, reflecting an increase from $220,850,000 at the end of June 2023[19] - The company has remaining authorization to repurchase 1,113,875 shares under the 2021 Repurchase Authorization[46] - The company did not repurchase any shares of CRD-A during the nine months ended September 30, 2024[47] Tax and Pension - The provision for income taxes for the three months ended September 30, 2024, totaled $5.333 million, with an effective tax rate of 36.2%, up from 35.8% in the prior year[39] - The net periodic cost related to defined benefit pension plans for the three months ended September 30, 2024, was $2.873 million, compared to $2.556 million in the same period of 2023[40] - The Company made contributions of $1.904 million to the U.K. defined benefit pension plans for the nine months ended September 30, 2024, compared to $1.795 million in the same period of 2023[41] Company Operations - The company has four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[21] - The company operates in over 70 countries, providing claims management and outsourcing solutions to insurance companies and self-insured entities[20] - The company’s North America Loss Adjusting segment services the North American property and casualty market, including operations in the U.S. and Canada[53] - The company’s International Operations segment services the global property and casualty market outside North America, including operations in the U.K., Europe, Australia, Asia, and Latin America[53] Future Outlook - The Company expects continued growth in its international operations, with a focus on enhancing service lines and expanding market reach[27] - The company plans to adopt new segment reporting standards effective for fiscal years beginning after December 15, 2023[22] - The company is evaluating the impact of new income tax disclosure standards effective for fiscal years beginning after December 15, 2024[23] - As of September 30, 2024, the Company had $105.7 million in remaining performance obligations, with an expectation to recognize approximately 67% as revenue within one year[35] - The deferred revenue balance as of September 30, 2024, was $59.22 million, reflecting quarterly additions of $23.82 million and revenue recognized of $14.666 million from prior periods[34]

Financial Performance - Revenues before reimbursements for Q3 2024 were $329.4 million, a slight decrease from $330.1 million in Q3 2023[2] - Net income attributable to shareholders for Q3 2024 was $9.5 million, down from $12.3 million in the same period last year[2] - Diluted earnings per share (EPS) for Q3 2024 were $0.19, compared to $0.25 in Q3 2023[2] - Total revenues for Q3 2024 were $342.726 million, a slight increase of 0% compared to $342.187 million in Q3 2023[26] - Net income for Q3 2024 decreased by 23% to $9.387 million, down from $12.174 million in Q3 2023[26] - Earnings per share (EPS) for Class A and Class B common stock in Q3 2024 were both $0.19, a decrease of 24% from $0.25 in Q3 2023[26] - For the nine months ended September 30, 2024, total revenues were $982.652 million, a decrease of 2% from $1,007.754 million in the same period of 2023[27] - Net income for the nine months ended September 30, 2024, was $20.668 million, down 34% from $31.249 million in 2023[27] - Year-to-date net income for 2024 was $20,668, down from $31,249 in 2023[31] Segment Performance - International Operations revenues before reimbursements increased by 7.8% to $105.7 million in Q3 2024, driven by growth in the U.K. and Europe[4] - Broadspire segment achieved record revenues of $99.0 million in Q3 2024, up 7.4% from $92.2 million in Q3 2023[5] - North America Loss Adjusting revenues were $79.3 million in Q3 2024, relatively consistent with $80.0 million in Q3 2023[3] - Revenues before reimbursements for North America in Q3 2024 were $79,329, a decrease of 0.8% from $79,987 in Q3 2023[29] Operating Metrics - Consolidated adjusted EBITDA for Q3 2024 was $29.6 million, or 9.0% of revenues, down from $38.6 million, or 11.7% of revenues, in Q3 2023[2] - Consolidated operating earnings for the three months ended September 30, 2024, were $21,835, a decrease from $29,939 in the same period last year, representing a decline of approximately 27.1%[14] - Operating earnings for North America decreased by 48.0% to $5,443 in Q3 2024 from $10,468 in Q3 2023[29] - Operating earnings for the nine months ended September 30, 2024, were $14,807, down 34.0% from $22,433 in 2023[30] Cash Flow and Dividends - Free cash flow for the nine months ended September 30, 2024, was $(18,352), a significant decrease from $40,394 in the same period last year, representing a change of $(58,746)[16] - The net cash provided by operating activities for the nine months ended September 30, 2024, was $11,093, down from $68,077 in the previous year, a decrease of approximately 83.7%[16] - Cash dividends per share for Class A and Class B common stock increased by 17% to $0.07 in Q3 2024, compared to $0.06 in Q3 2023[26] - Cash dividends paid in 2024 amounted to $10,320, compared to $9,284 in 2023[31] Balance Sheet - The company's total debt increased to $238.4 million as of September 30, 2024, from $209.1 million at the end of 2023[9] - Total current assets as of September 30, 2024, were $362.368 million, a slight decrease from $369.346 million as of December 31, 2023[28] - Total assets increased to $800.794 million as of September 30, 2024, compared to $799.199 million at the end of 2023[28] - Total current liabilities decreased to $283.366 million as of September 30, 2024, from $299.292 million at the end of 2023[28] - Long-term debt and finance leases increased to $205.918 million as of September 30, 2024, compared to $194.335 million at the end of 2023[28] Cost and Expenses - Unallocated corporate costs rose to $7.0 million in Q3 2024, compared to $4.8 million in the same period of 2023[7] - Direct compensation and fringe benefits in North America increased by 6.4% to $57,055 in Q3 2024 from $53,635 in Q3 2023[29] - Total operating expenses for North America rose by 6.3% to $73,886 in Q3 2024 compared to $69,519 in Q3 2023[29] Non-GAAP Metrics - Non-GAAP adjusted EBITDA for the nine months ended September 30, 2024, was $80,816, compared to $103,024 for the same period in 2023, indicating a decline of approximately 21.5%[15] - Non-GAAP adjusted net income for the three months ended September 30, 2024, was $10,852, down from $12,319 in the prior year, indicating a decrease of about 11.9%[17] - The company’s net income attributable to shareholders for the nine months ended September 30, 2024, was $20,874, compared to $31,427 in the same period last year, a decline of approximately 33.6%[19] Company Overview - The company operates in over 70 countries, providing claims management and outsourcing solutions to insurance companies and self-insured entities[23]

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited financial statements for H1 2024 show decreased revenues and net income, a decline in total assets, and negative operating cash flow [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2024 revenues slightly decreased, while H1 2024 revenues and net income significantly declined year-over-year Q2 2024 vs Q2 2023 Statement of Operations (in thousands, except EPS) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $326,853 | $337,629 | -3.2% | | **Income Before Income Taxes** | $12,988 | $13,551 | -4.2% | | **Net Income Attributable to Shareholders** | $8,584 | $8,427 | +1.9% | | **Diluted EPS (Class A & B)** | $0.17 | $0.17 | 0.0% | H1 2024 vs H1 2023 Statement of Operations (in thousands, except EPS) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $639,926 | $665,567 | -3.9% | | **Income Before Income Taxes** | $16,814 | $29,552 | -43.1% | | **Net Income Attributable to Shareholders** | $11,421 | $19,108 | -40.2% | | **Diluted EPS (Class A & B)** | $0.23 | $0.39 | -41.0% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$785.8 million** by June 30, 2024, while total shareholders' investment increased to **$149.7 million** Balance Sheet Summary (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $351,995 | $369,346 | | **Total Assets** | $785,812 | $799,199 | | **Total Current Liabilities** | $272,224 | $299,292 | | **Total Liabilities** | $636,105 | $659,368 | | **Total Shareholders' Investment** | $149,707 | $139,831 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned negative, using **$8.3 million** in H1 2024, while financing activities provided **$15.7 million** Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(8,253) | $27,169 | | **Net cash used in investing activities** | $(18,449) | $(17,945) | | **Net cash provided by (used in) financing activities** | $15,655 | $(8,478) | | **(Decrease) Increase in Cash** | $(11,202) | $1,808 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment information, and significant client funds held off-balance sheet in custodial accounts - The company operates through four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[18](index=18&type=chunk)[50](index=50&type=chunk) - As of June 30, 2024, the company had **$108.8 million** of remaining performance obligations, with approximately **73%** expected to be recognized as revenue within one year[32](index=32&type=chunk) - Client funds held in custodial accounts, which are not on the balance sheet, totaled **$554.1 million** at June 30, 2024, up from **$494.3 million** at December 31, 2023[57](index=57&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Consolidated revenues decreased **3.9%** in H1 2024 due to Platform Solutions, while operating cash flow turned negative [Results of Operations](index=26&type=section&id=Results%20of%20Operations) H1 2024 consolidated revenues decreased **3.9%** due to Platform Solutions, despite growth in Broadspire and International Operations H1 2024 Segment Revenue Before Reimbursements (in thousands) | Segment | H1 2024 Revenue | H1 2023 Revenue | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $153,395 | $153,959 | (0.4)% | | International Operations | $200,375 | $187,175 | +7.1% | | Broadspire | $191,385 | $171,298 | +11.7% | | Platform Solutions | $70,726 | $128,458 | (44.9)% | | **Total** | **$615,881** | **$640,890** | **(3.9)%** | - Total cases received decreased by **7.9%** in H1 2024, primarily driven by a **29.0%** drop in the Platform Solutions segment[67](index=67&type=chunk)[68](index=68&type=chunk) - SG&A expenses increased by **$12.4 million** (**9.0%**) in H1 2024 compared to H1 2023, mainly due to higher professional fees, IT costs, bad debt expense, and compensation[69](index=69&type=chunk) [Segment Performance](index=28&type=section&id=Segment%20Performance) Broadspire and International Operations saw earnings growth, while North America Loss Adjusting and Platform Solutions declined H1 2024 Segment Operating Earnings (in thousands) | Segment | H1 2024 Operating Earnings | H1 2023 Operating Earnings | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $9,364 | $11,965 | (21.7)% | | International Operations | $7,392 | $6,777 | +9.1% | | Broadspire | $27,895 | $16,075 | +73.5% | | Platform Solutions | $2,584 | $18,072 | (85.7)% | | **Total** | **$47,235** | **$52,889** | **(10.7)%** | - North America Loss Adjusting saw a **17.2%** decrease in cases received in H1 2024, largely due to the loss of a high-volume, low-severity client in Canada[82](index=82&type=chunk)[86](index=86&type=chunk) - Broadspire's revenue growth was driven by new client programs and increased medical management usage. The slight **0.8%** increase in case volume masks a significant rise in Medical Management referrals, which offset a non-recurring large batch of disability claims from the prior year[100](index=100&type=chunk)[103](index=103&type=chunk)[107](index=107&type=chunk) - Platform Solutions' revenue decline was primarily in the Networks service line, which provides staff augmentation and is sensitive to weather-related claim events, which were higher in the prior year[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity was **$256.7 million** as of June 30, 2024, with operating activities using **$8.3 million** in cash - Total liquidity as of June 30, 2024, was **$256.7 million**, consisting of **$46.7 million** in cash and **$210.0 million** in additional borrowing capacity[129](index=129&type=chunk) - Cash from operations was a use of **$8.3 million** in H1 2024, compared to a source of **$27.2 million** in H1 2023, attributed to lower earnings and working capital changes[126](index=126&type=chunk) - Financing activities in H1 2024 included a net increase of **$24.8 million** in revolving credit facility borrowings, **$2.1 million** in share repurchases, and **$6.9 million** in dividend payments[127](index=127&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures have occurred since the December 31, 2023 Annual Report on Form 10-K - There have been no material changes in the Company's market risk exposures since December 31, 2023[133](index=133&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal controls - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2024[134](index=134&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[135](index=135&type=chunk) Part II. Other Information [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) No material updates to risk factors previously disclosed in the Annual Report on Form 10-K for December 31, 2023 - The report directs investors to the risk factors detailed in the Form 10-K for the year ended December 31, 2023[135](index=135&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **145,229** Class B shares in Q2 2024, with **1,268,558** shares remaining for repurchase Share Repurchases in Q2 2024 | Period | Class | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | :--- | | April 2024 | CRD-B | 83,041 | $9.39 | | May 2024 | CRD-B | 35,024 | $9.23 | | June 2024 | CRD-B | 27,164 | $8.70 | | **Q2 Total** | **CRD-B** | **145,229** | - | - As of June 30, 2024, **1,268,558** shares may still be purchased under the repurchase plan, which is authorized through December 31, 2024[136](index=136&type=chunk)[139](index=139&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2024 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2024[137](index=137&type=chunk)

Financial Performance - Revenues before reimbursements for Q2 2024 were $314.2 million, a decrease of (3)% from $324.6 million in Q2 2023[3] - Net income attributable to shareholders for Q2 2024 was $8.6 million, slightly increasing from $8.4 million in the same period last year[3] - Total revenues for Q2 2024 decreased by 3% to $326,853,000 compared to $337,629,000 in Q2 2023[25] - Net income for Q2 2024 increased by 2% to $8,502,000, up from $8,345,000 in Q2 2023[25] - Total revenues for the first half of 2024 decreased by 4% to $639,926,000 compared to $665,567,000 in the same period of 2023[26] - Net income for the first half of 2024 decreased by 41% to $11,281,000, down from $19,075,000 in the first half of 2023[26] - Year-to-date net income for 2024 was $11,281, down from $19,075 in 2023[31] Earnings and Shares - Diluted earnings per share (EPS) remained unchanged at $0.17 for both CRD-A and CRD-B in Q2 2024, consistent with Q2 2023[3] - Non-GAAP diluted EPS for Q2 2024 was $0.25, up from $0.24 in Q2 2023[4] - Earnings per share (EPS) for Class A and Class B common stock remained stable at $0.17 in Q2 2024, unchanged from Q2 2023[25] - Weighted-average shares used to compute diluted earnings per share for Q2 2024 were 30,171, an increase from 29,770 in Q2 2023[22] Revenue Segmentation - Broadspire segment achieved record revenues of $97.1 million in Q2 2024, an increase of 11.3% from $87.2 million in Q2 2023[7] - International Operations revenues before reimbursements were $102.3 million, up 7.3% from $95.3 million in Q2 2023[6] - North America Loss Adjusting revenues were $76.0 million, a slight decrease of (0.4)% from $76.4 million in Q2 2023[5] - Platform Solutions revenues fell by (40.8)% to $38.8 million in Q2 2024, down from $65.6 million in Q2 2023 due to reduced weather-related claim volumes[8] - North America revenues before reimbursements decreased by 0.4% to $76,030, while international operations increased by 7.3% to $95,312[29] Cash Flow and Liquidity - The company's consolidated cash and cash equivalents as of June 30, 2024, totaled $46.7 million, down from $58.4 million at the end of 2023[11] - Free cash flow for the six months ended June 30, 2024, was $(26,702), a decrease of $35,926 compared to $9,224 in the same period of 2023[19] - The company reported a net cash used in operating activities of $(8,253) for the six months ended June 30, 2024, compared to $27,169 in the same period of 2023, a change of $(35,422)[19] - The company reported a decrease in cash and cash equivalents to $48,343 at the end of the period from $48,453 in the previous year[31] Debt and Assets - Total debt outstanding increased to $233.8 million as of June 30, 2024, compared to $209.1 million at the end of 2023[11] - Total assets decreased to $785,812,000 as of June 30, 2024, compared to $799,199,000 at the end of 2023[27] - Total current liabilities decreased to $272,224,000 as of June 30, 2024, down from $299,292,000 at the end of 2023[27] Operating Expenses - Selling, general, and administrative expenses increased by 9% to $149,590,000 in the first half of 2024 compared to $137,184,000 in the same period of 2023[26] - Total operating expenses in North America decreased by 1.8% to $71,145, while international operations increased by 5.5% to $96,581[29] Other Financial Metrics - Non-GAAP adjusted EBITDA for Q2 2024 was $30,613, down 3.0% from $31,539 in Q2 2023[18] - GAAP pretax earnings for the six months ended June 30, 2024, were $16,814, down from $29,552 in the same period of 2023[21] - Non-GAAP adjusted net income for the six months ended June 30, 2024, was $18,939, compared to $25,907 in the same period of 2023[21] Dividends - Cash dividends per share for Class A and Class B common stock increased by 17% to $0.07 in Q2 2024, up from $0.06 in Q2 2023[25] - Cash dividends paid increased to $(6,880) in 2024 from $(5,854) in 2023[31]