Verisk Analytics (VRSK) Q1 2025 Earnings Call May 07, 2025 08:30 AM ET Speaker0 Good day, everyone, and welcome to the Verisk First Quarter twenty twenty five Earnings Results Conference Call. This call is being recorded. Currently, all participants are in a listen only mode. After today's prepared remarks, we will conduct a question and answer session where we will limit participants to one question so that we can allow everyone to ask a question. We will have further instructions for you at that time. For ...

Core Insights - Verisk Analytics reported quarterly earnings of $1.73 per share, exceeding the Zacks Consensus Estimate of $1.67 per share, and showing an increase from $1.63 per share a year ago, representing an earnings surprise of 3.59% [1] - The company achieved revenues of $753 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.40% and up from $704 million year-over-year [2] - Verisk has outperformed the S&P 500, gaining approximately 7.5% since the beginning of the year, while the S&P 500 has declined by 4.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.78, with expected revenues of $766.13 million, and for the current fiscal year, the EPS estimate is $7.01 on revenues of $3.07 billion [7] - The estimate revisions trend for Verisk is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Business - Information Services industry, to which Verisk belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Verisk's stock performance [5]

Financial Performance - The company reported Q1 2025 revenue of $753 million, a 7% increase year-over-year (YoY), or 7.9% on an organic constant currency (OCC) basis[9, 12] - Adjusted EBITDA for Q1 2025 was $417 million, up 9.5% (OCC), with an adjusted EBITDA margin of 55.3%, a 130 bps expansion[9, 12] - Diluted adjusted EPS increased by 6.1% to $1.73[9, 12] - Free cash flow grew by 23.3% to $391 million[9, 12] Revenue Breakdown - Subscription revenue grew by 10.6% (OCC) and represented 83% of total revenue[9, 18] - Transactional revenue declined by 4.0% (OCC) and accounted for 17% of total revenue[9, 18] - Underwriting revenue increased by 7.2% (OCC), while Claims revenue grew by 9.6% (OCC)[9, 16] - Domestic revenue accounted for 83% of total revenue, with international revenue making up the remaining 17%[9] Capital Allocation - The company returned $263 million to shareholders through dividends and share repurchases[8] - $200 million was used to repurchase shares in Q1 2025[8, 28] - A dividend of $0.45 per share was paid in Q1 2025, totaling $63 million[28] - Issued $700 million of 5.25% notes due in 2035 and retired $500 million of 4.0% senior notes[28] 2025 Outlook - The company reiterated its 2025 guidance, projecting total revenue between $3.03 billion and $3.08 billion, representing OCC growth of 6% to 8%[8, 24] - Adjusted EBITDA is expected to be between $1.67 billion and $1.72 billion, with an adjusted EBITDA margin of 55% to 55.8%[24] - Diluted adjusted EPS is projected to be between $6.80 and $7.10[24]

For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 mo ...

Exhibit 99.1 Verisk Reports First-Quarter 2025 Financial Results JERSEY CITY, N.J., May 7, 2025 — Verisk (Nasdaq: VRSK), a leading global data analytics and technology provider, today announced results for the first quarter ended March 31, 2025. The earnings release is available on the company's Investor Relations website at investor.verisk.com. Lee Shavel, President and CEO, Verisk: "I am pleased to share that 2025 is off to a solid start at Verisk as we delivered broad-based top line growth across underwr ...

Core Insights - Verisk reported strong financial results for Q1 2025, with a revenue increase of 7.0% year-over-year, reaching $753 million, and organic constant currency revenue growth of 7.9% [5][8][16] - The company achieved a net income of $232 million, reflecting a 5.9% increase compared to the previous year, and an adjusted EBITDA of $417 million, up 9.5% [3][10][17] - Verisk returned over $250 million to shareholders through dividends and share repurchases, demonstrating confidence in its business model and financial strength [3][23] Financial Performance - Revenues for Q1 2025 were $753 million, up from $704 million in Q1 2024, marking a 7.0% increase [5][8] - Net income increased to $232 million from $219 million, a rise of 5.9% [10][40] - Adjusted EBITDA reached $417 million, up 9.5% from $380 million in the same quarter last year [10][11] - Diluted EPS attributable to Verisk was $1.65, an increase of 8.6% from $1.52 [13][40] - Free cash flow grew by 23.3% to $391 million, compared to $317 million in Q1 2024 [15][56] Segment Performance - Underwriting revenues increased by 6.8% to $532 million, with organic constant currency growth of 7.2% [7][16] - Claims revenues grew by 7.5% to $221 million, with organic constant currency growth of 9.6% [7][16] Shareholder Returns - The company returned over $250 million to shareholders through dividends and share repurchases [3][23] - The dividend per share was increased to $0.45, up 15.4% from $0.39 [5][15] 2025 Financial Guidance - Verisk reiterated its financial guidance for 2025, projecting total revenue between $3.03 billion and $3.08 billion, and adjusted EBITDA between $1.67 billion and $1.72 billion [18]

Core Viewpoint - Verisk (VRSK) is set to release its Q1 fiscal 2025 results on May 7, with expectations of revenue growth and earnings increase compared to the previous year [1][2][4]. Revenue Expectations - The Zacks Consensus Estimate for Verisk's revenues is $745 million, reflecting a 6.5% increase from the same quarter last year [2]. - Revenue estimates from the United States are projected at $612.4 million, indicating a year-over-year growth of 5.4% [3]. - Expected revenues from the U.K. are $55.7 million, showing a 7.3% increase from the prior year [3]. - Revenues from other countries are estimated to rise by 13.5% to $80.6 million [3]. Earnings Expectations - The consensus estimate for earnings per share is $1.67, suggesting a 2.5% growth from the previous year's figure [4]. - Strong margin expansion is anticipated to contribute positively to the bottom line [4]. Earnings Prediction Model - The current model indicates that Verisk may not achieve an earnings beat this quarter, with an Earnings ESP of -2.34% and a Zacks Rank of 4 (Sell) [5].

Core Insights - The insurance industry has faced over USD 10 billion in insured losses from strikes, riots, and civil commotion (SRCC) since 2010, significantly higher than the less than USD 1 billion attributed to terrorism [1][2] - Verisk has introduced the first catastrophe model specifically for SRCC events in the U.S. to help insurers quantify financial impacts and enhance risk management strategies [1][4] Group 1: Financial Impact of SRCC Events - Since 2010, global insured losses from SRCC events exceed USD 10 billion, while terrorism-related losses are below USD 1 billion [2] - In the last six years, five SRCC events have each caused over USD 1 billion in global insured losses [2] - The U.S. has experienced approximately USD 3 billion in insured losses from SRCC events [2] Group 2: Verisk's SRCC Model - The SRCC Model features a 500,000-year stochastic catalog that assesses the frequency and severity of unrest across every ZIP Code in the U.S. [3] - The model evaluates key risk drivers, including social and economic trends, political factors, and historical protest patterns [3] - It aims to provide enhanced insights for exposure management and catastrophe modeling, moving beyond traditional historical data [3] Group 3: Underwriting and Risk Management - Verisk's SRCC Model is designed to empower insurers to improve underwriting strategies and make informed decisions regarding pricing, capital allocation, and risk management [4] - The model combines nearly 40 years of catastrophe modeling expertise with over 15 years of experience in quantifying political violence [4] - It allows insurers to estimate potential insured losses, create robust underwriting guidelines, and assess tail risk through plausible extreme scenarios [6]

Core Insights - The GearTrack April Cargo Security Index indicates a significant rise in cargo theft incidents in the U.S., with 54% occurring in California, Florida, and Texas in March 2025 [1][7] - California experienced a 34% month-over-month increase in cargo theft incidents, while Texas and Florida saw increases of 17% [1][7] - Food and beverage items were among the most targeted goods, highlighted by a thwarted theft of $55,000 worth of beef in Philadelphia [1][7] Industry Trends - Organized theft groups are employing innovative schemes, including non-delivery of loads and document forgery for fraudulent pick-ups [2] - Shippers are advised to enhance route planning to ensure the safe delivery of valuable goods, particularly in sectors like food and beverage, apparel, household goods, metals, and vehicles [2] Cargo Security Index Overview - The Cargo Security Index is a collaboration between GearTrack and CargoNet, providing insights into cargo theft trends, high-risk routes, and organized theft activity [3] - The Index aims to equip shippers, logistics providers, and insurers with intelligence to counter increasingly sophisticated threats [3] Response to Rising Theft - The surge in cargo theft is attributed to economic pressures, tariff uncertainty, and increased shipment volumes [4] - GearTrack plans to integrate Verisk CargoNet's RouteScore API to offer route-specific intelligence and customized protection recommendations [4] Company Background - GearTrack is an IoT-powered supply chain solution that tracks and protects high-value assets in real-time, helping companies reduce downtime and ensure timely deliveries [5] - Verisk is a strategic data analytics partner for the global insurance industry, focusing on improving operational efficiency and combating fraud [6]

Core Viewpoint - Verisk is set to report its financial results for the fiscal first quarter ended March 31, 2025, on May 7, 2025, before market opening [1] Group 1: Financial Reporting - The financial results will be available on the Verisk investor website [1] - A live audio webcast will be hosted by Verisk's management team on May 7 at 8:30 a.m. ET to discuss the results and business highlights [2] - A replay of the webcast will be accessible for 30 days on the investor website [3] Group 2: Company Overview - Verisk is a leading strategic data analytics and technology partner to the global insurance industry [4] - The company focuses on enhancing operating efficiency, improving underwriting and claims outcomes, combating fraud, and making informed decisions regarding global risks [4] - Verisk operates in over 20 countries and is recognized for fostering an inclusive culture [4]