Summary of Verisk Analytics Conference Call Company Overview - **Company**: Verisk Analytics (NasdaqGS: VRSK) - **Date**: March 12, 2026 - **Speaker**: CFO Elizabeth Mann Key Points Industry and Market Position - Verisk is deeply connected to the insurance industry, providing various solutions that create win-win opportunities for both the company and its customers [4][12] - The company is focused on expanding its open architecture and ecosystem to identify new value-added solutions [3][4] Growth Opportunities - Verisk sees significant growth potential in its property estimating solutions and anti-fraud business [4][6] - The property estimating solutions serve insurance carriers, contractors, and third-party adjusters, leveraging a proprietary data set for pricing estimates [12][13] - The anti-fraud business is evolving with AI tools to identify fraudulent claims, with a study indicating that one in three consumers finds it acceptable to alter photos for claims [40][41] Financial Performance - Verisk's revenues are approximately 30 basis points of the insurance industry's premium, equating to $0.003 spent on Verisk solutions for every dollar of premium [52][54] - The company has historically grown faster than the insurance industry's net written premium growth, averaging 7% compared to the industry's 5% since going public in 2009 [156][158] AI and Technology Integration - Verisk is investing in AI-driven enhancements to improve its products, including generative AI for automatic photo tagging and fraud detection [14][17] - The company emphasizes the importance of AI in enhancing customer value without replacing the core offerings [178][191] International Markets - International revenue accounts for about 17% of total revenue, with opportunities primarily in catastrophe and risk modeling [80][82] - The company has made acquisitions in Germany to strengthen its position in the European market [87][88] Capital Allocation and M&A Strategy - Verisk has a cash-generative business model and is focused on organic investments, selective M&A, and returning capital to shareholders [198][208] - The company is looking for proprietary data sets and opportunities to enhance its offerings in the insurance sector [205][206] Challenges and Considerations - The insurance industry is highly regulated, which can slow the adoption of new technologies [122][124] - There is a cautious approach to modernization, but an increasing appetite for efficient solutions is noted [125][126] Conclusion - Verisk Analytics is positioned for continued growth through its innovative solutions in the insurance industry, leveraging AI and expanding its ecosystem while maintaining a strong focus on customer value and capital efficiency [4][178][191]

Financial Data and Key Metrics Changes - For Q4 2025, consolidated revenue was $779 million, representing a 5.9% increase year-over-year. Net income was $197 million, a 6.2% decrease compared to the prior year, while diluted GAAP earnings per share were $1.42, down 1% year-over-year [18][19] - Organic constant currency (OCC) revenue growth for the full year 2025 was 6.6%, with adjusted EBITDA growth of 8.5% and adjusted EBITDA margins at 56.2%, up 150 basis points year-over-year [5][26] Business Line Data and Key Metrics Changes - OCC revenue growth in underwriting was 7.2%, while claims grew by 0.5%. Subscription revenues, which comprised 84% of total revenues, grew 7.7% on an OCC basis [19][20] - The transactional revenues, which make up 16% of total revenues, declined 6.5% on an OCC basis in Q4, primarily due to lower volumes in property estimating solutions and softness in personal lines auto business [24][25] Market Data and Key Metrics Changes - The insurance industry is reported to be healthy, with mid-single-digit net written premium growth and improved combined ratios, indicating strong overall profitability [7] - The company anticipates that the first quarter of 2026 will see lower reported revenue compared to Q4 2025 due to the divestiture of Verisk Marketing Solutions, but expects year-over-year growth when normalized for this sale [33][34] Company Strategy and Development Direction - The company has decided to terminate the acquisition of AccuLynx due to extended FTC review processes and has sold Verisk Marketing Solutions to focus on data, analytics, and technology solutions for the insurance industry [6][7] - The company is enhancing its AI capabilities, with over 35 AI-powered projects currently in use and plans for more in 2026, aiming to leverage data and technology to support client needs [11][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term growth targets, driven by the ongoing adoption of data and technology in the global insurance industry [6] - The company noted that clients are increasingly interested in utilizing AI technologies and improving operational efficiencies, which aligns with the company's strategic focus [9][10] Other Important Information - The company plans to execute a $1.5 billion accelerated share repurchase program and has increased its dividend by 11% to $2 per share annually [30] - For 2026, the company expects consolidated revenue in the range of $3.19 billion to $3.24 billion, with adjusted EBITDA between $1.79 billion and $1.83 billion [31][32] Q&A Session Summary Question: Client preferences regarding AI product development - Clients express a range of preferences; larger clients often want to develop their own AI applications using the company's data, while smaller clients prefer the company to create AI products for them [38][40] Question: Software and analytics relationship with data - The primary application of the company's software is in delivering data and integrating ecosystems, which enhances efficiency and functionality [49][50] Question: Pricing and margin expectations - The company expects to maintain a strong pricing environment, reflecting the value of its solutions, although there may be a slight moderation compared to previous years [71][77] Question: Competitive dynamics in the auto personal line market - The company is focusing on delivering differentiated analytics to drive long-term subscription growth, addressing challenges from non-differentiated products [80][82] Question: Transactional revenue recovery path - The company anticipates working through challenges in transactional revenue during the first half of 2026, with expectations for long-term strength in this area [59]