Group 1 - The core viewpoint is that Verisk Analytics (NASDAQ: VRSK) has been assigned a Sell rating due to its business growth being primarily driven by an increase in insurance premiums [1] - The acquisition of AccuLynx is expected to enhance Verisk Analytics' data analytics capabilities, indicating a strategic move to strengthen its market position [1]

Core Insights - Verisk (VRSK) reported strong second-quarter fiscal 2025 results, with earnings and revenues exceeding the Zacks Consensus Estimate [1] - Adjusted earnings per share were $1.88, surpassing estimates by 6.2% and increasing 8.1% year-over-year [1] - Total revenues reached $772.6 million, slightly above consensus and up 7.8% year-over-year [1] Financial Performance - Underwriting and Rating revenues grew 8.3% year-over-year to $550 million, exceeding the estimate of $538.5 million [3] - Claim revenues increased 6.6% year-over-year to $223 million, falling short of the estimate of $228.5 million [3] - Adjusted EBITDA rose 11.9% year-over-year to $445 million, surpassing the estimate of $427.4 million, with an adjusted EBITDA margin of 57.6% [4] Cash Flow and Shareholder Returns - The company reported net cash utilized from operating activities of $244.5 million and free cash flow usage of $188.7 million [5] - Share repurchases amounted to $100 million, and dividends returned to shareholders totaled $63 million [5] 2025 Guidance - Verisk raised its revenue guidance for fiscal 2025 to a range of $3.09-$3.12 billion, above the previous range of $3.03-$3.08 billion and higher than the Zacks Consensus Estimate of $3.08 billion [6] - Adjusted EBITDA forecast was increased to $1.70-$1.74 billion from $1.67-$1.72 billion [6] - Adjusted earnings per share guidance was slightly lowered to $6.80-$7.00 from $6.80-$7.10, below the consensus mark of $7.05 [7]

Financial Data and Key Metrics Changes - In Q2 2025, consolidated revenue was $773 million, reflecting a 7.8% increase year-over-year, driven by strong growth in underwriting and claims [21] - Net income decreased by 18% to $253 million, and diluted GAAP earnings per share fell by 16% to $1.81, primarily due to a prior year gain related to disposed businesses [21][28] - Organic constant currency revenue growth was 7.9%, with adjusted EBITDA growth of 9.7% and total adjusted EBITDA margins at 57.6%, up 220 basis points from the prior year [8][26] Business Line Data and Key Metrics Changes - Underwriting revenues grew by 7.7%, while claims revenues increased by 8.3% [23] - Subscription revenues, which accounted for 82% of total revenue, grew by 9.3% on an organic constant currency basis, driven by strong performance in forms, rules, loss costs, Extreme Event Solutions, and Anti-Fraud [23] - Transactional revenues, comprising 18% of total revenues, returned to growth at 1.8%, supported by international business strength [24] Market Data and Key Metrics Changes - The Extreme Events business saw strong revenue growth from securitization, with record issuance volumes [25] - The auto business experienced softness due to tough comparisons from the previous year and competitive pressures [25] - Federal government spending cuts are expected to impact revenue starting in Q3, although these contracts represent less than 1% of total revenue [24] Company Strategy and Development Direction - The company is focused on becoming a data analytics specialist and integrated technology network for the global insurance industry, emphasizing innovation and advanced technologies [10] - Recent acquisitions of AccuLinks and AssuranceBay are aimed at enhancing the company's service offerings and expanding its market presence [10][30] - The company plans to invest in integrating these acquisitions to drive long-term revenue growth and maximize synergies [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance, raising revenue and adjusted EBITDA outlook for 2025 due to strong first-half results and the impact of acquisitions [9][33] - The company anticipates challenges in the second half of the year due to strong prior year comparisons and known factors affecting certain business lines [50] - Management remains optimistic about the core business's strength and the potential for continued growth despite external pressures [50] Other Important Information - The company announced a definitive agreement to acquire AccuLinks for $2.35 billion, which is expected to enhance its Property Estimating Solutions business [10] - The acquisition is anticipated to be accretive to earnings by the end of 2026, with expected revenue contributions of $40 million to $50 million from acquisitions this year [30][33] - The company is committed to returning capital to shareholders, having increased its dividend by 15% and completed a $100 million share repurchase program [29] Q&A Session Summary Question: Can you discuss the AccuLinks deal and anticipated revenue and cost synergies? - Management highlighted the strategic importance of the AccuLinks merger, emphasizing customer overlap and synergy opportunities between the two businesses [39][41] - Cost synergies are not the primary focus, as AccuLinks has attractive margins, but there are revenue opportunities to pursue post-acquisition [44] Question: Is the revenue outlook softer than before? - Management acknowledged the strong first half but noted challenges in the second half due to tough comparisons and known factors affecting certain business lines [48][50] Question: What competitive pressures are being faced in the auto business? - Management indicated that a large competitor poses challenges, but they continue to find ways to innovate and provide value to clients [55] Question: Will there be more focus on SaaS platforms in the future? - Management confirmed that connectivity and integration of SaaS platforms are key strategic priorities moving forward [60][64] Question: What is the growth potential for AccuLinks in its core market? - Management noted that AccuLinks has a significant total addressable market and is well-positioned for continued growth due to its specialized offerings [68][70] Question: How will the company manage leverage while continuing share repurchases? - Management explained that they will balance debt repayment with share repurchase activities, leveraging strong free cash flow to manage both [91] Question: How does AccuLinks differentiate itself in the competitive landscape? - Management identified AccuLinks' specialization in roofing as a key differentiator compared to broader contractor SaaS providers [93]

Financial Data and Key Metrics Changes - In the second quarter of 2025, consolidated revenue was $773 million, reflecting a 7.8% increase year-over-year, driven by strong growth in underwriting and claims [19] - Net income decreased by 18% to $253 million, and diluted GAAP earnings per share were $1.81, down 16% year-over-year, primarily due to a prior year gain related to disposed businesses [19][26] - Organic constant currency revenue growth was 7.9%, with adjusted EBITDA growth of 9.7% and total adjusted EBITDA margins at 57.6%, up 220 basis points from the prior year [6][24] Business Line Data and Key Metrics Changes - Underwriting revenues grew by 7.7%, while claims revenues increased by 8.3% on an organic constant currency basis [20] - Subscription revenues, which comprised 82% of total revenue, grew by 9.3%, driven by strong performance in forms, rules, loss costs, Extreme Event Solutions, and Anti-Fraud [20] - Transactional revenues, accounting for 18% of total revenues, returned to growth with a modest increase of 1.8% [21] Market Data and Key Metrics Changes - The Extreme Events business saw strong revenue growth from securitization, with record issuance volumes [22] - The company experienced softness in the auto business due to tough comparisons from the previous year and competitive pressures [22] - Weakness in the sustainability business was noted due to market conditions [22] Company Strategy and Development Direction - The company is focused on becoming a data analytics specialist and integrated technology network for the global insurance industry, emphasizing innovation and advanced technologies [7][8] - The acquisition of AccuLinks for $2.35 billion is expected to enhance the company's property estimating solutions and create synergies through improved connectivity between insurers and contractors [9][10] - The company aims to maintain capital allocation discipline while investing in high-return opportunities and returning excess capital to shareholders [8][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance, raising revenue and adjusted EBITDA outlook for 2025 due to strong first-half results and the impact of acquisitions [7][31] - The company anticipates challenges in the second half of the year due to strong comparisons from 2024 and federal government spending cuts, although these contracts represent less than 1% of total revenue [21][46] - Management highlighted ongoing competitive pressures in the auto business and the need to adapt to changing market conditions [22][53] Other Important Information - The company announced a cash dividend of $0.45 per share, a 15% increase from the prior year, and completed a $100 million accelerated share repurchase program [27] - The company is committed to returning capital to shareholders while managing leverage, which is expected to temporarily increase due to the acquisition financing [29][87] Q&A Session Summary Question: Can you discuss the AccuLinks deal and its impact on revenue and cost synergies? - Management highlighted the strategic importance of the AccuLinks merger, emphasizing the overlap with existing customers and the potential for revenue synergies through enhanced connectivity [38][40] Question: Is the revenue guidance softer than before? - Management acknowledged the strong results in the first half but noted challenges in the second half due to tough comparisons and competitive pressures, maintaining a balanced outlook [44][46] Question: What competitive pressures are being faced in the auto business? - Management identified a large competitor in the auto space and acknowledged the need to find innovative solutions to maintain competitiveness [53] Question: Will the acquisition of AccuLinks change the growth outlook? - Management indicated that while AccuLinks is expected to be additive to growth, the overall impact on the 6% to 8% organic growth target will be assessed as the integration unfolds [95] Question: How does the company plan to manage leverage while repurchasing shares? - Management explained that they will raise debt for the acquisition but will also maintain share repurchase activity, balancing debt paydown with capital returns [87]

Core Insights - Verisk Analytics (VRSK) reported quarterly earnings of $1.88 per share, exceeding the Zacks Consensus Estimate of $1.77 per share, and up from $1.74 per share a year ago, representing an earnings surprise of +6.21% [1] - The company achieved revenues of $772.6 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.54% and increasing from $716.8 million year-over-year [2] - Verisk has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise of +6.21% for the recent quarter follows a previous surprise of +3.59% when actual earnings were $1.73 compared to an expected $1.67 [1][2] - The current consensus EPS estimate for the upcoming quarter is $1.77, with projected revenues of $773.4 million, while the fiscal year estimate is $7.05 on $3.08 billion in revenues [7] Stock Performance and Outlook - Verisk shares have increased approximately 6.8% year-to-date, compared to an 8.3% gain for the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] - The outlook for the stock's price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] Industry Context - The Business - Information Services industry, to which Verisk belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable environment for performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Verisk reported revenue of $773 million, a 7.8% year-over-year increase[12] - Adjusted EBITDA reached $445 million, up 11.9% year-over-year[12] - Adjusted EBITDA margin expanded by 220 basis points to 57.6%[9, 12] - Diluted Adjusted EPS increased by 8.0% to $1.88[9, 12] - Free cash flow grew by 22.6% to $189 million[9, 12] Revenue Breakdown - Underwriting revenue increased by 7.7% organically[9] - Claims revenue increased by 8.3% organically[9] - Subscription revenue grew by 9.3% organically, accounting for 81% of total revenue[9, 18] - Transactional revenue grew by 1.8% organically, accounting for 17% of total revenue[9, 18] Capital Allocation - Verisk returned $163 million to shareholders through dividends and share repurchases[8] - The company repurchased $100 million of shares in 2Q25[28] - A dividend of $0.45 per share was paid in 2Q25, totaling $63 million[28] Acquisitions and Outlook - Verisk closed the acquisition of SuranceBay for $163 million[8, 28] - Verisk signed an agreement to acquire AccuLynx for $2.35 billion[8, 28] - The company increased its revenue outlook for 2025 to $3.09 billion - $3.13 billion[8, 24]

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) 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](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | 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](index=10&type=chunk) - 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](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | 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](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | 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](index=19&type=chunk)[146](index=146&type=chunk) - 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](index=19&type=chunk)[150](index=150&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - 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](index=38&type=chunk)[39](index=39&type=chunk) - 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](index=49&type=chunk) - 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](index=83&type=chunk)[84](index=84&type=chunk) - 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](index=89&type=chunk)[90](index=90&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) 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](index=37&type=section&id=Results%20of%20Operations) 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](index=122&type=chunk)[123](index=123&type=chunk)[135](index=135&type=chunk) - 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](index=108&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) - 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](index=144&type=chunk)[146](index=146&type=chunk) - 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](index=141&type=chunk) - 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](index=142&type=chunk)[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) 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](index=154&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) 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](index=156&type=chunk) - 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](index=157&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) 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](index=159&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) 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](index=160&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) 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](index=161&type=chunk) - 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](index=162&type=chunk) - During the quarter, the company repurchased **446,779** shares through the settlement of two Accelerated Share Repurchase (ASR) agreements[162](index=162&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities during the period - None[163](index=163&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company indicates no mine safety disclosures to report - None[164](index=164&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) 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](index=165&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) 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](index=166&type=chunk)[168](index=168&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Verisk reported strong Q2 2025 results with revenue at **$773 million** and adjusted EBITDA at **$445 million**, raising full-year guidance and advancing strategic acquisitions Q2 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $773M | $717M | +7.8% | | Net Income | $253M | $308M | -17.7% | | Adjusted EBITDA | $445M | $397M | +11.9% | | Diluted EPS | $1.81 | $2.15 | -15.8% | | Diluted Adjusted EPS | $1.88 | $1.74 | +8.0% | - CEO Lee Shavel highlighted the company's evolution from a data analytics specialist to an integrated technology network, reinforced by the strategic acquisitions of SuranceBay and AccuLynx[3](index=3&type=chunk) - CFO Elizabeth Mann emphasized strong operating momentum, with **7.9% OCC revenue growth** and **9.7% OCC adjusted EBITDA growth**, driven by solid operating leverage. The company continues to invest in core operations and strategic acquisitions while returning capital to shareholders[4](index=4&type=chunk) - Verisk announced the acquisition of SuranceBay for **$163 million** and a definitive agreement to acquire AccuLynx for **$2.35 billion**, significantly expanding its capabilities in the insurance ecosystem[7](index=7&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) This section details Verisk's Q2 2025 financial performance, analyzing revenue, profitability, earnings per share, and cash flow [Revenue Analysis](index=3&type=section&id=Revenue) Total revenue increased **7.8%** to **$773 million** in Q2 2025, driven by growth in both Underwriting and Claims segments of the Insurance business Revenue by Segment (in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | Reported Change | OCC Change | | :--- | :--- | :--- | :--- | :--- | | Underwriting | $550 | $508 | 8.3% | 7.7% | | Claims | $223 | $209 | 6.6% | 8.3% | | **Total Insurance** | **$773** | **$717** | **7.8%** | **7.9%** | - Growth in Underwriting revenue was primarily driven by forms, rules, loss cost services, and extreme event solutions[13](index=13&type=chunk) - Claims revenue growth was mainly attributed to strong performance in property estimating solutions and anti-fraud solutions[13](index=13&type=chunk) [Profitability Analysis](index=3&type=section&id=Net%20Income%2C%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) Net income decreased to **$253 million** due to prior-year gains, while Adjusted EBITDA grew **11.9%** to **$445 million**, expanding the margin to **57.6%** - The **17.7% decrease** in quarterly net income was primarily the result of net gains recognized in the prior year period from the sales of healthcare and specialized market businesses and the early extinguishment of debt[11](index=11&type=chunk) Adjusted EBITDA Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Reported Change | OCC Change | | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $445 | $397 | 11.9% | 9.7% | | Adjusted EBITDA Margin | 57.6% | 55.4% | +220 bps | N/A | - The **9.7% OCC growth** in Adjusted EBITDA was driven by operating leverage on solid revenue growth and effective cost discipline[14](index=14&type=chunk) [Earnings Per Share (EPS)](index=5&type=section&id=Diluted%20Earnings%20Per%20Share) Diluted GAAP EPS decreased to **$1.81** due to prior-year gains, while Diluted Adjusted EPS increased **8.0%** to **$1.88** from strong operational performance Diluted EPS Comparison | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Diluted GAAP EPS | $1.81 | $2.15 | -15.8% | | Diluted Adjusted EPS | $1.88 | $1.74 | +8.0% | - The decrease in diluted GAAP EPS was primarily due to net gains in the prior-year period from business sales and early debt extinguishment[19](index=19&type=chunk) - Diluted adjusted EPS increased **8.0%**, reflecting strong operational performance and a lower average share count, partially offset by higher interest and depreciation expenses[19](index=19&type=chunk) [Cash Flow and Capital Return](index=5&type=section&id=Cash%20Flow%20and%20Capital%20Return) Net cash from operating activities grew **15.5%** to **$245 million** and free cash flow increased **22.6%** to **$189 million**, alongside continued capital returns Q2 2025 Cash Flow (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $244.5 | $211.7 | +15.5% | | Capital expenditures | ($55.8) | ($57.8) | -3.5% | | Free cash flow | $188.7 | $153.9 | +22.6% | - During Q2, the company completed a **$100 million** Accelerated Share Repurchase program, buying back **0.3 million shares**. **$1.3 billion** remains authorized for future repurchases[20](index=20&type=chunk) - A cash dividend of **$0.45 per share** was paid on June 30, 2025. The Board approved another **$0.45 per share** dividend payable on September 30, 2025[20](index=20&type=chunk) [Business Outlook and Strategic Developments](index=6&type=section&id=Business%20Outlook%20and%20Strategic%20Developments) This section outlines Verisk's updated full-year 2025 guidance and details recent strategic acquisitions that expand its market capabilities [Full Year 2025 Outlook](index=6&type=section&id=Full%20Year%202025%20Outlook) Verisk raised its full-year 2025 guidance for total revenue to **$3.09B - $3.13B** and adjusted EBITDA to **$1.70B - $1.74B**, while narrowing adjusted EPS Updated Full Year 2025 Guidance (in millions, except per share amounts) | Metric | Original Guidance | Updated Guidance | | :--- | :--- | :--- | | Total revenue | $3,030 - $3,080M | **$3,090 – $3,130M** | | Adjusted EBITDA | $1,670 - $1,720M | **$1,700 – $1,740M** | | Diluted adjusted EPS | $6.80 – $7.10 | **$6.80 – $7.00** | | Interest expense | $145 - $165M | **$190 – $210M** | [Subsequent Events (Acquisitions)](index=6&type=section&id=Subsequent%20Events) Verisk completed the acquisition of SuranceBay for **$162.5 million** and agreed to acquire AccuLynx for **$2.35 billion**, expanding its insurance ecosystem capabilities - On July 17, 2025, Verisk acquired SuranceBay, a provider of producer licensing and compliance solutions for the life and annuity industry, for **$162.5 million** in cash[22](index=22&type=chunk) - On July 29, 2025, Verisk agreed to acquire AccuLynx, a leading SaaS business management platform for residential property contractors, for **$2.35 billion** in cash[23](index=23&type=chunk) [Appendix](index=8&type=section&id=Appendix) This appendix provides supplementary information, including non-GAAP financial measure explanations, unaudited financial statements, and GAAP to non-GAAP reconciliations [Non-GAAP Financial Measures Explanation](index=8&type=section&id=Notes%20Regarding%20the%20Use%20of%20Non-GAAP%20Financial%20Measures) Verisk utilizes non-GAAP measures like Adjusted EBITDA, Adjusted EPS, and OCC growth to provide supplemental operating insights by excluding specific non-recurring and non-cash items - Adjusted EBITDA is used to measure operating performance and is calculated by adjusting GAAP net income for items like depreciation, amortization, interest, taxes, and certain nonrecurring gains or losses[33](index=33&type=chunk) - Diluted Adjusted EPS excludes the after-tax effect of acquisition-related costs and nonrecurring items to better represent the after-tax profitability of core results[34](index=34&type=chunk) - Organic Constant Currency (OCC) growth rates are presented to assess performance excluding the impacts of foreign currency fluctuations, recent acquisitions, and dispositions[39](index=39&type=chunk) [Financial Statements (Unaudited)](index=11&type=section&id=Attached%20Financial%20Statements) This section presents unaudited Condensed Consolidated Financial Statements, including Balance Sheets, Statements of Operations, and Statements of Cash Flows - The Condensed Consolidated Balance Sheet shows total assets grew to **$4,794.9 million** as of June 30, 2025, from **$4,264.7 million** at December 31, 2024[43](index=43&type=chunk) - The Condensed Consolidated Statement of Operations for the six months ended June 30, 2025, reports revenues of **$1,525.6 million** and net income attributable to Verisk of **$485.6 million**[44](index=44&type=chunk) - The Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2025, shows net cash provided by operating activities of **$689.2 million**[45](index=45&type=chunk) [Non-GAAP Reconciliations](index=15&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed tabular reconciliations of GAAP to non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow Q2 2025 Net Income to Adjusted EBITDA Reconciliation (in millions) | Line Item | Amount | | :--- | :--- | | Net income | $253.3 | | D&A, Interest, Taxes | +$192.4 | | EBITDA | $445.7 | | Adjustments (e.g., earn-outs) | -$0.9 | | **Adjusted EBITDA** | **$444.8** | Q2 2025 Net Income to Adjusted Net Income Reconciliation (in millions) | Line Item | Amount | | :--- | :--- | | Net income | $253.3 | | Adjustments (e.g., Amortization of intangibles, net of tax) | +$11.1 | | **Adjusted net income** | **$264.4** | - The company states it is not able to provide a reconciliation of projected non-GAAP guidance to the comparable GAAP results due to the high unpredictability of certain excluded items[41](index=41&type=chunk)

Core Viewpoint - Verisk reported strong financial results for Q2 2025, with revenue growth prompting an increase in full-year revenue and adjusted EBITDA guidance [2][3][17]. Financial Performance - Q2 2025 revenues reached $773 million, a 7.8% increase from $717 million in Q2 2024, and a 7.9% increase on an organic constant currency (OCC) basis [5][7]. - Net income for Q2 2025 was $253 million, down 17.7% from $308 million in Q2 2024, primarily due to prior year gains [7][9]. - Adjusted EBITDA for Q2 2025 was $445 million, up 11.9% from $397 million in Q2 2024, with a 9.7% increase on an OCC basis [7][10]. - Diluted GAAP EPS was $1.81, down 15.8%, while diluted adjusted EPS increased by 8.0% to $1.88 [7][14]. Revenue Breakdown - Underwriting revenues increased by 8.3% to $550 million in Q2 2025, while claims revenues grew by 6.6% to $223 million [8][13]. - For the first half of 2025, total revenues were $1,526 million, a 7.4% increase from $1,421 million in the same period of 2024 [5][8]. Cash Flow and Capital Return - Net cash provided by operating activities increased by 15.5% to $245 million in Q2 2025, with free cash flow rising by 22.6% to $189 million [20][15]. - The company paid a cash dividend of $0.45 per share in Q2 2025, reflecting a 15.4% increase from the previous year [20][15]. Strategic Acquisitions - Verisk completed the acquisition of SuranceBay for $163 million on July 17, 2025, enhancing its capabilities in the life and annuity sector [21]. - A definitive agreement was signed to acquire AccuLynx for $2.35 billion, aimed at strengthening its position in the insurance claims and restoration ecosystem [22]. Updated Guidance - The updated full-year 2025 guidance includes total revenue expectations of $3,090 to $3,130 million and adjusted EBITDA of $1,700 to $1,740 million [17].

Core Insights - Verisk has entered into a definitive agreement to acquire AccuLynx for $2.35 billion in cash, aimed at enhancing its network capabilities within the insurance claims and restoration ecosystem [1][8] - The acquisition is projected to positively impact Verisk's revenue growth, adjusted EBITDA margin, and adjusted EPS by the end of 2026 [2] Strategic Rationale - AccuLynx is seen as a natural extension of Verisk's existing solutions for insurance carriers, adjustors, and contractors, enhancing the network effect and creating significant value across the insurance claims and restoration ecosystem [4][7] - The acquisition will streamline operations for residential property contractors, addressing critical workflow stages such as lead generation, sales, and job management [4][5] Market Position and Benefits - AccuLynx's platform is utilized by 80% of the top property insurance carriers, indicating strong market trust and integration potential with Verisk's Property Estimating Solutions [5] - The integration is expected to reduce manual work, improve information flow, and deliver cost and time savings for both insurance carriers and contractors, ultimately benefiting policyholders through quicker repairs [5][6] Transaction Details - The transaction will be financed through fully committed debt financing and cash on hand, with an expected closing by the end of Q3 2025, pending regulatory approval [8] - Goldman Sachs & Co. LLC and PJT Partners are serving as financial advisors to Verisk, with Goldman Sachs Bank USA acting as the lead arranger for bridge financing [9] Company Overview - Verisk is a leading data analytics and technology partner for the global insurance industry, focusing on improving operational efficiency, underwriting, claims outcomes, and risk management [11]