Crawford(CRD_B) - 2025 Q2 - Quarterly Results

Crawford & Company Q2 2025 Earnings Release Financial Highlights The company reported a 3% revenue increase to $323.0 million but a 9% decline in GAAP net income to $7.8 million Q2 & H1 2025 Consolidated Financial Results (GAAP) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $323.0M | $314.2M | 3% | $635.0M | $615.9M | 3% | | Net Income | $7.8M | $8.6M | (9)% | $14.5M | $11.4M | 27% | | Diluted EPS (CRD-A & CRD-B) | $0.16 | $0.17 | (6)% | $0.29 | $0.23 | 26% | Q2 & H1 2025 Consolidated Financial Results (Non-GAAP) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Consolidated Adjusted Operating Earnings | $22.0M | $22.1M | (0)% | $39.8M | $34.1M | 17% | | Consolidated Adjusted EBITDA | $31.4M | $30.6M | 3% | $58.3M | $51.2M | 14% | | Non-GAAP Net Income | $11.2M | $12.4M | (10)% | $21.5M | $18.9M | 14% | | Non-GAAP Diluted EPS (CRD-A & CRD-B) | $0.22 | $0.25 | (12)% | $0.43 | $0.38 | 13% | - The company increased its quarterly dividend to $0.075 per share, reflecting confidence in its margin trajectory[1][3] - Management noted that consolidated revenue growth was driven by three of the four operating segments, though lower claims frequency in U.S. property created some revenue pressure on North America Loss Adjusting and Platform Solutions[3] Segment Performance Three of four segments grew revenue, with International Operations showing strong margin expansion while Platform Solutions improved profitability despite lower sales North America Loss Adjusting The segment's revenue grew 2.7% to $78.1 million, but operating margin declined slightly due to higher administrative costs North America Loss Adjusting Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $78.1M | $76.0M | 2.7% | $157.8M | $153.4M | 2.9% | | Operating Earnings | $4.6M | $4.9M | (6.1)% | $10.1M | $9.4M | 7.4% | | Operating Margin | 5.9% | 6.4% | -50 bps | 6.4% | 6.1% | +30 bps | - Revenue growth was primarily driven by U.S. Global Technical Services[4] - The Q2 operating margin decline was attributed to decreased revenue in U.S. Field Operations and an increase in administrative costs[5] International Operations This segment delivered strong results with a 6.6% revenue increase and a significant operating margin expansion to 7.0% International Operations Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $109.1M | $102.3M | 6.6% | $213.5M | $200.4M | 6.5% | | Operating Earnings | $7.6M | $5.7M | 33.3% | $11.1M | $7.4M | 50.0% | | Operating Margin | 7.0% | 5.6% | +140 bps | 5.2% | 3.7% | +150 bps | - Revenue growth was driven by operations in the U.K., Europe, and Asia[8] Broadspire Broadspire achieved record quarterly revenue of $100.6 million, though its operating margin contracted due to higher costs Broadspire Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $100.6M | $97.1M | 3.6% | $197.0M | $191.4M | 2.9% | | Operating Earnings | $13.7M | $15.1M | (9.3)% | $25.9M | $27.9M | (7.2)% | | Operating Margin | 13.6% | 15.5% | -190 bps | 13.1% | 14.6% | -150 bps | - Q2 2025 revenues were a new quarterly record, driven by increases in medical case management and casualty claims revenues[12] - The operating margin was negatively impacted by an increase in administrative costs[13] Platform Solutions Despite a 9.2% revenue decline, the segment's operating margin more than doubled to 8.9% by exiting low-value services Platform Solutions Financials (Q2 & H1) | Metric | Q2 2025 | Q2 2024 | Change | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $35.2M | $38.8M | (9.2)% | $66.8M | $70.7M | (5.6)% | | Operating Earnings | $3.1M | $1.5M | 113.2% | $6.1M | $2.6M | 134.5% | | Operating Margin | 8.9% | 3.8% | +510 bps | 9.1% | 3.7% | +540 bps | - The significant improvement in operating earnings and margin was due to a reduction in low-value inspection services and a decrease in administrative costs[16][18] Corporate Costs, Balance Sheet, and Cash Flow Corporate costs rose due to a one-time tax expense, while the balance sheet showed a slight increase in cash and debt - Unallocated corporate costs in Q2 2025 increased mainly due to a one-time $3.1 million indirect tax expense and higher self-insurance reserves[19] - Selling, General, and Administrative (SG&A) expenses rose by 8.4% in Q2 2025, also primarily driven by the one-time $3.1 million indirect tax expense[21] Balance Sheet and Cash Flow Summary | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $58.5M | $55.4M | | Total Debt | $225.4M | $218.1M | | Metric (H1) | 2025 | 2024 | | Net Cash from Operations | $21.1M | ($8.3M) | - The company did not repurchase any shares of CRD-A or CRD-B during the first six months of 2025[27] Non-GAAP Reconciliations This section provides reconciliations for non-GAAP measures like operating earnings and adjusted EBITDA to their nearest GAAP equivalents - Operating earnings is the primary measure used by management to evaluate the financial performance of the company and its operating segments[30] Reconciliation of Consolidated Operating Earnings to Net Income (H1 2025) | (in thousands) | H1 2025 | | :--- | :--- | | Consolidated operating earnings | $39,840 | | Net corporate interest expense | ($7,802) | | Amortization of intangible assets | ($3,625) | | Non-service pension costs | ($4,687) | | Income tax provision | ($8,325) | | Other adjustments | ($875) | | Net income attributable to shareholders | $14,466 | Reconciliation of Net Income to Adjusted EBITDA (H1 2025) | (in thousands) | H1 2025 | | :--- | :--- | | Net income attributable to shareholders | $14,466 | | Depreciation and amortization | $19,461 | | Stock-based compensation | $3,085 | | Net corporate interest expense | $7,802 | | Non-service pension costs | $4,687 | | Income tax provision | $8,325 | | Contingent earnout adjustments | $443 | | Non-GAAP adjusted EBITDA | $58,269 | Reconciliation of GAAP to Non-GAAP EPS (Q2 2025) | (per share) | Q2 2025 | | :--- | :--- | | GAAP Diluted EPS | $0.16 | | Amortization of intangible assets | $0.03 | | Non-service related pension costs | $0.04 | | Contingent earnout adjustments | $0.00 | | Non-GAAP Adjusted Diluted EPS | $0.22 | Condensed Consolidated Financial Statements This section presents the company's unaudited condensed consolidated statements of operations, balance sheets, and cash flows - The Condensed Consolidated Statements of Operations show revenues, costs, and net income for the three and six months ended June 30, 2025 and 2024[44][46] - The Condensed Consolidated Balance Sheets present the company's assets, liabilities, and shareholders' investment as of June 30, 2025, compared to December 31, 2024[48] - The Condensed Consolidated Statements of Cash Flows detail the cash provided by or used in operating, investing, and financing activities for the six months ended June 30, 2025 and 2024[55]