Verisk Analytics, Inc. (NASDAQ:VRSK) Q2 2023 Earnings Conference Call August 2, 2023 8:30 AM ET Company Participants Stacey Brodbar - Head, Investor Relations Lee Shavel - President and CEO Elizabeth Mann - Chief Financial Officer Conference Call Participants Heather Balsky - Bank of America George Tong - Goldman Sachs Andrew Steinerman - JP Morgan Toni Kaplan - Morgan Stanley Manav Patnaik - Barclays Greg Peters - Raymond James Andrew Jeffrey - Truist Jeff Silber - BMO Capital Markets Andrew Nicholas - Wil ...

[Part I](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part presents unaudited condensed consolidated financial statements and notes, detailing financial position, performance, and cash flows after strategic dispositions [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section provides the unaudited condensed consolidated financial statements and comprehensive notes, reflecting the company's financial status and performance [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific points in time | Metric | June 30, 2023 (in millions) | December 31, 2022 (in millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Total Assets | $4,315.7 | $6,961.1 | | Total Liabilities | $4,009.9 | $5,193.4 | | Total Stockholders' Equity | $305.8 | $1,767.7 | | Cash and cash equivalents | $308.7 | $112.5 | | Current assets held-for-sale | $— | $362.6 | | Noncurrent assets held-for-sale | $— | $2,728.6 | | Short-term debt and current portion of long-term debt | $3.4 | $1,392.9 | - Total assets and stockholders' equity significantly decreased primarily due to the reclassification and subsequent sale of **assets held-for-sale**[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over periods, including revenues, operating income, and net income from continuing and discontinued operations Three Months Ended June 30 | Metric | 2023 (in millions) | 2022 (in millions) | Change (%) | | :----------------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $675.0 | $612.8 | 10.1% | | Operating income | $306.0 | $247.6 | 23.6% | | Income from continuing operations | $204.3 | $173.6 | 17.7% | | (Loss) income from discontinued operations | $(7.5) | $24.2 | (131.0)% | | Net income attributable to Verisk | $196.9 | $197.7 | (0.4)% | | Basic EPS from continuing operations | $1.41 | $1.10 | 28.2% | | Diluted EPS from continuing operations | $1.41 | $1.09 | 29.4% | Six Months Ended June 30 | Metric | 2023 (in millions) | 2022 (in millions) | Change (%) | | :----------------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $1,326.6 | $1,256.4 | 5.6% | | Operating income | $600.1 | $870.4 | (31.1)% | | Income from continuing operations | $398.7 | $660.6 | (39.6)% | | (Loss) income from discontinued operations | $(145.5) | $43.0 | (438.4)% | | Net income attributable to Verisk | $253.2 | $703.4 | (64.0)% | | Basic EPS from continuing operations | $2.69 | $4.14 | (35.0)% | | Diluted EPS from continuing operations | $2.67 | $4.12 | (35.2)% | - Weighted-average basic shares outstanding decreased by **8.3%** for the three months and **6.8%** for the six months ended June 30, 2023, compared to the prior year[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section reports comprehensive income (loss), including net income and other comprehensive income items not recognized in the income statement Comprehensive Income (Loss) Attributable to Verisk | Period | 2023 (in millions) | 2022 (in millions) | | :----------------------------------- | :----------------- | :----------------- | | Three Months Ended June 30 | $213.1 | $(20.7) | | Six Months Ended June 30 | $1,030.0 | $414.6 | - A significant positive foreign currency translation adjustment of **$775.2 million** for the six months ended June 30, 2023, contributed to the increase in comprehensive income[14](index=14&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details changes in stockholders' equity, reflecting impacts from net income, dividends, share repurchases, and other comprehensive income Total Stockholders' Equity | Date | Amount (in millions) | | :------------------- | :------------------- | | January 1, 2023 | $1,767.7 | | June 30, 2023 | $305.8 | | January 1, 2022 | $2,842.5 | | June 30, 2022 | $2,370.0 | - The decrease in stockholders' equity for the six months ended June 30, 2023, was primarily driven by **$2,538.8 million** in treasury stock acquisitions and **$98.5 million** in common stock dividends[17](index=17&type=chunk) - Other comprehensive income (loss) shifted from a loss of **$731.2 million** at December 31, 2022, to an income of **$45.7 million** at June 30, 2023[17](index=17&type=chunk)[76](index=76&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities, illustrating liquidity and capital management Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2023 (in millions) | 2022 (in millions) | Change (%) | | :----------------------------------- | :----------------- | :----------------- | :--------- | | Net cash provided by operating activities | $558.2 | $529.8 | 5.4% | | Net cash provided by investing activities | $2,858.8 | $451.1 | 533.7% | | Net cash used in financing activities | $(3,401.8) | $(761.0) | 347.0% | - Investing activities saw a substantial increase in cash provided, primarily due to **$3,066.4 million** in proceeds from the sale of the Energy business[19](index=19&type=chunk)[187](index=187&type=chunk) - Financing activities resulted in a significant cash outflow, driven by **$2,500.0 million** for accelerated share repurchases and **$1,390.0 million** in debt repayments[19](index=19&type=chunk)[189](index=189&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Organization](index=12&type=section&id=Note%201.%20Organization) This note describes the company's business and its strategic role as a data analytics and technology partner to the global insurance industry - Verisk Analytics, Inc. is a strategic data analytics and technology partner to the global insurance industry, focusing on operating efficiency, underwriting/claims outcomes, fraud combat, and global risk decisions[21](index=21&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=12&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of financial statement preparation and summarizes the significant accounting policies applied by the company - The financial statements are prepared under **U.S. GAAP**, involving significant management estimates[22](index=22&type=chunk) - The Energy business was classified as discontinued operations in Q4 2022 and sold on February 1, 2023, with prior periods recast[24](index=24&type=chunk) - ASU No. 2023-01 (Leases) is not expected to have a material impact on consolidated financial statements[25](index=25&type=chunk) [Note 3. Revenues](index=13&type=section&id=Note%203.%20Revenues) This note provides a breakdown of revenues by segment and geography, along with details on contract liabilities and revenue recognition Revenues by Segment (Six Months Ended June 30) | Segment | 2023 (in millions) | 2022 (in millions) | | :-------------------------- | :----------------- | :----------------- | | Insurance | $1,326.6 | $1,196.4 | | Energy and Specialized Markets | $— | $22.4 | | Financial Services | $— | $37.6 | | **Total revenues** | **$1,326.6** | **$1,256.4** | Revenues by Geography (Six Months Ended June 30, 2023) | Region | Amount (in millions) | | :-------------- | :----------------- | | United States | $1,115.2 | | United Kingdom | $91.9 | | Other countries | $119.5 | | **Total revenues** | **$1,326.6** | - Contract liabilities (deferred revenues) increased from **$321.7 million** at December 31, 2022, to **$468.7 million** at June 30, 2023[28](index=28&type=chunk)[29](index=29&type=chunk) [Note 4. Investments and Fair Value Measurements](index=15&type=section&id=Note%204.%20Investments%20and%20Fair%20Value%20Measurements) This note details the company's investments and fair value measurements, including classifications and valuation methodologies - Investments in registered investment companies (Level 1 assets) were **$2.5 million** at June 30, 2023, down from **$4.0 million** at December 31, 2022[33](index=33&type=chunk) - Securities without readily determinable market values (accounted for at cost) were **$200.9 million** at June 30, 2023[34](index=34&type=chunk) - The fair value of senior notes (Level 2) was **$2,663.7 million** at June 30, 2023, compared to a carrying value of **$2,832.7 million**[34](index=34&type=chunk) [Note 5. Leases](index=16&type=section&id=Note%205.%20Leases) This note provides information on the company's lease arrangements, including lease costs, remaining terms, and present value of payments Total Lease Cost (Six Months Ended June 30) | Lease Type | 2023 (in millions) | 2022 (in millions) | | :-------------------------- | :----------------- | :----------------- | | Operating lease cost | $17.4 | $25.2 | | Finance lease costs | $7.1 | $6.9 | | **Total lease cost** | **$23.8** | **$31.0** | - Weighted-average remaining lease terms are **8.7 years** for operating leases and **4.4 years** for finance leases as of June 30, 2023[35](index=35&type=chunk) - The present value of total operating lease payments was **$234.1 million** as of June 30, 2023[36](index=36&type=chunk) [Note 6. Acquisitions](index=17&type=section&id=Note%206.%20Acquisitions) This note details recent acquisitions, including purchase prices, goodwill, intangible assets acquired, and contingent payment obligations - Acquired Krug Sachverständigen GmbH for **$43.3 million** and Mavera Holding AB for **$28.3 million** in 2023, expanding claims and casualty offerings in Europe[37](index=37&type=chunk)[38](index=38&type=chunk) - Total goodwill from 2023 acquisitions was **$57.7 million**, and total intangible assets acquired were **$33.7 million**[39](index=39&type=chunk)[40](index=40&type=chunk) - Acquisition-related contingent payments (current portion) decreased to **$8.0 million** at June 30, 2023, from **$29.9 million** at December 31, 2022[43](index=43&type=chunk) [Note 7. Dispositions and Discontinued Operations](index=19&type=section&id=Note%207.%20Dispositions%20and%20Discontinued%20Operations) This note describes the sale of the Energy business and its classification as discontinued operations, including related financial impacts - The sale of the Energy business was completed on February 1, 2023, for a net cash sale price of **$3,066.4 million**[45](index=45&type=chunk) - A loss of **$128.4 million** was recognized from the sale of the Energy business, with an additional **$6.9 million** loss in Q2 2023 from closing adjustments[46](index=46&type=chunk) Financial Results from Discontinued Operations (Six Months Ended June 30) | Metric | 2023 (in millions) | 2022 (in millions) | | :----------------------------------- | :----------------- | :----------------- | | Revenues | $46.8 | $265.4 | | Operating (loss) income | $(139.8) | $41.3 | | (Loss) income from discontinued operations, net of income taxes | $(145.5) | $43.0 | [Note 8. Goodwill and Intangible Assets](index=21&type=section&id=Note%208.%20Goodwill%20and%20Intangible%20Assets) This note provides details on goodwill and intangible assets, including changes due to acquisitions, foreign currency, and impairment assessments - Goodwill for the Insurance segment increased to **$1,755.2 million** at June 30, 2023, driven by 2023 acquisitions (**$57.7 million**) and foreign currency translation adjustments (**$21.6 million**)[50](index=50&type=chunk) - Total intangible assets, net, increased to **$508.0 million** at June 30, 2023, from **$504.8 million** at December 31, 2022[53](index=53&type=chunk) - No additional impairment charges were recognized for goodwill or indefinite-lived intangible assets as of June 30, 2023[51](index=51&type=chunk) [Note 9. Income Taxes](index=23&type=section&id=Note%209.%20Income%20Taxes) This note explains the company's income tax provisions, including effective tax rates and factors influencing tax expenses Effective Tax Rate | Period | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | 23.8% | 19.2% | | Six Months Ended June 30 | 25.4% | 17.9% | - The increase in effective tax rates was primarily due to lower tax benefits from equity compensation and tax charges incurred in structuring the Energy business sale[57](index=57&type=chunk) [Note 10. Debt](index=24&type=section&id=Note%2010.%20Debt) This note details the company's debt structure, including total debt, new issuances, repayments, and revolving credit facility terms - Total debt decreased to **$2,845.5 million** at June 30, 2023, from **$3,736.1 million** at December 31, 2022[58](index=58&type=chunk) - Issued **$500.0 million** in 5.75% senior notes due 2033 on March 3, 2023[60](index=60&type=chunk) - The Syndicated Revolving Credit Facility's maturity was extended to April 5, 2028, with **$995.5 million** available capacity as of June 30, 2023[62](index=62&type=chunk)[63](index=63&type=chunk) [Note 11. Stockholders' Equity](index=26&type=section&id=Note%2011.%20Stockholders'%20Equity) This note provides a comprehensive overview of changes in stockholders' equity, including dividends, share repurchases, and accumulated other comprehensive income - Cash dividends of **$0.34 per share** were approved for Q1 and Q2 2023, totaling **$98.7 million** paid for the six months ended June 30, 2023[68](index=68&type=chunk) - Entered into a **$2.5 billion** Accelerated Share Repurchase (ASR) agreement in March 2023, leading to the repurchase of **10,902,788 shares** for **$2,100 million** during the six months[69](index=69&type=chunk)[70](index=70&type=chunk) - Accumulated other comprehensive income (loss) improved from a loss of **$731.2 million** at December 31, 2022, to an income of **$45.7 million** at June 30, 2023, largely due to foreign currency translation adjustments[76](index=76&type=chunk)[78](index=78&type=chunk) [Note 12. Equity Compensation Plans](index=29&type=section&id=Note%2012.%20Equity%20Compensation%20Plans) This note details the company's equity compensation plans, including shares reserved, stock option exercises, and unrecognized compensation costs - **13,379,717 shares** of common stock were reserved and available for future issuance under the 2021 Incentive Plan as of June 30, 2023[80](index=80&type=chunk) - Cash received from stock option exercises for the six months ended June 30, 2023, was **$114.9 million**, up from **$93.0 million** in the prior year[80](index=80&type=chunk) - Total unrecognized compensation costs related to nonvested stock-based compensation were **$107.1 million**, expected to be recognized over a weighted average period of **2.45 years**[86](index=86&type=chunk) [Note 13. Pension and Postretirement Benefits](index=31&type=section&id=Note%2013.%20Pension%20and%20Postretirement%20Benefits) This note provides information on the company's pension and postretirement benefit plans, including net periodic benefit costs and investment guidelines - Net periodic benefit for the Pension Plan and SERP improved to **$(0.7) million** for the six months ended June 30, 2023, from **$(8.2) million** in the prior year[91](index=91&type=chunk) - Investment guidelines for the Pension Plan assets were changed to target **40% equity securities** and **60% debt securities**[90](index=90&type=chunk) [Note 14. Segment Reporting](index=32&type=section&id=Note%2014.%20Segment%20Reporting) This note outlines the company's reportable segments, focusing on the Insurance segment following the disposition of other businesses - As of February 1, 2023, Verisk operates as one reportable segment: **Insurance**, following the disposition of other segments[99](index=99&type=chunk) Insurance Segment Revenues (Six Months Ended June 30) | Category | 2023 (in millions) | 2022 (in millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :--------- | | Underwriting | $938.6 | $853.8 | 9.9% | | Claims | $388.0 | $342.6 | 13.3% | | **Total Insurance** | **$1,326.6** | **$1,196.4** | **10.9%** | - Insurance segment EBITDA for the six months ended June 30, 2023, was **$720.4 million**, an increase of **13.8%**, with an EBITDA margin of **54.3%**[101](index=101&type=chunk)[171](index=171&type=chunk) - Underwriting revenue growth was primarily due to annual price increases from solution enhancements and expanded sales, while claims revenue grew from property estimating, anti-fraud, and international solutions[162](index=162&type=chunk)[164](index=164&type=chunk) [Note 15. Related Parties](index=35&type=section&id=Note%2015.%20Related%20Parties) This note discloses any material transactions with related parties, ensuring transparency in financial reporting - No material transactions with related parties owning more than **5.0%** of outstanding stock for the six months ended June 30, 2023 and 2022[102](index=102&type=chunk) [Note 16. Commitments and Contingencies](index=36&type=section&id=Note%2016.%20Commitments%20and%20Contingencies) This note details the company's legal proceedings, commitments, and contingent liabilities, including litigation and regulatory inquiries - Involved in ERISA litigation regarding alleged excessive fees in the ISO 401(k) Plan; liability not estimable[103](index=103&type=chunk) - Ongoing civil inquiries by the DOJ and SEC related to government contracts in the former Financial Services segment; timing, outcome, and impact not estimable[104](index=104&type=chunk) - Facing multiple data privacy class action lawsuits alleging violations of privacy acts and failure to safeguard PII; liability not estimable for any cases[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operational results, highlighting the strategic shift to the global insurance industry and key performance metrics [Overview](index=38&type=section&id=Overview) This overview introduces Verisk Analytics, Inc. as a strategic data analytics partner to the global insurance industry, highlighting its recent strategic shift - Verisk Analytics, Inc. is a leading strategic data analytics and technology partner to the global insurance industry[111](index=111&type=chunk) - The company completed the sale of its Energy business on February 1, 2023, which was classified as discontinued operations, marking a strategic shift[113](index=113&type=chunk) [Executive Summary](index=39&type=section&id=Executive%20Summary) This executive summary highlights key performance metrics, revenue composition, and operating expense structure, providing a high-level financial snapshot - Key performance metrics include year-over-year revenue growth, EBITDA growth, and EBITDA margin[115](index=115&type=chunk) - Approximately **80%** of insurance revenues for the six months ended June 30, 2023, were derived from hosted subscriptions, with the remainder from transactional and advisory/consulting solutions[119](index=119&type=chunk)[120](index=120&type=chunk) - Personnel expenses constituted approximately **61%** of total operating expenses (excluding dispositions) for the six months ended June 30, 2023[122](index=122&type=chunk) [Condensed Consolidated Results of Operations](index=41&type=section&id=Condensed%20Consolidated%20Results%20of%20Operations) This section presents a consolidated analysis of the company's financial performance, including revenues, operating income, and net income Consolidated Financial Highlights (Three Months Ended June 30) | Metric | 2023 (in millions) | 2022 (in millions) | Change (%) | | :----------------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $675.0 | $612.8 | 10.1% | | Operating income | $306.0 | $247.6 | 23.6% | | Net income attributable to Verisk | $196.9 | $197.7 | (0.4)% | | EBITDA | $365.1 | $304.5 | 19.9% | | EBITDA Margin | 54.1% | 49.7% | 4.4 ppt | Consolidated Financial Highlights (Six Months Ended June 30) | Metric | 2023 (in millions) | 2022 (in millions) | Change (%) | | :----------------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $1,326.6 | $1,256.4 | 5.6% | | Operating income | $600.1 | $870.4 | (31.1)% | | Net income attributable to Verisk | $253.2 | $703.4 | (64.0)% | | EBITDA | $720.4 | $986.7 | (27.0)% | | EBITDA Margin | 54.3% | 78.5% | (24.2) ppt | - The significant decrease in operating income and net income for the six months ended June 30, 2023, was largely due to the impact of prior year dispositions, which included net gains[128](index=128&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) [Consolidated Results of Operations - Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022](index=44&type=section&id=Consolidated%20Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202023%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202022) This section compares the company's consolidated financial performance for the three months ended June 30, 2023, against the prior year - Total revenues increased by **10.1%** to **$675.0 million**, with Insurance revenues (excluding acquisitions/dispositions) growing by **9.7%**[132](index=132&type=chunk)[133](index=133&type=chunk) - Cost of revenues increased by **10.9%** to **$216.9 million**, driven by recent acquisitions and higher salaries and employee benefits[134](index=134&type=chunk) - Selling, general and administrative expenses decreased by **9.9%** to **$86.8 million**, primarily due to dispositions and a decrease in acquisition-related earn-out costs[135](index=135&type=chunk) - Operating income increased by **23.6%** to **$306.0 million**, and the net income margin from continuing operations improved to **30.3%** from **28.3%**[128](index=128&type=chunk)[142](index=142&type=chunk) [Consolidated Results of Operations - Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022](index=46&type=section&id=Consolidated%20Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202023%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202022) This section compares the company's consolidated financial performance for the six months ended June 30, 2023, against the prior year - Total revenues increased by **5.6%** to **$1,326.6 million**, with Insurance revenues (excluding acquisitions/dispositions) growing by **9.4%**[146](index=146&type=chunk)[147](index=147&type=chunk) - Operating income decreased by **31.1%** to **$600.1 million**, primarily due to the net gain from the sale of environmental health and safety and Financial Services segments in the prior year[128](index=128&type=chunk)[152](index=152&type=chunk) - The effective tax rate increased to **25.4%** from **17.9%**, influenced by a prior year tax benefit from dispositions and tax charges related to the Energy sale in 2023[155](index=155&type=chunk) - Net income margin from continuing operations decreased to **30.1%** from **52.6%**, and EBITDA margin decreased to **54.3%** from **78.5%**, both primarily due to the impact of prior year dispositions[156](index=156&type=chunk)[157](index=157&type=chunk) [Results of Operations by Segment - Insurance](index=49&type=section&id=Results%20of%20Operations%20by%20Segment%20-%20Insurance) This section analyzes the financial performance of the Insurance segment, including revenue growth drivers and EBITDA margin Insurance Segment Revenues (Six Months Ended June 30) | Category | 2023 (in millions) | 2022 (in millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :--------- | | Underwriting | $938.6 | $853.8 | 9.9% | | Claims | $388.0 | $342.6 | 13.3% | | **Total Insurance** | **$1,326.6** | **$1,196.4** | **10.9%** | - Insurance segment EBITDA increased by **13.8%** to **$720.4 million** for the six months ended June 30, 2023, with an EBITDA margin of **54.3%**[171](index=171&type=chunk) - Underwriting revenue growth was primarily due to annual price increases from solution enhancements and expanded sales, while claims revenue grew from property estimating, anti-fraud, and international solutions[162](index=162&type=chunk)[164](index=164&type=chunk) [Energy and Specialized Markets and Financial Segments](index=51&type=section&id=Energy%20and%20Specialized%20Markets%20and%20Financial%20Segments) This section addresses the disposition of the Energy, Specialized Markets, and Financial Services segments, noting their exclusion from current segment analysis - The Energy business was sold on February 1, 2023, and classified as discontinued operations[172](index=172&type=chunk) - The environmental health and safety business (Specialized Markets) and Financial Services segment were sold in March and April 2022, respectively, and did not qualify as discontinued operations[172](index=172&type=chunk)[173](index=173&type=chunk) - These segments are excluded from management's discussion and analysis of results of operations by segment due to their dispositions[174](index=174&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, debt levels, share repurchases, dividends, and overall capital management strategies - Cash and cash equivalents were **$311.2 million** at June 30, 2023, up from **$116.5 million** at December 31, 2022[175](index=175&type=chunk) - The company used **$2,500.0 million** for share repurchases (funded by Energy business sale proceeds) and paid **$98.7 million** in dividends for the six months ended June 30, 2023[177](index=177&type=chunk) - Total debt decreased to **$2,850.0 million** at June 30, 2023, from **$3,740.0 million** at December 31, 2022[178](index=178&type=chunk) - The Syndicated Revolving Credit Facility's maturity was extended to April 5, 2028, with **$995.5 million** available capacity as of June 30, 2023[180](index=180&type=chunk)[181](index=181&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2023 (in millions) | 2022 (in millions) | Change (%) | | :----------------------------------- | :----------------- | :----------------- | :--------- | | Net cash provided by operating activities | $558.2 | $529.8 | 5.4% | | Net cash provided by investing activities | $2,858.8 | $451.1 | 533.7% | | Net cash used in financing activities | $(3,401.8) | $(761.0) | 347.0% | [Off-Balance Sheet Arrangements](index=55&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of any material off-balance sheet arrangements for the company - The company has no off-balance sheet arrangements[191](index=191&type=chunk) [Contractual Obligations](index=55&type=section&id=Contractual%20Obligations) This section states that there have been no material changes to the company's contractual obligations since the last annual report - No material changes to contractual obligations since the 2022 10-K[192](index=192&type=chunk) [Critical Accounting Estimates](index=55&type=section&id=Critical%20Accounting%20Estimates) This section identifies key accounting estimates and policies, noting no material changes since the prior annual report - Key accounting estimates include acquisition purchase price allocations, revenue recognition, goodwill and intangible assets, pension benefits, stock-based compensation, income taxes, and allowance for doubtful accounts[193](index=193&type=chunk) - No material changes to critical accounting policies and estimates since the 2022 10-K[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the company's market risks since the last annual report - Market risks at June 30, 2023, have not materially changed from those discussed in the 2022 10-K[194](index=194&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2023[196](index=196&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2023[197](index=197&type=chunk) [Part II](index=56&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This part provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, with details provided in Note 16 to the condensed consolidated financial statements - Refer to Note 16 for a description of significant current legal proceedings[199](index=199&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously reported in the annual report on Form 10-K and the prior quarterly report on Form 10-Q - No material changes in risk factors since the 2022 10-K and Q1 2023 10-Q[200](index=200&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the period. The company had $941.3 million available for share repurchases as of June 30, 2023, but did not make any repurchases during the quarter - No unregistered sales of equity securities during the period[201](index=201&type=chunk) - **$941.3 million** was available for share repurchases as of June 30, 2023, but no repurchases were made during the quarter[202](index=202&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - No defaults upon senior securities[203](index=203&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable to the company - No mine safety disclosures[204](index=204&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2023 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements adopted or terminated by directors or officers during the quarter[205](index=205&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including amendments to credit agreements and required certifications - The exhibit index includes the Fifth Amendment to the Second Amended and Restated Credit Agreement and various certifications (CEO, CFO)[209](index=209&type=chunk) [Signatures](index=58&type=section&id=SIGNATURES) This section confirms the official signing of the report by the Chief Financial Officer on behalf of Verisk Analytics, Inc. [Signatures](index=58&type=section&id=SIGNATURES) The report was duly signed on behalf of Verisk Analytics, Inc. by Elizabeth D. Mann, Chief Financial Officer, on August 2, 2023 - The report was signed by Elizabeth D. Mann, Chief Financial Officer, on August 2, 2023[213](index=213&type=chunk)

Verisk Analytics, Inc. (NASDAQ:VRSK) Q1 2023 Results Conference Call May 3, 2023 8:30 AM ET Company Participants Stacey Brodbar - Head, IR Lee Shavel - President, CEO Elizabeth Mann - CFO Neil Spector - President, Underwriting Solutions Maroun Mourad - President, Claims Solutions Conference Call Participants Alex Kramm - UBS Andrew Steinerman - JP Morgan Andrew Nicholas - William Blair Ashish Sabadra - RBC Greg Peters - Raymond James Faiza Alwy - Deutsche Bank Heather Balsky - Bank of America Jeff Silber - ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-34480 VERISK ANALYTICS, INC. (Exact name of registrant as specified in its charter) Delaware 26-2994223 (State or other ...

Verisk Analytics, Inc. (NASDAQ:VRSK) Q4 2022 Earnings Conference Call March 1, 2023 8:30 AM ET Company Participants Stacey Brodbar - Head, Investor Relations Lee Shavel - President and Chief Executive Officer Elizabeth Mann - Chief Financial Officer Maroun Mourad - President, Claims Solutions Neil Spector - President, Underwriting Solutions Conference Call Participants Toni Kaplan - Morgan Stanley George Tong - Goldman Sachs Heather Balsky - Bank of America Ashish Sabadra - RBC Capital Markets Hans Hoffman ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-34480 VERISK ANALYTICS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporat ...

Verisk Analytics, Inc. (NASDAQ:VRSK) Q3 2022 Earnings Conference Call November 2, 2022 8:30 AM ET Company Participants Stacey Brodbar – Head-Investor Relations Lee Shavel – Chief Executive Officer Mark Anquillare – President and Chief Operating Officer Elizabeth Mann – Chief Financial Officer Conference Call Participants Ashish Sabadra – RBC Capital Markets Jeff Meuler – Baird Alex Kramm – UBS Financial Toni Kaplan – Morgan Stanley Manav Patnaik – Barclays Andrew Steinerman – JPMorgan Greg Peters – Raymond ...

3Q2022 Earnings Presentation November 1, 2022 ©Verisk Analytics, Inc. All rights reserved1 . 3Q2022 Earnings Presentation Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures Forward-Looking Statements This release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be mate ...

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited financial information for the company [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Verisk Analytics, Inc.'s unaudited condensed consolidated financial statements for the periods ending September 30, 2022 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$6,974.6 million** as of September 30, 2022, primarily due to reduced goodwill and intangible assets, while stockholders' equity declined due to share repurchases Condensed Consolidated Balance Sheet Highlights (in millions) | | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$6,974.6** | **$7,808.1** | | Cash and cash equivalents | $276.8 | $280.3 | | Goodwill | $3,655.6 | $4,331.2 | | Intangible assets, net | $1,090.5 | $1,225.9 | | **Total Liabilities** | **$4,968.6** | **$4,965.6** | | Long-term debt | $2,343.7 | $2,342.8 | | **Total Stockholders' Equity** | **$2,006.0** | **$2,842.5** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2022 revenues slightly decreased to **$745.3 million**, while nine-month revenues increased to **$2,267.1 million**, with net income significantly boosted by disposition gains Q3 and Nine Months 2022 vs 2021 Performance (in millions, except per share data) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $745.3 | $759.0 | $2,267.1 | $2,232.6 | | Operating Income | $276.6 | $288.9 | $1,188.3 | $806.7 | | Net Income Attributable to Verisk | $189.4 | $201.7 | $892.8 | $524.3 | | Diluted EPS | $1.20 | $1.24 | $5.59 | $3.21 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to **$810.0 million** for the nine months ended September 30, 2022, while investing activities saw a net inflow from asset sales, and financing outflows increased due to share repurchases Nine Months Ended September 30, Cash Flow Summary (in millions) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $810.0 | $967.1 | | Net cash (used in) provided by investing activities | $383.2 | $(261.2) | | Net cash used in financing activities | $(1,160.8) | $(617.1) | | Net (decrease) increase in cash | $(3.5) | $83.3 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, significant dispositions and acquisitions, segment reporting, share repurchases, debt structure, legal contingencies, and the subsequent agreement to sell the Energy business - In 2022, the company sold its environmental health and safety business for **$575.0 million** (net) and its Financial Services segment for **$498.3 million** (net) These transactions did not qualify as discontinued operations[47](index=47&type=chunk)[48](index=48&type=chunk) - Key acquisitions in 2022 included Opta Information Intelligence Corp. for **$217.5 million** and Infutor Data Solutions, LLC for **$220.7 million**, both integrated into the Insurance segment[40](index=40&type=chunk)[41](index=41&type=chunk) - On October 28, 2022, the company entered into an agreement to sell its Energy business to Veritas Capital for up to **$3.3 billion**, with the transaction expected to close in Q1 2023[107](index=107&type=chunk) - The company is involved in several legal proceedings, including ERISA litigation regarding 401(k) plan fees, a DOJ inquiry related to the former Financial Services segment, and data privacy class action lawsuits The company cannot reasonably estimate potential liability for these matters[100](index=100&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, strategic dispositions, and segment results, noting a Q3 2022 revenue decrease to **$745.3 million** and a nine-month revenue increase, with significant share repurchases and debt management - The company has strategically shifted its focus by selling its environmental health and safety business and its Financial Services segment in 2022[111](index=111&type=chunk) Consolidated Revenue and EBITDA Performance (in millions) | Metric | Q3 2022 | Q3 2021 | % Change | Nine Months 2022 | Nine Months 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $745.3 | $759.0 | (1.8)% | $2,267.1 | $2,232.6 | 1.5% | | EBITDA | $368.0 | $378.7 | (2.8)% | $1,467.8 | $1,095.0 | 34.0% | - Excluding the net impact of acquisitions and dispositions, consolidated revenue grew **3.2%** in Q3 2022 and **4.1%** in the first nine months of 2022[130](index=130&type=chunk)[144](index=144&type=chunk) - During the nine months ended September 30, 2022, the company repurchased **$1,196.3 million** of its common stock and paid dividends of **$147.2 million**[182](index=182&type=chunk) [Results of Operations by Segment](index=44&type=section&id=Results%20of%20Operations%20by%20Segment) The Insurance segment achieved **9.4%** revenue growth in Q3 2022, while the Energy and Specialized Markets segment declined **18.5%** due to dispositions and Russian operations suspension Insurance Segment Revenue - Q3 2022 vs Q3 2021 (in millions) | Category | Q3 2022 | Q3 2021 | % Change | % Change (ex-acquisitions) | | :--- | :--- | :--- | :--- | :--- | | Underwriting & rating | $436.2 | $390.5 | 11.7% | 5.5% | | Claims | $173.9 | $167.4 | 3.9% | 1.7% | | **Total Insurance** | **$610.1** | **$557.9** | **9.4%** | **4.4%** | - Energy and Specialized Markets revenue decreased by **$30.7 million** (**18.5%**) in Q3 2022, with dispositions accounting for a net decrease of **$28.8 million** The remaining decrease was due to the suspension of Russian operations and lower consulting revenue[169](index=169&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$280.6 million** in cash with **$3.42 billion** total debt as of September 30, 2022, maintaining a **$1.0 billion** credit facility, while operating cash flow decreased to **$810.0 million** - The company had total debt of **$3.42 billion** as of September 30, 2022[183](index=183&type=chunk) - As of September 30, 2022, available capacity under the **$1.0 billion** Credit Facility was **$55.2 million** Subsequently, capacity was increased to **$420.2 million** through repayments and securing additional capacity[185](index=185&type=chunk) - Net cash from operating activities decreased **16.2%** to **$810.0 million** for the nine months ended Sep 30, 2022, primarily due to a **$119.7 million** increase in tax payments and the impact of business dispositions[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks as of September 30, 2022, have not materially changed from those disclosed in the 2021 Annual Report on Form 10-K - There have been no material changes in market risks since the company's 2021 Annual Report on Form 10-K[198](index=198&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of September 30, 2022, the company's disclosure controls and procedures were effective at a reasonable assurance level[200](index=200&type=chunk) - No material changes to internal control over financial reporting occurred during the third quarter of 2022[201](index=201&type=chunk) [PART II — OTHER INFORMATION](index=52&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section provides other information not included in the financial statements [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16 of the condensed consolidated financial statements for a detailed description of significant legal proceedings - For a description of significant legal proceedings, the report refers to Note 16 in Part I, Item 1 of the financial statements[203](index=203&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Risk Factors section of the 2021 Annual Report on Form 10-K for a discussion of risks - The report refers to the Risk Factors section of the previously filed 2021 Annual Report on Form 10-K for a discussion of risks[204](index=204&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, repurchasing **1,603,586** shares for **$300.0 million** in Q3 2022, with **$407.5 million** remaining for future repurchases Issuer Purchases of Equity Securities (Q3 2022) | Period | Total Shares Purchased | Average Price Paid per Share | Total Value (millions) | | :--- | :--- | :--- | :--- | | Jul 1 - Jul 31, 2022 | 1,386,562 | $173.09 | - | | Aug 1 - Aug 31, 2022 | — | — | - | | Sep 1 - Sep 30, 2022 | 217,024 | $187.08 | - | | **Total** | **1,603,586** | **$187.08** | **$300.0** | - As of September 30, 2022, **$407.5 million** was available for share repurchases under the authorized program[206](index=206&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No other material information required to be disclosed under this item for the period - None[209](index=209&type=chunk)

Verisk Analytics, Inc. (NASDAQ:VRSK) Q2 2022 Earnings Conference Call August 3, 2022 8:30 AM ET Company Participants Stacey Brodbar - Head of IR Lee Shavel - CEO Mark Anquillare - President and COO David Grover - Controller, CAO and Interim CFO Conference Call Participants Heather Balsky - Bank of America Alex Kramm - UBS Toni Kaplan - Morgan Stanley Manav Patnaik - Barclays Jeff Silber - BMO Capital Markets Faiza Alwy - Deutsche Bank Andrew Jeffrey - Truist Securities Jeff Meuler - Baird Andrew Nicholas - ...