Core Insights - Verisk Analytics reported mixed third-quarter financial results, with earnings per share of $1.72 beating the consensus estimate of $1.70, but quarterly sales of $768.3 million missing the estimate of $776.094 million [1] - The company cut its FY2025 sales guidance from a range of $3.090 billion-$3.130 billion to $3.050 billion-$3.080 billion while affirming adjusted EPS guidance of $6.80 to $7.00 [2] - CEO Lee Shavel expressed confidence in the company's alignment with long-term growth targets and highlighted ongoing strategic engagements that are expanding client partnerships [3] Financial Performance - Quarterly earnings per share: $1.72, exceeding analyst expectations of $1.70 [1] - Quarterly sales: $768.3 million, falling short of the consensus estimate of $776.094 million [1] - FY2025 adjusted EPS guidance: $6.80 to $7.00 [2] - FY2025 sales guidance revised to $3.050 billion-$3.080 billion from $3.090 billion-$3.130 billion [2] Analyst Ratings and Price Targets - Barclays upgraded Verisk from Equal-Weight to Overweight, lowering the price target from $310 to $275 [6] - Wells Fargo maintained an Overweight rating, reducing the price target from $334 to $300 [6] - Goldman Sachs kept a Neutral rating, decreasing the price target from $315 to $239 [6] - RBC Capital maintained an Outperform rating, lowering the price target from $314 to $250 [6] - Evercore ISI Group maintained an In-Line rating, reducing the price target from $262 to $250 [6]

Core Insights - Verisk Analytics (VRSK) shares have declined approximately 30% since the company shifted its strategic focus and divested non-core business activities in previous years [1] Group 1: Company Performance - The strategic direction of Verisk Analytics has been criticized as leading to overvaluation, prompting a call for caution regarding its stock price [1] - The company has undergone significant changes, including divestments, which have impacted its market performance [1] Group 2: Investment Opportunities - The investment group "Value In Corporate Events" focuses on identifying actionable ideas from major corporate events such as IPOs, mergers, acquisitions, and earnings reports [1] - The group aims to provide coverage of 10 major events monthly to uncover the best investment opportunities [1]

Core Insights - Verisk Analytics reported its third-quarter results, which led to a significant stock sell-off of over 10% despite the S&P 500 index remaining flat [1] Financial Performance - Revenue for the third quarter was $768 million, marking a nearly 6% increase compared to the same quarter in 2024 [2] - Net income, not in accordance with GAAP, slightly increased to just under $241 million ($1.72 per share), up from almost $239 million in the previous year [2] - The earnings per share slightly beat the consensus analyst estimate of $1.70, but revenue fell short of expectations, which were over $776 million [3] Business Strategy and Guidance - The revenue growth was primarily driven by organic expansion, with CEO Lee Shavel highlighting new opportunities for partnerships and an expanding client base [4] - The company revised its full-year 2025 revenue guidance down to a range of $3.05 billion to $3.08 billion, from a previous estimate of $3.09 billion to $3.13 billion, while maintaining its adjusted profitability forecast of $6.80 to $7 per share [4]

Core Insights - Verisk (VRSK) reported strong third-quarter fiscal 2025 results, with adjusted earnings of $1.72 per share, exceeding the Zacks Consensus Estimate by 1.8% and reflecting a 3% year-over-year increase [1][9] - Total revenues reached $768.3 million, slightly missing consensus estimates but showing a 5.9% increase compared to the previous year [1][9] Performance Comparison - VRSK shares have increased by 6.8% year-to-date, outperforming the industry, which has declined by 6.2%, and the Zacks S&P 500 Composite, which has grown by 8% [2] Quarterly Financial Details - Underwriting and Rating revenues rose by 6.9% year-over-year to $542 million, surpassing estimates [3] - Claim revenues increased by 3.6% to $226 million, also beating estimates [3] - Adjusted EBITDA grew by 7.2% to $429 million, with an adjusted EBITDA margin of 55.8%, up from 55.2% in the previous year [4] Cash Flow and Shareholder Returns - The company ended the quarter with cash and cash equivalents of $2.1 billion, a significant increase from $628.7 million at the end of the previous quarter [4] - Net cash utilized from operating activities was $404 million, with free cash flow of $336 million [5] - VRSK repurchased shares worth $100 million and returned $62.6 million in dividends to shareholders during the quarter [5] 2025 Guidance - For fiscal 2025, Verisk lowered its revenue guidance to $3.05-$3.08 billion, below the previous estimate and the Zacks Consensus Estimate of $3.1 billion [6] - Adjusted EBITDA forecast was also reduced to $1.69-$1.72 billion, with an anticipated adjusted EBITDA margin of 55-55.8% [6] - The adjusted earnings per share growth guidance remains at $6.80-$7.00, with the midpoint lower than the consensus mark [7]

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Financial Data and Key Metrics Changes - In Q3 2025, consolidated revenue was $768 million, reflecting a 5.9% increase year-over-year, driven by growth in both underwriting and claims [18] - Net income rose to $226 million, a 2.5% increase compared to the previous year, with diluted GAAP earnings per share at $1.61, up 5% [19] - Organic constant currency (OCC) revenue growth was 5.5%, with adjusted EBITDA growth of 8.8% and an expanded EBITDA margin of 55.8% [7][26] Business Line Data and Key Metrics Changes - Subscription revenues, which account for 84% of total revenue, grew 8.7% on an OCC basis, compounding on the previous year's 9.1% growth [21] - Transactional revenues, making up 16% of total revenues, declined 8.8% on an OCC basis, primarily due to lower transactional volumes in property estimating solutions from historically low weather activity [23][24] Market Data and Key Metrics Changes - Weather events in Q3 2025 declined 18% year-over-year and were 31% below the five-year average, marking the lowest level of storm events in the U.S. since 2017 [24] - The company noted that 2025 is on track to be the first year since 2015 without a named U.S. hurricane making landfall so far [24] Company Strategy and Development Direction - The company is committed to investing in AI enhancements and integrations to deliver value to clients, with a focus on strategic engagement leading to increased pipeline opportunities [9][10] - The AccuLynx acquisition is still viewed as strategically and financially beneficial, despite delays in FTC approval [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver results in line with long-term targets, despite temporary factors impacting growth [20] - The company anticipates that the strategic engagement initiatives and product innovations, including AI, will enhance the value of their data and expand growth opportunities [16] Other Important Information - The company paid a cash dividend of $0.45 per share, a 15% increase from the prior year, and repurchased $100 million of common stock [30] - Adjusted net income increased 1% to $241 million, with diluted adjusted EPS rising 3% to $1.72 for the quarter [29] Q&A Session Summary Question: Update on AccuLynx deal and ServiceTitan partnership - Management confirmed ongoing collaboration with the FTC regarding the AccuLynx deal and clarified that ServiceTitan is not the main competitor of AccuLynx [36] Question: Competitive landscape regarding AI startups - Management acknowledged the presence of AI startups but emphasized the company's strong position due to proprietary data and industry expertise [39] Question: Future pricing opportunities amid decelerating net written premiums - Management highlighted the potential for upsell revenue through AI enhancements and integration of data sets into clients' strategies [44] Question: Impact of auto underwriting market dynamics - Management noted that the auto underwriting business is not directly linked to premium growth and emphasized the strategic benefits of their Lightspeed product [50] Question: Clarification on guidance reduction due to AccuLynx deal - Management did not break down the guidance changes but indicated that the overall impact was a combination of factors including weather and the AccuLynx deal [55] Question: Cash flow and free cash flow growth - Management reported strong free cash flow growth driven by improved collections and lower cash taxes, with expectations for continued growth [65] Question: Competitive pressure in the auto market - Management reiterated ongoing competitive pressures in the auto market but emphasized efforts to differentiate their products [69] Question: Industry premium growth expectations - Management indicated that the industry is expected to normalize to mid-single digits in 2025 after experiencing high single-digit growth in 2024 [73][76]

Financial Data and Key Metrics Changes - In Q3 2025, consolidated revenue was $768 million, reflecting a 5.9% increase year-over-year, with net income rising 2.5% to $226 million and diluted GAAP EPS increasing by 5% to $1.61 [18][19] - Organic constant currency (OCC) revenue growth was 5.5%, with subscription revenue growth at 8.7%, while transactional revenue declined by 8.8% due to low severe weather activity [6][7][19] - Year-to-date performance showed 7.1% OCC revenue growth and 9.4% OCC adjusted EBITDA growth, with an adjusted EBITDA margin of 56.3% [7][19] Business Line Data and Key Metrics Changes - Subscription revenues, comprising 84% of total revenue, grew 8.7% on an OCC basis, driven by strong performance across various subscription-based solutions [21] - Transactional revenues, making up 16% of total revenues, declined 8.8% on an OCC basis, primarily due to lower transactional volumes in property estimating solutions [23][24] Market Data and Key Metrics Changes - The third quarter experienced a historically low level of weather activity, with weather events declining 18% year-over-year and 31% below the five-year average, impacting claims volumes significantly [24] - The company noted that 2025 is on track to be the first year since 2015 without a named U.S. hurricane making landfall [24] Company Strategy and Development Direction - The company is focused on enhancing AI capabilities and integrating them into client solutions, with strong client interest in AI enhancements [10][11][12] - Strategic engagement with clients is leading to increased data contributions and pipeline opportunities, with 2025 expected to be the strongest sales year yet [9][16] - The company is committed to investing in integrations and innovations to deliver value to clients, particularly in the areas of anti-fraud and extreme event solutions [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver results in line with long-term targets despite temporary factors impacting growth [20] - The company anticipates continued strong subscription growth and sees opportunities for pricing adjustments based on enhanced value delivery through AI and data integration [45][46] - The pending acquisition of AccuLynx has faced delays due to FTC review, with no material benefits expected in 2025 [17][30] Other Important Information - The company paid a cash dividend of $0.45 per share, a 15% increase from the prior year, and repurchased $100 million of common stock [29][30] - Adjusted net income increased by 1% to $241 million, with diluted adjusted EPS rising by 3% to $1.72 for the quarter [29] Q&A Session Summary Question: Update on the AccuLynx deal and its implications - Management is working collaboratively with the FTC for approval and believes in the strategic merits of the deal despite the delay [36] Question: Competitive landscape regarding AI startups - The company sees many AI startups but believes its proprietary data and industry expertise provide a strong competitive advantage [39][40] Question: Future pricing opportunities amid decelerating net written premiums - Management sees real opportunities for pricing adjustments based on the value delivered through AI enhancements and data integration [44][46] Question: Impact of auto underwriting market dynamics - The auto underwriting business is not directly linked to premium growth, and the company continues to focus on product differentiation and client feedback [50][52] Question: Clarification on guidance reduction due to AccuLynx - Management did not break down the guidance changes but indicated that the removal of AccuLynx's impact was a factor [56] Question: Expectations for free cash flow growth - Free cash flow growth is expected to continue in line with EBITDA growth, driven by improved collections and lower cash taxes [65] Question: Competitive pressures in the auto market - The company is focusing on product differentiation and leveraging deeper data sets to maintain or expand market share [69][70] Question: Industry premium growth expectations - The industry is expected to normalize to mid-single digits in 2025, with the company focusing on value delivery rather than solely on premium growth [73][76]

Group 1 - Verisk Analytics reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.69 per share, and showing an increase from $1.67 per share a year ago, representing an earnings surprise of +1.78% [1] - The company posted revenues of $768.3 million for the quarter ended September 2025, which was below the Zacks Consensus Estimate by 0.82%, but an increase from $725.3 million year-over-year [2] - Over the last four quarters, Verisk has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Group 2 - The stock has underperformed, losing about 15.7% since the beginning of the year, while the S&P 500 has gained 17.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.66 on revenues of $799.8 million, and for the current fiscal year, it is $6.98 on revenues of $3.1 billion [7] Group 3 - The Zacks Industry Rank indicates that the Business - Information Services sector is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Verisk was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Financial Data and Key Metrics Changes - In Q3 2025, consolidated revenue was $768 million, reflecting a 5.9% increase year-over-year, with net income rising 2.5% to $226 million and diluted GAAP earnings per share increasing 5% to $1.61 [19][28] - Organic constant currency (OCC) revenue growth was 5.5%, with subscription revenue growth at 8.7% [6][21] - OCC adjusted EBITDA growth was 8.8%, with an adjusted EBITDA margin of 55.8%, up 60 basis points from the prior year [25][26] Business Line Data and Key Metrics Changes - Subscription revenues, comprising 84% of total revenue, grew 8.7% on an OCC basis, while transactional revenues, making up 16% of total revenues, declined 8.8% due to lower weather activity [21][23] - Underwriting revenues grew 5.8%, and claims revenues increased by 5% on an OCC basis [19][20] - The decline in transactional revenue was primarily attributed to lower claims assignments in property estimating solutions due to historically low weather activity [23][24] Market Data and Key Metrics Changes - Weather events in Q3 2025 were 18% lower than the previous year and 31% below the five-year average, marking the lowest level of storm events in the U.S. since 2017 [24] - The company noted that 2025 is on track to be the first year since 2015 without a named U.S. hurricane making landfall [24] Company Strategy and Development Direction - The company is focused on enhancing AI capabilities and integrating them into existing solutions, which is seen as a significant growth opportunity [10][11] - Strategic engagement with clients has increased, leading to more pipeline opportunities and a strong sales year anticipated for 2025 [9][17] - The company is committed to investing in integrations and new technologies to deliver value to clients [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth targets despite temporary factors impacting Q3 results, such as low weather activity and a reduction in a government contract [20][28] - The company expects to maintain strong subscription growth and sees AI as a critical component for future value delivery [10][11][68] - Guidance for 2025 was adjusted to exclude any material financial benefit from the pending AccuLynx acquisition, with expected consolidated revenue between $3.05 billion and $3.08 billion [29][30] Other Important Information - The acquisition of AccuLynx is still under review by the FTC, with no expected material benefit in 2025 [18][34] - The company has increased its cash dividend by 15% to $0.45 per share and repurchased $100 million of common stock [29] Q&A Session Summary Question: Update on AccuLynx deal and ServiceTitan agreement - Management confirmed ongoing collaboration with the FTC regarding the AccuLynx deal and clarified that ServiceTitan is not the main competitor of AccuLynx [33][34] Question: Competitive landscape regarding AI startups - Management acknowledged the presence of AI startups but emphasized the company's strong position due to proprietary data and industry expertise [36][38] Question: Future pricing opportunities amid decelerating net written premiums - Management sees opportunities for pricing adjustments based on the value delivered through AI enhancements and integration of data sets [41][43] Question: Impact of auto underwriting market dynamics - Management indicated that the auto underwriting business is not directly linked to premium growth and that shopping activity remains stable [47][49] Question: Clarification on guidance reduction due to AccuLynx deal - Management did not break down the guidance changes but indicated that the overall guidance reflects the impact of temporary factors [51][52] Question: Cash flow and free cash flow growth - Management highlighted strong free cash flow growth driven by improved collections and lower cash taxes, with expectations for continued growth [57][59] Question: Competitive pressure in the auto market - Management reiterated ongoing competitive pressures in the auto market but emphasized efforts to differentiate products [60][61] Question: Industry premium growth expectations - Management noted high single-digit premium growth in 2024, normalizing to mid-single digits in 2025 [64][66]

Financial Performance - Revenue reached $768 million, a 5.9% increase year-over-year, with organic constant currency (OCC) growth of 5.5%[12] - Adjusted EBITDA grew to $429 million, up 7.2% year-over-year, with OCC growth of 8.8%[12] - Adjusted EBITDA margin expanded by 60 bps to 55.8%[9, 12] - Diluted adjusted EPS increased by 3.0% to $1.72[9, 12] - Free cash flow surged by 39.6% to $336 million[9, 12] Revenue Breakdown and Growth - Underwriting revenue increased by 5.8% OCC[9, 16] - Claims revenue increased by 5.0% OCC[9, 16] - Subscription revenue grew by 8.7%[18] - Transactional revenue declined by 8.8%[18] Capital Allocation - $163 million was returned to shareholders through dividends and share repurchases[8] - $100 million of shares were repurchased in 3Q25[27] - A dividend of $0.45 per share was paid in 3Q25, totaling $63 million[27] Outlook - The updated total revenue outlook for 2025 is $3050 - $3080 million[24]