Crawford(CRD_A) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Crawford & Company's Q2 2025 earnings report details a 3% revenue increase to $323.0 million, alongside a 9% decrease in GAAP net income to $7.8 million, and a dividend increase to $0.075 per share Financial Highlights Crawford & Company reported a 3% increase in revenues before reimbursements to $323.0 million for the second quarter of 2025, though GAAP net income decreased by 9% to $7.8 million and diluted EPS fell by 6% to $0.16, while the company increased its quarterly dividend to $0.075 per share Q2 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $323.0M | $314.2M | 3% | | Net income attributable to shareholders | $7.8M | $8.6M | (9)% | | Diluted EPS (CRD-A & CRD-B) | $0.16 | $0.17 | (6)% | | Non-GAAP Net income | $11.2M | $12.4M | (10)% | | Non-GAAP Diluted EPS (CRD-A & CRD-B) | $0.22 | $0.25 | (12)% | - The company increased its quarterly dividend to $0.075 per share, reflecting confidence in its margin trajectory[1][3] Management Commentary CEO Rohit Verma expressed satisfaction with the company's progress, highlighting consolidated revenue growth across three of the four operating segments, despite lower claims frequency in U.S. property impacting certain businesses, while maintaining a strong balance sheet and preparing for potential severe weather activity - Consolidated revenue growth was driven by three of the four operating segments[3] - Lower claims frequency in U.S. property created revenue pressure on North America Loss Adjusting and Platform Solutions[3] - The company is prepared for the severe weather season in the U.S. and is focused on winning new business globally[4] Segment Performance Analysis In Q2 2025, International Operations and Broadspire led revenue growth at 6.6% and 3.6% respectively, with International Operations also showing significant margin expansion, while North America Loss Adjusting saw modest revenue growth but a decline in operating margin, and Platform Solutions experienced a 9.2% revenue decrease, though its operating margin improved substantially due to a shift away from low-value services North America Loss Adjusting This segment's revenue grew 2.7% to $78.1 million in Q2 2025, driven by U.S. Global Technical Services, but the operating margin decreased from 6.4% to 5.9% due to lower revenue in U.S. Field Operations and higher administrative costs Q2 North America Loss Adjusting Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $78.1M | $76.0M | 2.7% | | Operating Earnings | $4.6M | $4.9M | (6.1)% | | Operating Margin | 5.9% | 6.4% | -50 bps | - For the first six months of 2025, revenues increased 2.9% to $157.8 million, and the operating margin improved to 6.4% from 6.1% in the prior year period[6][7] International Operations International Operations delivered strong performance with a 6.6% revenue increase to $109.1 million in Q2 2025, driven by growth in the U.K., Europe, and Asia, with the operating margin expanding significantly to 7.0% from 5.6% in the prior-year quarter Q2 International Operations Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $109.1M | $102.3M | 6.6% | | Operating Earnings | $7.6M | $5.7M | 33.3% | | Operating Margin | 7.0% | 5.6% | +140 bps | - For the first six months of 2025, revenues grew 6.5% to $213.5 million, with the operating margin increasing to 5.2% from 3.7% year-over-year[10][11] Broadspire The Broadspire segment achieved a record quarterly revenue of $100.6 million, a 3.6% increase from Q2 2024, fueled by growth in medical case management and casualty claims, though the operating margin declined to 13.6% from 15.5% due to higher administrative costs Q2 Broadspire Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $100.6M | $97.1M | 3.6% | | Operating Earnings | $13.7M | $15.1M | (9.3)% | | Operating Margin | 13.6% | 15.5% | -190 bps | - For the first six months of 2025, revenues increased 2.9% to $197.0 million, while the operating margin decreased to 13.1% from 14.6% in the prior year period[13][14] Platform Solutions Platform Solutions reported a 9.2% decrease in revenue to $35.2 million for Q2 2025, but operating earnings more than doubled to $3.1 million, and the operating margin surged to 8.9% from 3.8%, benefiting from the reduction of low-value inspection services and lower administrative costs Q2 Platform Solutions Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $35.2M | $38.8M | (9.2)% | | Operating Earnings | $3.1M | $1.5M | 113.2% | | Operating Margin | 8.9% | 3.8% | +510 bps | - For the first six months of 2025, revenues were down 5.6% to $66.8 million, but the operating margin improved significantly to 9.1% from 3.7% in the 2024 period[17][18] Corporate and Other Financial Items Unallocated corporate costs increased to $7.0 million in Q2 2025, primarily due to a one-time $3.1 million indirect tax expense, which also drove an 8.4% increase in SG&A, while the company's cash position improved slightly to $58.5 million, total debt rose to $225.4 million, and operating cash flow for the first half of 2025 showed a significant positive swing - Unallocated corporate costs rose to $7.0 million in Q2 2025 from $5.1 million in Q2 2024, mainly due to a one-time $3.1 million indirect tax expense[19] - Selling, general, and administrative (SG&A) expenses increased by 8.4% in Q2 2025, also primarily driven by the one-time indirect tax expense[21] Balance Sheet Summary | Balance Sheet Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $58.5M | $55.4M | | Total Debt Outstanding | $225.4M | $218.1M | - Cash provided by operations was $21.1 million in the first half of 2025, a significant improvement from an $8.3 million use of cash in the same period of 2024[25] - The company did not repurchase any shares in the first six months of 2025[27] Non-GAAP Presentation and Reconciliations The company provides several non-GAAP financial measures, including Operating Earnings, Adjusted EBITDA, and results on a constant dollar basis, to offer a clearer view of its operational performance, with detailed reconciliation tables bridging these non-GAAP figures back to their nearest GAAP equivalents - Operating earnings is the primary measure used by management to evaluate financial performance and excludes items like net corporate interest expense, stock option expense, amortization, and income taxes[30] - Adjusted EBITDA is defined as net income adjusted for depreciation and amortization, net corporate interest expense, contingent earnout adjustments, non-service pension costs, income taxes, and stock-based compensation[31] - The report provides detailed reconciliations for consolidated operating earnings to net income, net income to adjusted EBITDA, and GAAP EPS to non-GAAP adjusted EPS[35][36][37] Financial Statements The unaudited condensed consolidated financial statements provide detailed financial data for the three and six months ended June 30, 2025, compared to the same periods in 2024, including the Statements of Operations, Balance Sheets, and Statements of Cash Flows - The Condensed Consolidated Statements of Operations show detailed revenue, costs, and net income for the three and six-month periods[44][46] - The Condensed Consolidated Balance Sheets present the company's financial position as of June 30, 2025, compared to December 31, 2024[48] - The Condensed Consolidated Statements of Cash Flows detail the cash movements from operating, investing, and financing activities for the first six months of 2025 and 2024[55]