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Verisk Analytics, Inc. (VRSK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered broad-based growth and beats: revenue $772.6M vs consensus $768.3M* and diluted adjusted EPS $1.88 vs consensus $1.77*, driven by strong subscription growth (pricing, renewals) across Underwriting and Claims; adjusted EBITDA margin expanded to 57.6% . Values retrieved from S&P Global.*
  • Full-year 2025 outlook raised for revenue ($3.09–$3.13B) and adjusted EBITDA ($1.70–$1.74B); EPS range narrowed to $6.80–$7.00 as interest expense rises with AccuLynx financing .
  • Strategic catalysts: signed definitive agreement to buy AccuLynx ($2.35B) and closed SuranceBay ($162.5M), extending Verisk’s network in roofing workflows and life & annuity distribution; management expects accretion to adjusted EPS by YE 2026 .
  • Call color: FX translation added ~120 bps to reported margin; transactional revenues returned to growth (+1.8% OCC), offset by auto segment competitive pressure and expected federal contract headwinds (<1% of revenue) in 2H25 .
  • Regulatory milestone: California completed review of Verisk’s Wildfire model—first catastrophe model under the state’s new framework—supporting market stability and insurer participation in wildfire-prone areas .

What Went Well and What Went Wrong

What Went Well

  • Strong OCC performance: revenue +7.9% and adjusted EBITDA +9.7% OCC; subscription revenue grew 9.3% OCC, led by forms, rules & loss costs, Extreme Event Solutions, and Anti-Fraud (pricing, renewals) .
  • Margin expansion: adjusted EBITDA margin 57.6% (+220 bps YoY), with ~120 bps FX tailwind and underlying cost discipline/talent optimization initiatives .
  • Strategic M&A: AccuLynx integration expected to enhance PES network connectivity and data monetization; accretive growth/margins and high recurring revenue mix cited by management .

What Went Wrong

  • GAAP EPS down 15.8% YoY to $1.81 due to prior-year nonrecurring gains (healthcare/specialized markets dispositions, early debt extinguishment) .
  • Auto segment headwinds: tougher comps and competitive pressure in auto-related businesses (less than 10% of total) expected to persist .
  • Interest expense rising ($190–$210M FY25) reflecting AccuLynx financing; EPS guide narrowed despite raised revenue/EBITDA outlook .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenues ($USD Millions)$735.6 $753.0 $772.6
Diluted EPS (GAAP) ($)$1.44 $1.65 $1.81
Diluted Adjusted EPS ($)$1.61 $1.73 $1.88
Adjusted EBITDA ($USD Millions)$398 $417 $445
Adjusted EBITDA Margin (%)54.1% 55.3% 57.6%
Segment Revenues ($USD Millions)Q4 2024Q1 2025Q2 2025
Underwriting$512 $532 $550
Claims$224 $221 $223
Total Insurance$736 $753 $773
KPIsQ4 2024Q1 2025Q2 2025
OCC Revenue Growth (%)8.6% 7.9% 7.9%
Subscription Revenue (% of total)—83% 82%
Net Cash from Operations ($USD Millions)$255 $444.7 $244.5
Free Cash Flow ($USD Millions)$200.0 $391.0 $188.7
Dividend per Share ($)$0.39 $0.45 $0.45
Results vs S&P Global ConsensusQ4 2024Q1 2025Q2 2025
Revenue Consensus ($USD)$733.6M*$749.8M*$768.3M*
Revenue Actual ($USD)$735.6M $753.0M $772.6M
EPS Consensus ($)$1.60*$1.68*$1.77*
Diluted Adjusted EPS Actual ($)$1.61 $1.73 $1.88
# of EPS Estimates14*14*15*
# of Revenue Estimates12*13*14*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($)FY 2025$3.03B–$3.08B $3.09B–$3.13B Raised
Adjusted EBITDA ($)FY 2025$1.67B–$1.72B $1.70B–$1.74B Raised
Adjusted EBITDA Margin (%)FY 202555.0%–55.8% 55.0%–55.8% Maintained
Diluted Adjusted EPS ($)FY 2025$6.80–$7.10 $6.80–$7.00 Narrowed (top end lowered)
Interest Expense ($)FY 2025$145M–$165M $190M–$210M Raised
Tax Rate (%)FY 202523%–25% 23%–25% Maintained
Capital Expenditures ($)FY 2025$245M–$265M $245M–$265M Maintained
Fixed Asset D&A ($)FY 2025$250M–$270M $250M–$270M Maintained
Intangible Amortization ($)FY 2025$65M $65M Maintained
Dividend per Share ($)FY 2025$1.80 (annualized) $1.80 (annualized) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/technology initiativesCore Lines Reimagine delivering pricing/efficiency; Synergy Studio SaaS migration in Extreme Events; generative AI in forms management Launched PAAS AI and Mozart Compare AI; early commercial rollout of Underwriting Assistant; strong adoption feedback Expanding use cases and adoption across underwriting workflows
Macro/tariffs/FXMinimal direct exposure; monitoring tariff impacts on claims costs FX translation added ~120 bps to margin; modest federal spending cuts expected in 2H25 (<1% of revenue) FX tailwind; limited government headwind
Product performanceQ4 OCC revenue +8.6%; strength in PES and Anti-Fraud; OCC adjusted EBITDA +13.5% Transactional revenues returned to growth (+1.8% OCC), offset by auto segment pressure; securitization robust in Q2 Mixed: subscriptions strong; transactions stabilize with pockets of pressure
Auto segmentNot highlightedCompetitive pressure vs large rival; auto <10% of revenue Headwind persisting
Regulatory/legalWildfire model updated; engagement with CDI for ratemaking use CDI completed review; first catastrophe model under new CA framework Positive regulatory validation, potential market re-entry catalyst
Capital allocationDividend +15%; repurchase authorization increased AccuLynx financed via fully committed debt; leverage to high end of 2–3x, plan to delever by YE 2026 while continuing buybacks Active M&A; balanced deleveraging and buybacks

Management Commentary

  • CEO: “We are raising our revenue and adjusted EBITDA outlook for the full year 2025…with our acquisition of SuranceBay and pending acquisition of AccuLynx, we will leverage our strengths to extend and expand the capabilities of these successful businesses” .
  • CFO: “OCC revenues grew 7.9%…subscription revenues…grew 9.3%…Adjusted EBITDA margins were 57.6%, up 220 bps…FX translation contributed ~120 bps” .
  • Strategy: AccuLynx “is highly additive to our Property Estimating Solutions business due to a high degree of customer overlap and complementary functionality…opportunities for cross-sell, upsell and expanded data augmentation” .

Q&A Highlights

  • AccuLynx synergies: High customer overlap with PES; near-term cross/upsell opportunities; not predicated on cost takeout—intends to invest while maintaining attractive margins .
  • Guide mechanics: Raised revenue/EBITDA; balanced 2H outlook due to tough comps (storms/Q4’24), federal contract cuts (<1% rev), auto pressure, and international transaction variability .
  • Auto competition: Facing a large competitor; Verisk leverages claims+underwriting data integration to differentiate; auto <10% of revenue .
  • Leverage/buybacks: AccuLynx debt lifts leverage to upper end of 2–3x; plan to delever by YE 2026 while continuing share repurchases, likely at a lower rate near term .
  • AccuLynx cyclicality: Low cyclicality—roofing driven by large installed home stock; some winter seasonality; planned investments to integrate with PES .

Estimates Context

  • Q2 2025 beat: revenue $772.6M vs $768.3M* and diluted adjusted EPS $1.88 vs $1.77*, with 14–15 estimates contributing to consensus; sequential beats also observed in Q1 and Q4 2024 on revenue and EPS . Values retrieved from S&P Global.*
  • Potential estimate revisions: Raised FY revenue/EBITDA; EPS range narrowed due to higher interest expense—expect some upward revenue/EBITDA revisions and cautious EPS tweaks given financing costs .

Key Takeaways for Investors

  • Strong quarter and guidance raise: Revenue/EPS beats with margin expansion; FY revenue/EBITDA raised—supportive for near-term sentiment and potential upward estimate revisions .
  • Strategic M&A extends network effects: AccuLynx (roofing SaaS) + SuranceBay (life distribution) broaden Verisk’s ecosystem; cross-sell/data monetization are primary value drivers—accretive by YE 2026 .
  • Quality of growth: Subscriptions ~82–83% of revenue; pricing realization and renewals underpin resilience across Underwriting and Claims .
  • Watch interest expense/leverage: Higher FY25 interest ($190–$210M) narrows EPS guide; management plans to delever toward mid-range by YE 2026 while maintaining buybacks .
  • FX tailwind and transient transactional benefits: Q2 margin aided by FX (~120 bps); securitization strength unlikely to repeat in 2H; federal contract cuts are contained (<1% revenue) .
  • Competitive/segment risks: Auto segment competitive pressure persists; monitor California market dynamics and potential lift from wildfire model deployment .
  • Execution on AI/automation: Early traction for underwriting/chatbot tools suggests ongoing pricing power and efficiency for clients, sustaining long-term subscription growth .