Crawford & Company - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 delivered modest top-line growth with stronger profitability: Revenues before reimbursements rose 3.4% YoY to $312.0M; GAAP diluted EPS increased to $0.13 from $0.06; adjusted operating earnings +47% and adjusted EBITDA +30% YoY.
• Versus estimates, the company posted a small EPS beat and a notable revenue miss: EPS $0.21 (non-GAAP) vs $0.20 consensus; revenue $312.0M vs $325.9M consensus; 2-3 analysts contributing to consensus estimates (S&P Global)*.
• Sequentially, revenue declined from Q4 seasonal highs ($347.3M to $312.0M) while diluted EPS improved (CRD-A $0.11 → $0.13) on margin expansion; segments showed improved profitability, notably International Operations and Platform Solutions.
• A potential subsequent-event tax headwind (≈$5M) in International Operations was disclosed; dividend was maintained at $0.07 per share, supporting capital return continuity.

What Went Well and What Went Wrong

What Went Well

• Adjusted operating margin expanded 170 bps to 5.7% and adjusted EBITDA margin to 8.6%; operating earnings rose 47% YoY, reflecting disciplined execution and diversified segment contributions.
• International Operations revenue +6.4% and operating earnings more than doubled YoY; Platform Solutions’ operating margin expanded to 9.3% from 3.5% on improved efficiency and rate mix.
• CEO emphasized momentum and segment-wide contributions: “We’re pleased with our first quarter progress… focused on building upon this momentum as we execute our strategy to invest in the business, enhance liquidity, and continue to strengthen our balance sheet”.

What Went Wrong

• Revenue missed consensus by ~$13.9M (~4.3%), despite EPS beat; macro and underreporting of claims weighed on reported volumes according to management commentary (S&P Global; Seeking Alpha transcript)*.
• Broadspire margin compressed (12.7% vs 13.6% YoY) driven by higher centralized indirect support costs, despite revenue growth.
• Free cash flow remained negative (-$23.2M), and total debt increased to $246.6M as of March 31, 2025 (from $218.1M at year-end), reflecting working capital timing and financing activity.

Transcript

Operator (participant)

Good morning. My name is John, and I'll be your conference facilitator today. At this time, I would like to welcome everyone to the Crawford & Company First Quarter 2025 Earnings Release Conference Call. In conjunction with this call, a supplementary financial presentation is available on our website at www.crawco.com.

Under the Investor Relations section, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A period. Instructions will follow at that time. Should anyone need assistance at any time during this conference, please press star, then zero, and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, May 6, 2025. Now, I would like to introduce Tami Stevenson, Crawford & Company's General Counsel. Please go ahead.

Tami Stevenson (Senior VP and General Counsel)

Thank you, John. Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectibility of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, our continued compliance with financial and other covenants contained in our financing agreements, our long-term capital resource and liquidity requirements, and our ability to pay dividends in the future. The company's actual results achieved in future quarters could differ materially from the results that may be implied by such forward-looking statements.

The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the date of the call or to reflect the occurrence of unanticipated events. In addition, you are reminded that the operating results for any historical period are not necessarily indicative of the results to be expected for any future period. For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Form 10-Q for the quarter-end March 31, 2025, filed with the Securities and Exchange Commission, particularly the information under the headings Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as subsequent company filings with the SEC. This presentation also includes certain non-GAAP financial measures as defined under SEC rules.

As required, a reconciliation is provided for those measures to the most directly comparable GAAP measures. I would like now to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit?

Rohit Verma (CEO)

Thank you so much, Tami. Good morning and welcome to our First Quarter 2025 Earnings Call. Joining me today is Bruce Swain, our Chief Financial Officer, and Tami Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions. We've had a strong start to the year in the first quarter of 2025, continuing the growth and profitability momentum we achieved in the fourth quarter of 2024. Our diversified business model and disciplined execution resulted in profitable revenue growth and meaningful margin expansion in the quarter, with expanded profit contributions from all four segments. We were especially encouraged by the performance of our non-weather-dependent business, which continued to deliver steady growth and reinforce our position as a market leader across a wide range of claim types.

This morning, I'll review our segment operations for the first quarter before handing it over to Bruce for a deeper dive into our financial performance. On this slide, you'll see a few of the leading global insurers and organizations that partner with Crawford. Managing over $20 billion in claims annually across 70 countries, Crawford is the largest publicly traded claims management provider in the world. Our reputation as a trusted partner is built on decades of experience, specialized expertise, and our ability to operate in some of the most complex and challenging environments. Backed by a global team of 10,000 professionals, we continue to differentiate ourselves through consistent execution, scale, and a unique ability to support clients wherever and whenever we're needed. Crawford brings a rare combination of global reach, technical capability, and specialized talent, positioning us to grow alongside the evolving needs of our industry.

With people plus technology at the core of our identity, our strategy blends innovation and expertise to enhance claims management and deliver superior outcomes for clients across the globe. We see growing demand for expert-led, efficient claim solutions across property, casualty, and specialty lines of business, with their unique complexities and need for expertise. Additionally, we remain well-positioned to meet our clients' needs arising from the increasingly frequent and severe weather events globally. Crawford's deep client relationships across global reach and proven ability to rapidly deploy specialized talent and advanced technology enable us to support both weather and non-weather claims. This balanced capability reinforces our role as a trusted partner and positions us well for sustained growth across diverse risk environments. As the insurance industry faces increasing regulatory demands and cost pressures, more insurers are turning to claims outsourcing to enhance efficiency and scalability.

Our comprehensive service offerings, industry expertise, and global reach make us the ideal partner for insurers seeking to streamline operations. Industry consolidation also creates more opportunities for specialized service providers, allowing us to expand our footprint and reinforce key partnerships in an increasingly dynamic and decentralized P&C market. Expanding our strategic partnerships is a top priority for us. Through our knowledge of our clients' operations, we deliver better service and drive stronger outcomes, which improves retention and positions Crawford as a long-term valued partner. Finally, our ability to attract and retain top-tier talent and our insurtech capabilities are central to our growth strategy. The expertise and efficiency of our adjusters is a distinct competitive advantage, and our innovative technology solutions, backed by a highly skilled and agile team, enable us to drive efficiencies and deliver superior claims outcomes.

These components help position Crawford as the go-to partner for insurers navigating a rapidly evolving tech-driven market. Our first quarter highlights. In the first quarter, Crawford delivered 3.4% year-over-year growth in consolidated revenue, a 5% growth in constant currency driven by solid performances across North America loss adjusting, international operations, and Broadspire. We achieved a $5.7 million increase in operating earnings year-over-year, driven by improved profitability in North America loss adjusting, international operations, and Platform Solutions. Our consolidated operating margin improved by 170 basis points, reflecting our efforts to drive operational efficiencies. Gross profit increased across all segments, driven by both high revenue and our focus on improving our operating leverage. Our commitment to returning value to shareholders is reflected in the quarterly dividend of $0.07 per share for CRDA and CRDB, which illustrates our solid financial foundation and our confidence in the future of Crawford.

Our balance sheet shows continued strength and liquidity, with a low leverage ratio of 1.9x times EBITDA, providing us the flexibility to navigate market fluctuations and to make strategic investments to fuel our long-term growth. Our balanced revenue model is a core strength of the business. According to NOAA, severe storm reports increased 74% year-over-year in the first quarter, with March storm reports jumping 215% compared to the same period last year. This uptick in severe weather events provided a late quarter boost to our weather-related business lines, resulting in an almost 6% increase in the first quarter weather-related revenues year-over-year. Importantly, with our two-prong revenue model, we not only captured the benefits of this increased storm activity but also maintained strong growth in our non-weather-related business lines.

Our non-weather business revenue grew 2.5% or 4.6% in constant currency year-over-year in the first quarter of 2025 and continues to perform well. Our balanced model is a key differentiator for Crawford, allowing us to remain resilient and positioned for sustained growth regardless of weather volatility. The solid performance from both our weather and non-weather business lines highlights the strength of our diversified portfolio and the operational flexibility we've built over time. Our capital allocation strategy remains focused on maintaining financial flexibility while driving sustainable growth. We prioritize investments in long-term growth through capital expenditures and strategic acquisitions, with a commitment to operational leverage and strengthening our balance sheet. During the first quarter, we maintained strong liquidity, and our leverage ratio remains below industry averages. We have consistently returned value to shareholders, as demonstrated by our quarterly dividend.

The disciplined approach to capital allocation enables us to balance growth initiatives with shareholder return, positioning Crawford for long-term success. With that, let me turn the call over to Bruce for a deeper look at our segment operational and financial performance.

Bruce Swain (CFO)

Thank you, Rohit. As most of you know, our business is diversified and is comprised of four segments. North America loss adjusting, which includes our loss adjusting operations in the U.S. and Canada, accounted for 26% of first quarter 2025 revenues. International operations covering all service lines outside North America contributed 33% of quarterly revenues, reflecting our strong global presence. Broadspire, our U.S.-based third-party administration business, represents 31% of quarterly revenues. Platform solutions, which include contractor connection, networks, and subrogation services, accounted for 10% of revenues, supporting our strategy of offering end-to-end claims management solutions. North America loss adjusting saw solid revenue growth in the 2025 first quarter, with revenues increasing 3% year-over-year to $79.7 million. Operating earnings increased by 22% to $5.5 million, driven primarily by new business wins and expansion in key clients from our GTS service line, which saw revenue growth of 12% year-over-year.

This strong start to the year reflects continued momentum in our high-value, complex claim segment, as clients increasingly turn to Crawford for our technical expertise and trusted execution. We are seeing the benefits of targeted investments in talent and technology that have enhanced our ability to respond quickly and efficiently to client needs across North America. GTS, in particular, continues to be a growth engine, supported by both new client wins and deeper engagements with existing accounts. International operations delivered another quarter of impressive growth, with first quarter revenues of $104.4 million, growing 6% year-over-year or 9% on a constant currency basis. This growth was driven by double-digit revenue growth across the U.K., Europe, and Asia, reflecting strong client demand and the effectiveness of our global operating model. Operating earnings more than doubled to $3.5 million, and operating margin improved by 159 basis points compared to the prior year.

We are seeing benefits from our disciplined execution across multiple regions, including improved pricing strategies, stronger operational efficiency, and a sharpened focus on higher-value services. Our results highlight the progress we've made in scaling our international platform while maintaining our established reputation and personal service. As we move through the year, we remain focused on capturing additional opportunities in both mature and emerging markets while continuing to enhance profitability through targeted process improvements and technology enablement. Our Broadspire business delivered a solid first quarter with revenues of $96.4 million, reflecting strong new business wins and sustained client momentum. Revenues increased by 2.2% over the prior year, driven primarily by these new client additions, with pricing improvements across all service lines. Operating earnings were $12.2 million, with a company-leading operating margin of 12.7%.

As part of our strategic growth planning, we made proactive investments in talent to ensure we're well-positioned to support rising client demand. While these staffing additions modestly impacted operating earnings this quarter, they reflect our long-term commitment to service excellence and scalable growth. Our experienced team continues to perform well, securing many new client wins during the quarter. Combined with a client retention rate of 97.5%, Broadspire remains a leader in delivering high-quality, customized claim solutions. Platform Solutions reported first quarter revenues of $31.5 million, a slight year-over-year decline. Despite the modest revenue decline, operating earnings rose 163% compared to the prior year, with operating margin expanding by 579 basis points, reflecting effective cost management, improved operational efficiency, and favorable mix shift towards higher margin assignments associated with storm activity in March.

While revenues in this segment tend to vary quarter to quarter, we're encouraged by the meaningful improvement in profitability. These results underscore our focus on disciplined execution and our ability to deliver strong financial performance, particularly during periods of elevated catastrophe activity. Our response teams remain ready and well-positioned to deploy quickly in support of our clients. Now a look at our consolidated financials. In the 2025 first quarter, company-wide revenues before reimbursements were $312 million, an increase of 3.4% compared to the prior year period. Foreign exchange rates decreased revenues before reimbursements by $4.5 million, or 1.4%. GAAP net income attributable to shareholders totaled $6.7 million, compared to $2.8 million in the same period of 2024. GAAP diluted EPS in the 2025 first quarter was $0.13 for both CRDA and CRDB, increasing from $0.06 for both share classes in the 2024 period.

On a non-GAAP basis, diluted EPS was $0.21 for both CRDA and CRDB, compared to $0.13 for both share classes in the prior year period. The company's non-GAAP operating earnings totaled $17.8 million in the 2025 first quarter, or 5.7% of revenues, increasing 47% from $12.1 million, or 4% of revenues in the prior year period. Consolidated adjusted EBITDA was $26.8 million in the 2025 first quarter, or 8.6% of revenues, increasing 30% from $20.6 million, or 6.8% of revenues in the 2024 quarter. Company's cash and cash equivalent position as of March 31, 2025, totaled $57.4 million, compared to $55.4 million at the 2024 year-end. Our total receivables were $270.7 million as of March 31, 2025, down $2.4 million from the 2024 year-end. The company's total debt outstanding as of March 31, 2025, totaled $246.6 million, up from $218.1 million as of December 31, 2024.

Net debt stood at $189.2 million as of March 31, 2025, while our U.S. pension liability was $20.5 million, reflecting a funded ratio of 92.2%. We made no discretionary contributions to our U.S. defined benefit pension plan during the first quarter of 2025, and we do not intend to make contributions through the remainder of the year. Operating cash flow for the first quarter of 2025 was a use of $13.9 million, with free cash flow of -$23.2 million. This compares to a use of $19.8 million last year with free cash flow of -$29.4 million. The improvement in operating and free cash flow in the 2025 first quarter was primarily due to improved earnings. It is not uncommon for us to report negative cash flow in the first quarter related to seasonal cash outflows to start the year.

It is important to note that this is not a reflection of the company's long-term cash-generating capabilities, and we expect cash flow will be healthy in 2025, improving over 2024 levels. Unallocated corporate costs were $6.2 million in the 2025 first quarter, compared to a cost of $8 million in the 2024 period. The decrease was primarily due to lower self-insured expense and professional fees. During the 2025 first quarter, non-service pension costs were $2.3 million compared to $2.5 million in the 2024 period. We recognized a pre-tax contingent earn-out cost of $363,000 in the 2025 first quarter, compared to a cost of $151,000 in the 2024 period. During the first quarter of 2025, the company did not repurchase any shares of CRDA or CRDB. As a reminder, approximately 1.1 million shares are eligible to be repurchased under our 2021 share repurchase authorization.

With that, I'll turn the call back over to Rohit for concluding remarks.

Rohit Verma (CEO)

Thank you, Bruce. As we move through 2025, we're focused on continuing to drive revenue growth and profitability. Our balanced portfolio of weather and non-weather businesses, combined with investments in both our people and technology, position us well to deliver long-term value. We maintain a disciplined focus on cash generation and financial strength to ensure we are well-prepared to endure potential economic headwinds while supporting our clients and delivering shareholder value. I want to take a moment to thank our partners and clients for their continued trust and collaboration. Most importantly, I'd like to recognize our dedicated team around the world. Your hard work and commitment to excellence continue to drive our success. Thank you for your time today. John, please open the call for questions.

Operator (participant)

Yes, sir. Thank you. Ladies and gentlemen, we will now begin the question and answer session. At this time, if you'd like to ask a question, please press star then the number one on your telephone keypad. To withdraw your question, please press the pound key. If you're using a speakerphone, please pick up the handset before asking your question. We'll pause for a moment to compile the Q&A roster. One moment, please. Thank you. We now have our first question. This comes from Mark Hughes from Truist. Your line is now open. Please go ahead and ask your question.

Mark Hughes (Analyst)

Yeah, thank you. Good morning.

Bruce Swain (CFO)

Good morning, Mark.

Rohit Verma (CEO)

Good morning, Mark.

Mark Hughes (Analyst)

The GTS up 12%. Could you talk a little bit about the components of that growth? How much was staff additions? How much might be—I think you mentioned more engagement and new wins? How is that market evolving?

Rohit Verma (CEO)

Mark, as you know, that has been an area of growth for us for the last close to five years, and we've almost tripled that business in the last five years. We've had growth from both dimensions, both from getting more experts. As we get more experts, we win greater trust from our clients to win more business from them. As a result, we get more nominations. It is sort of been a flywheel effect for us. As we continue to win more business, it creates more eminence about our capabilities across the world, and we attract even more business, and we attract even more experts. It is kind of hard for me to break it down as to what percentage of that growth comes from one or the other because they're deeply interlinked now.

Mark Hughes (Analyst)

Yeah. What's your sense of how much more those sort of high-value claims are being outsourced by insurers now versus a couple of years ago?

Rohit Verma (CEO)

I definitely think that there is an increase, and I'll talk about it across sort of two axes. I think one axis of the increase comes from just the general increase in complexity of risk around the world. If you had $1 billion buildings in a certain country in Europe, that may be now $1.1 billion, right? I think you're just seeing an increase in the complexity and level of risk. That's one. The second axis really is the complexity of risk placement. What used to be a single carrier placement, so a carrier was completely open to taking a $25 million or $50 million TIV just on their books. Because of what's happening with the loss profile and reinsurance rates, it's now become a layered business.

When it becomes a layered business or a shared business where you've got multiple participants, it tends to require some form of an independent adjuster. We've certainly seen an increase in that because of what's happening in the property market. Those are probably the two axes on which we've seen the increase. I expect that to continue for the foreseeable future.

Mark Hughes (Analyst)

Yeah. Very good. How about in the Broadspire, the top-line growth opportunity? You had a very strong growth at this time last year. Are you seeing as much business coming up for bid in your—and how has your success been on that? Just sort of curious on what's influencing the growth rates in Broadspire.

Rohit Verma (CEO)

Yeah. What I would say is that we've actually seen a pretty healthy round of new business that we won in the first quarter. As you know, there is a lag between winning that business and then actually the business starting to show up as we bring those clients on board. That has remained pretty healthy. As a matter of fact, I think Bruce alluded to that, that we had a small downtick in the Broadspire margin, and that was really because of advanced staffing. We know that new business is coming. We've already won the business, so we are doing anticipatory staffing for that. We do not see a slowdown in the growth of that business. We've had a pretty solid retention for the year as well or for the quarter as well, which was at 97.5%.

We feel that there's still a lot of growth to come in Broadspire.

Mark Hughes (Analyst)

Very good. Anything there on workers' comp claims frequency or severity? Anything that might be happening on the medical front that you're seeing influencing the cost for your clients? Just always looking for any kind of inflection or change, and maybe some are suggesting a little bit of an inflection here. Anything in your book on workers' comp that points one way or the other?

Rohit Verma (CEO)

You know, Mark, we haven't observed anything which has caught our eye in terms of a change. As you know, we've been growing, so we've just seen an increase in our activity from that. I think we had reported maybe a year ago, maybe a year and a half ago, that we had seen a slowdown in the medical management piece after COVID, but that's sort of come back and come back to the levels that I would say is in line with pre-COVID. We are absolutely seeing greater engagement with our clients on how to manage the outcomes better and how to manage costs better.

Our technology team has been spending quite a bit of time with clients in what can we do with the various predictive models, with AI analytics, things like that, with machine learning to see how we can get better outcomes, whether it's in terms of return to work, medical payment management, or just other factors as you know that drive the workers' comp claims costs.

Mark Hughes (Analyst)

One more, if I might. You'd mentioned how weather activity picked up in March that was helpful, but kind of late in the quarter. I think you talked about that within the context of platform solutions.

Rohit Verma (CEO)

Yep.

Mark Hughes (Analyst)

Do you think that'll—will that flow through into 2Q?

Rohit Verma (CEO)

Yeah. Mark, we're seeing a sort of—we're observing something, and it's a hypothesis that we've tested with some clients, and there seems to be some validity to that hypothesis. There is definitely a challenge with the affordability of insurance that's happening today in various states, and you're pretty familiar with that. What that's resulting in is the general underreporting of claims for what our hypothesis is for two reasons. One, the deductibles are higher. Because of insurance affordability, policyholders are taking higher deductibles as a result of that. Many claims during a storm season that we would have seen were not seen as much because of the high deductible.

Then second, because of the potential macroeconomic headwinds, we believe a lot of policyholders do not want an increase in their insurance costs if they file claims or use their funds towards something that may have been cosmetic from a storm damage. Those sort of two or three things we believe are the big factors in which we are seeing underreporting of claims. I mean, what we would see is claims from a typical weather event like what we saw in March, we are not seeing the same level. Our carrier clients are telling us that they are seeing a 20%-30% drop in those reports as well.

Mark Hughes (Analyst)

Interesting. Okay. Thank you very much.

Rohit Verma (CEO)

Thank you.

Bruce Swain (CFO)

Thanks.

Operator (participant)

Thank you. The next question comes from Kevin Steinke from Barrington Research. Your line is now open. Please go ahead.

Kevin Steinke (Equity Research Analyst)

Good morning.

Bruce Swain (CFO)

Hi, Kevin.

Rohit Verma (CEO)

Hi, Kevin.

Kevin Steinke (Equity Research Analyst)

Okay. I wanted to start off by asking about international continued revenue momentum there. You mentioned double-digit growth across several of your markets, and you mentioned pricing as well as higher-value services. Maybe if you can delve a little bit more into the drivers there, and I was particularly interested in the comment about higher-value services.

Rohit Verma (CEO)

Yeah. The higher-value services is more around the GTS kind of work that we've been doing, and that's been growing. I mean, we've seen, as you know, we've had some struggles in our Asia market. That has started to come back more because we've been investing there in GTS-like talent or high-complexity talent. Look, we feel very good about our international business. We've been through a transformation cycle. It took us the better part of three years, really, to transform that business. We've gone through management changes. We've gone through repricing of some of our client programs. We've gone through adding additional teams, as you know, in the Netherlands and most recently in Spain and other parts of the world. We believe that we've been on this transformation trajectory.

Kevin, you will recall that our European business and our international business broadly was hit pretty severely after COVID because a big portion of our business was related to travel and entertainment. Since then, we've been working on diversifying that book. I'm really pleased to see the work that our TPA teams have done internationally as well as our loss-adjusting teams that have worked really hard to win larger clients, to get nominated on larger loss-adjusting programs, and then also on much better-priced TPA programs. Those have been the big factors that have been driving international. I think the leadership change and the management changes that we've made, they've also had a pretty significant impact. I mean, we have a newer leader in Europe. We have a newer leader in the U.K.

We have a newer leader in Australia, a newer leader in Latam, and then a newer leader in Asia. You pick any of our regions. Over the last three to five years, we have gone through leadership changes there, and Andrew Bart, who runs our international business, is doing a spectacular job of running the unit.

Kevin Steinke (Equity Research Analyst)

Okay. Great. Yeah. That's helpful color. You mentioned there GTS helping growth internationally. I've always thought of GTS more as benefiting North America loss adjusting, but how meaningful has the addition of GTS adjusters been within international?

Rohit Verma (CEO)

Yeah. Look, the substantive growth in GTS has definitely come in the U.S. As you heard me talk to Mark about it, the business that we've tripled in the last five years has certainly been in the U.S. That should not sort of suggest that we haven't made progress internationally. I would say that the U.K. has done a great job bringing in more GTS and specialty business. Same thing in Europe and same thing in Asia as well as Latin America. I would say that we benefit from GTS across the world for the factors that I was talking about earlier, which is the complexity of the risk continues to go up, complexity of the risk placement continues to go up. As we establish ourselves as the destination for experts, we also then establish ourselves as a destination for complex claims to come through.

I don't have an exact number that I can give you right now in terms of what's been the growth for GTS internationally because it's not something that we track that way because we track things more at a country level. I can tell you that GTS has played a pretty significant role for us growing not just in North America but across the world.

Kevin Steinke (Equity Research Analyst)

Okay. Great. You talked quite a bit in your prepared remarks about the focus on improving operating leverage for the company overall. Maybe if you can touch on some of the initiatives there. You also seemed quite pleased with the improvement in the platform solutions, margins, and operational efficiencies there. Just maybe if you can touch on some of the factors driving operating leverage.

Rohit Verma (CEO)

The biggest factor driving operating leverage for us has been process improvements and then translating those process improvements into technology implementations. As you know, we've maintained anywhere from $25 million-$35 million in CapEx over the last several years. That has all been invested in improving our systems landscape. We are slowly moving, as an example, on international operations to almost one or two loss adjusting systems from probably 8 or 10 of them. Similarly, our TPA business, which has been running on several systems, we are slowly moving for our non-North America business, or I should say international business outside of North America, to one TPA system. Those are all things that we're doing. We're looking at our entire technology landscape, both from an IT simplification but also from a process simplification lens.

I believe that that'll start to show stronger results in terms of our operating leverage in months and quarters to come.

Kevin Steinke (Equity Research Analyst)

Okay. Great. I think that's all I had for now. I'll turn it back over. Thank you.

Rohit Verma (CEO)

Thank you, Kevin.

Bruce Swain (CFO)

Thank you.

Operator (participant)

Thank you. We do not have any further questions at this time. I will turn the call back over to Mr. Rohit Verma for closing remarks. Please go ahead, sir.

Rohit Verma (CEO)

Thank you, John. Thank you to all our employees, clients, and shareholders for your continued commitment to Crawford. Thank you, and God bless.

Operator (participant)

Thank you for participating in today's Crawford & Company conference call. This call will be available for replay beginning at 11:30 A.M. EST today through 11:59 P.M. EST on May 13, 2025. The conference ID number for the replay is 27578#, and the number to dial for the replay is 1-888-660-6264. Thank you. You may now disconnect.