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CRAWFORD & CO (CRD-A)·Q1 2025 Earnings Summary

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 .

Financial Results

Consolidated comparison (prior two quarters vs current)

MetricQ3 2024Q4 2024Q1 2025
Revenues before reimbursements ($USD Millions)$329.4 $347.3 $312.0
GAAP Diluted EPS (CRD-A) ($)$0.19 $0.11 $0.13
Adjusted Operating Earnings ($USD Millions)$21.8 $18.7 $17.8
Adjusted Operating Margin (%)6.6% N/A5.7%
Adjusted EBITDA ($USD Millions)$29.6 $27.9 $26.8
Adjusted EBITDA Margin (%)9.0% N/A8.6%
GAAP Net Income ($USD Millions)$9.5 $5.7 $6.7

Segment breakdown (Q1 2025 vs Q1 2024)

SegmentRevenue ($USD Millions) – Q1 2024Revenue ($USD Millions) – Q1 2025Operating Earnings ($USD Millions) – Q1 2024Operating Earnings ($USD Millions) – Q1 2025Operating Margin (%) – Q1 2024Operating Margin (%) – Q1 2025
North America Loss Adjusting$77.4 $79.7 $4.5 $5.5 5.8% 6.9%
International Operations$98.1 $104.4 $1.7 $3.5 1.7% 3.3%
Broadspire$94.3 $96.4 $12.8 $12.2 13.6% 12.7%
Platform Solutions$31.9 $31.5 $1.1 $2.9 3.5% 9.3%

KPIs and mix

KPI / MixQ1 2024Q1 2025
Weather-related revenue growth YoY (%)—+5.9%
Non-weather revenue growth YoY (%)—+2.5%
US Severe Storm Reports (NOAA)2,048 3,569
Geographic revenue mix – U.S. (%)59.6% 59.6%
Geographic revenue mix – U.K. (%)13.4% 14.2%
Cash and equivalents ($USD Millions)$55.4 (12/31/2024) $57.4 (3/31/2025)
Total debt ($USD Millions)$218.1 (12/31/2024) $246.6 (3/31/2025)

Versus estimates (Wall Street consensus)

MetricConsensusActualSurprise
Primary EPS (Non-GAAP) ($)$0.20*$0.21 +$0.01*
Revenue ($USD)$325,895,330*$312,032,000 -$13,863,330*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue / MarginsFY 2025None providedNone providedMaintained “no formal guidance”
Dividend per share (CRD-A, CRD-B)Q2 2025 payable$0.07 (historical quarterly) $0.07 declared May 7, 2025; payable Jun 6, 2025Maintained

Note: No explicit revenue/margin/tax rate guidance was issued for Q1; management reiterated strategic focus and balance sheet strength .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Weather-related claims activityBenign environment; Helene/Milton occurred late; expected Q4 impact Increased CAT activity driving late-year volumes across segments Weather reports up; management notes underreporting of claims despite events Recovering activity but muted reported volumes
International pricing/productivityRevenue growth and margin expansion in U.K./Europe Broader improvement across regions and margin lift Continued growth (+6.4% rev); operating earnings +105% YoY Improving
Platform Solutions efficiencyDemand down with fewer storms; margin impacted Q4 margin improved on storm-related demand Profitability improved; margin 9.3% on cost reductions, rate mix Improving
Insurtech/technology initiativesNot highlightedEmphasis on tech and innovation for customer experience “Next generation Insurtech capabilities”; strengthening partnerships Focus increasing
Regulatory/tax mattersNot highlightedNot highlightedForeign tax authority guidance could have ≈$5M negative impact Emerging risk
Capital allocation / leverageDividend continuity; buybacks in CRD-B Dividend maintained; buybacks modest Dividend maintained; leverage ratio low at 1.90x EBITDA Stable balance sheet; selective flexibility

Management Commentary

  • CEO strategic message: “We continued the growth and profitability momentum… delivering solid year-over-year revenue growth of 3.4%… margin improvement across three of our business segments driven by our diversified model and disciplined execution.”
  • Segment emphasis: “International Operations… gain of 105% in operating earnings… Platform Solutions delivered improved profitability, reflecting enhanced operating efficiency and the value of our strong carrier partnerships.”
  • Strategic priorities: “Leading the industry with next generation Insurtech capabilities… Committed to industry-leading financial strength… Leverage ratio significantly below industry average at 1.90x EBITDA.”

Q&A Highlights

  • Underreporting of claims: Management and carrier clients observed a 20–30% drop in reported claims despite events, tying to macro headwinds and policyholder behavior; this tempers near-term volume realization .
  • Mix and margin: Focus on improving pricing and productivity, notably in International Operations; intentional staffing additions at Broadspire impacted margins but support growth .
  • Balance sheet and capital return: Dividend sustained; liquidity and low leverage support pursuit of opportunities and resilience through cycles .
  • Clarifications: Non-GAAP adjustments (amortization, non-service pension costs, earnout adjustments) and segment operating earnings definitions reiterated for transparency .

Estimates Context

  • EPS beat by $0.01 and revenue missed by ~$13.9M versus S&P Global consensus; only 2–3 estimates underlie consensus, which may amplify revisions sensitivity (S&P Global)*.
  • Given margin expansion and segment profitability, EPS estimates may drift higher modestly; however, reported-volume uncertainty and the disclosed foreign tax headwind (≈$5M) could lead to cautious revenue estimate adjustments .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Profitability over volume: Despite a revenue miss, margin execution drove EPS outperformance; focus on operating leverage and cost discipline is bearing fruit .
  • Segment mix is improving: International and Platform Solutions are turning, reducing reliance on North American storm cycles; Broadspire continues to add clients despite margin headwinds .
  • Watch volume normalization: Management sees underreporting of claims; normalization in filing behavior could catalyze upside to volumes, while persistent underreporting is a near-term risk .
  • Balance sheet supports flexibility: Dividend maintained; leverage at ~1.90x EBITDA provides optionality for investment and selective M&A .
  • Tax/regulatory watch: International tax guidance (~$5M potential impact) is a near-term earnings risk; monitor updates and potential mitigation strategies .
  • Estimate dynamics: Limited coverage (2–3 analysts) means prints can drive outsized revisions; expect small upward EPS adjustments and cautious revenue resets (S&P Global)*.
  • Trading setup: Into subsequent quarters, catalysts include storm activity, volume reporting trends, and continued margin execution; downside risks include macro-related claim behavior and tax outcomes .