Verisk(VRSK) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, covering balance sheets, operations, cash flows, and notes on significant accounting policies and subsequent events Condensed Consolidated Balance Sheets | Balance Sheet Item | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $628.7 | $291.2 | | Total current assets | $1,377.4 | $911.6 | | Goodwill | $1,809.4 | $1,726.6 | | Total assets | $4,794.9 | $4,264.7 | | Liabilities & Equity | | | | Long-term debt | $3,233.2 | $2,546.9 | | Total liabilities | $4,482.3 | $4,159.7 | | Total stockholders' equity | $312.6 | $105.0 | - Total assets increased to approximately $4.8 billion as of June 30, 2025, from $4.3 billion at year-end 2024, primarily driven by a significant increase in cash and cash equivalents and goodwill[10] - Total liabilities rose to nearly $4.5 billion, largely due to an increase in long-term debt, which grew from $2.5 billion to $3.2 billion[10] Condensed Consolidated Statements of Operations | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | H1 2025 (in millions) | H1 2024 (in millions) | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $772.6 | $716.8 | +7.8% | $1,525.6 | $1,420.8 | +7.4% | | Operating income | $354.3 | $318.7 | +11.2% | $684.4 | $626.1 | +9.3% | | Net income attributable to Verisk | $253.3 | $308.1 | -17.8% | $485.6 | $527.7 | -8.0% | | Diluted EPS attributable to Verisk | $1.81 | $2.15 | -15.8% | $3.45 | $3.67 | -6.0% | - Revenues and operating income grew year-over-year for both the three and six-month periods, however, net income and EPS declined significantly due to a large investment gain of $99.8 million in Q2 2024 that was not repeated in 2025[11] Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (Six Months Ended June 30) | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $689.2 | $592.4 | | Net cash (used in) provided by investing activities | $(138.4) | $(23.8) | | Net cash (used in) provided by financing activities | $(225.7) | $(236.9) | | Net increase in cash and cash equivalents | $337.5 | $329.4 | - Cash from operations increased by $96.8 million for the first six months of 2025 compared to the prior year, driven by higher operating profit and a federal tax refund[19][146] - Financing activities for the first half of 2025 included proceeds from new debt ($698.3 million), repayment of debt ($500.0 million), stock repurchases ($300.1 million), and dividend payments ($126.0 million)[19][150] Notes to Condensed Consolidated Financial Statements - On April 2, 2025, the company acquired Simplitium Limited for a cash purchase price of $19.7 million, which resulted in $11.9 million of goodwill[38][39] - In March 2025, the company issued $700.0 million of 5.250% senior notes due 2035, with a portion of the proceeds used in April 2025 to repay $500.0 million of 4.000% senior notes due 2025[49] - The company is involved in several legal proceedings, including class actions related to telematics data, for which it is not possible to reasonably estimate liability at this stage[83][84] - Subsequent to the quarter's end, the company completed the acquisition of SuranceBay for $162.5 million and entered into a definitive agreement to acquire AccuLynx for $2.35 billion in cash[89][90] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial results, highlighting revenue growth driven by Underwriting and Claims, while explaining the decline in net income and EBITDA margin due to a non-recurring investment gain in the prior year, alongside strong liquidity and capital structure modifications Results of Operations Revenue by Category (Q2 2025 vs Q2 2024) | Category | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :--- | :--- | :--- | :--- | | Underwriting | $549.6 | $507.5 | +8.3% | | Claims | $223.0 | $209.3 | +6.6% | | Total Insurance | $772.6 | $716.8 | +7.8% | Revenue by Category (H1 2025 vs H1 2024) | Category | H1 2025 (in millions) | H1 2024 (in millions) | YoY Change | | :--- | :--- | :--- | :--- | | Underwriting | $1,081.6 | $1,005.9 | +7.5% | | Claims | $444.0 | $414.9 | +7.0% | | Total Insurance | $1,525.6 | $1,420.8 | +7.4% | - The decrease in Net Income and EBITDA margin for both the three and six-month periods was primarily driven by net gains realized in the prior year from the settlement of retained interests related to past business divestitures, which did not recur in 2025[122][123][135] - Operating expenses increased at a slower rate than revenues for Q2 2025 (5.1% vs 7.8%), leading to an 11.2% increase in operating income[108] Liquidity and Capital Resources - The company generated significant cash flow from operations, totaling $689.2 million for the first six months of 2025, an increase of 16.3% from the prior year[144][146] - During the first six months of 2025, the company used cash for $300.1 million in share repurchases and $126.0 million in dividend payments[141] - Total debt increased to $3.25 billion at June 30, 2025, from $3.05 billion at year-end 2024, with $995.4 million available under its $1 billion syndicated revolving credit facility[142][143] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risks since the disclosures made in its Annual Report on Form 10-K for the year ended December 31, 2024 - Market risks as of June 30, 2025, have not materially changed from those discussed in the company's 2024 Form 10-K filed on February 26, 2025[154] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the period - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[156] - There were no changes in the company's internal control over financial reporting during the six months ended June 30, 2025, that have materially affected or are likely to materially affect it[157] PART II — OTHER INFORMATION Item 1. Legal Proceedings This section cross-references Note 15 of the financial statements, detailing the company's involvement in various legal proceedings in the ordinary course of business - The company is party to various legal proceedings in the ordinary course of business, with further details provided in Note 15 of the condensed consolidated financial statements[159] Item 1A. Risk Factors The company reports no material changes to the risk factors disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There has been no material change in the risk factors from those disclosed in the Annual Report on Form 10-K filed on February 26, 2025[160] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company confirms no unregistered sales of equity securities during the quarter, detailing share repurchase activities including an additional $1.0 billion authorization and $1,291.5 million remaining available - The company did not have any unregistered sales of equity securities during the reported period[161] - In February 2025, the Board of Directors approved an additional $1.0 billion for share repurchases, with $1,291.5 million remaining available for future repurchases as of June 30, 2025[162] - During the quarter, the company repurchased 446,779 shares through the settlement of two Accelerated Share Repurchase (ASR) agreements[162] Item 3. Defaults Upon Senior Securities The company reports no defaults upon its senior securities during the period - None[163] Item 4. Mine Safety Disclosures The company indicates no mine safety disclosures to report - None[164] Item 5. Other Information The company states that no Section 16 officers or directors adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025 - During the quarter ended June 30, 2025, no Section 16 officers or directors adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[165] Item 6. Exhibits This section directs the reader to the Exhibit Index for a comprehensive list of all documents filed as part of the Form 10-Q - Refers to the Exhibit Index for a list of filed documents, including certifications and XBRL data[166][168]