Executive Summary

Q3 2025 was resilient operationally: revenue $768.3M (+5.9% YoY), adjusted EBITDA $429.1M (+7.2% YoY; margin 55.8%), and diluted adjusted EPS $1.72 (+3.0% YoY), with transactional weakness from historically low weather offset by strong subscription growth and cost discipline .
Versus S&P Global consensus: EPS $1.72 vs $1.704* (beat), EBITDA $429.1M vs $431.3M* (in line to slight beat on actual $432.1M reported in release tables), revenue $768.3M vs $776.2M* (miss), reflecting the weather-driven transactional shortfall .
Guidance updated to remove AccuLynx contribution in 2025: total revenue lowered to $3.05–$3.08B (from $3.09–$3.13B), adjusted EBITDA to $1.69–$1.72B (from $1.70–$1.74B); interest expense reduced to $165–$185M (from $190–$210M) given cash proceeds yield; margins and EPS maintained .
Catalysts: FTC Second Request on AccuLynx (regulatory overhang), ongoing AI-enhanced product adoption (Exact Expert, Exact AI), and strong free cash flow fueling buybacks/dividends; watch Q4’s tough hurricane comp (Helene/Milton) .

Note: Asterisked values are S&P Global consensus/actual retrieved via GetEstimates.

What Went Well and What Went Wrong

What Went Well

Subscription-led growth: subscriptions 84% of revenue and +8.7% OCC, broad-based across forms/rules/loss costs, extreme event solutions, anti-fraud, and specialty/life; margin expanded to 55.8% on cost discipline .
AI commercialization momentum: “over 40 clients” on Exact Expert (six of top 10 carriers), launch of Exact AI with 273 users; growing contributory datasets (106 contributors, ~600M images) and regulator tools (Savviar); management positioning AI as an accelerant to long-term growth/margins .
Cash generation and capital returns: operating cash flow $403.5M (+36.2% YoY), free cash flow $336.1M (+39.6% YoY), dividend $0.45 (+15% YoY), and $100M buybacks, with $1.2B authorization remaining .

What Went Wrong

Weather-driven transactional headwinds: exceptionally light severe weather reduced claims volumes; transactional revenues -8.8% OCC; PCS data shows Q3 event frequency -30% and severity -78% YoY; 2025 on track for first year since 2015 with no named U.S. hurricane landfall so far .
Auto personal lines softness and government contract reduction: competitive pressures in auto and a previously signaled government contract reduction together trimmed ~100bps from OCC revenue growth; OCC revenue was 5.5% vs ~6.5% normalized .
Q4 comp risk: very tough weather comparison from Helene and Milton in Q4 2024; management flagged persistent weather headwinds into Q4 despite strong sales momentum .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025 Actual	Q3 2025 Consensus
Revenue ($USD Millions)	$725.3	$772.6	$768.3	$776.24*
Diluted Adjusted EPS ($USD)	$1.67	$1.88	$1.72	$1.70371*
Adjusted EBITDA ($USD Millions)	$400.5	$444.8	$429.1	$431.27*
Adjusted EBITDA Margin (%)	55.2%	57.6%	55.8%	—

Segment revenue breakdown:

Segment Revenue ($USD Millions)	Q3 2024	Q2 2025	Q3 2025
Underwriting	$507	$550	$542
Claims	$218	$223	$226
Insurance Total	$725	$773	$768
OCC Growth (Q3 2025)	—	—	Underwriting: 5.8% ; Claims: 5.0% ; Total: 5.5%

KPIs and cash metrics:

KPI	Q3 2024	Q2 2025	Q3 2025
Subscription revenue mix (%)	—	—	84%
Free Cash Flow ($USD Millions)	$240.7	$188.7	$336.1
Net Cash from Operating Activities ($USD Millions)	$296.2	$244.5	$403.5
Adjusted EBITDA Margin (%)	55.2%	57.6%	55.8%
Share Repurchases ($USD Millions)	$340.0	$100.0	$100.1
Dividend per share ($USD)	$0.39	$0.45	$0.45

Guidance Changes

Metric	Period	Previous Guidance (July 2025)	Current Guidance (Oct 2025)	Change
Total Revenue	FY 2025	$3.09–$3.13B	$3.05–$3.08B	Lowered
Adjusted EBITDA	FY 2025	$1.70–$1.74B	$1.69–$1.72B	Lowered
Adjusted EBITDA Margin	FY 2025	55.0%–55.8%	55.0%–55.8%	Maintained
Diluted Adjusted EPS	FY 2025	$6.80–$7.00	$6.80–$7.00	Maintained
Tax Rate	FY 2025	23%–25%	23%–25%	Maintained
Capital Expenditures	FY 2025	$245–$265M	$245–$265M	Maintained
Fixed Asset D&A	FY 2025	$250–$270M	$250–$270M	Maintained
Intangible Amortization	FY 2025	$65M	$65M	Maintained
Interest Expense	FY 2025	$190–$210M	$165–$185M	Lowered
Dividend per Share	FY 2025	$1.80	$1.80	Maintained

Context: AccuLynx contribution removed from 2025 due to FTC delay; lower interest expense reflects yield on $1.5B senior notes proceeds raised in Q3 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2025)	Trend
AI/technology initiatives	Core Lines Reimagine; Synergy Studio demo; growing ecosystem; margin expansion from efficiency	Exact Expert >40 clients; launch of Exact AI; Savviar adoption; AI enhancing CAT models	Accelerating adoption/visibility
Weather/transactional exposure	Active SCS tail and modest weather benefit in PES in early 2025	Exceptionally light weather; transactional -8.8% OCC; PCS/NOAA declines	Headwind intensified in Q3
Pricing realization	Strong price capture in forms/rules/loss costs and broader solutions	Continued realization via reimagined modules; early indication center; contract expansions	Sustained
Regulatory/legal	Wildfire model engagement with CA DOI (Q1)	FTC Second Request on AccuLynx; operating independently until approval	New overhang
M&A posture	Symplitium acquisition; active pipeline focus on value-add	Focused on AccuLynx and closed InsurancePay; capacity monitored but execution-first	Execution focus
Macro/tariffs	Limited direct exposure; potential claims cost impacts; marketing sensitivity	Continued monitoring; no material Verisk financial exposure noted	Stable monitoring

Management Commentary

CEO: “Verisk Analytics delivered organic constant currency revenue growth of 5.5%, driven by strong subscription revenue growth of 8.7%... Despite the transactional revenue impact, we delivered 8.8% OCC adjusted EBITDA growth with expanded EBITDA margin of 55.8%.” .
CFO: “We did experience temporary factors… historically low level of weather activity… and the reduction in a government contract… impact of approximately 1% to overall Verisk OCC revenue growth in the quarter.” .
CFO: “On a reported basis, net cash from operating activities increased 36% to $404 million, while free cash flow rose 40% to $336 million.” .
Release: “Pending AccuLynx acquisition subject to a Second Request from the FTC…” .
CFO: “We… issued $1.5 billion in senior notes to finance the announced acquisition of AccuLynx… we now expect net interest expense to be in the range of $165 to $185 million.” .

Q&A Highlights

AccuLynx/ServiceTitan: Management is working “collaboratively and expeditiously” with FTC; ServiceTitan is a partner on Exactware integration, not necessarily the “main competitor” to AccuLynx .
AI competitive landscape: Startups lack proprietary insurance data and domain expertise needed to scale; Verisk positions as partner with curated content and ecosystem connectivity .
Weather headwinds into Q4: Expect tough comp from Hurricanes Helene/Milton; Q3 weather was exceptionally light vs typical severe convective storm season .
Free cash flow conversion: Normalized FCF growth roughly in line with EBITDA growth; ERP/collections improvements lowering DSOs .
Auto personal lines: Competitive pressures persist; non-rate action opportunities less prominent as rate adequacy improved .

Estimates Context

Metric	Q1 2025 Estimate*	Q1 2025 Actual	Q2 2025 Estimate*	Q2 2025 Actual	Q3 2025 Estimate*	Q3 2025 Actual
Revenue ($USD Millions)	749.75	753.0	768.30	772.6	776.24	768.3
Primary EPS ($USD)	1.683	1.73	1.771	1.88	1.704	1.72
EBITDA ($USD Millions)	409.50	414.1	430.50	436.7	431.27	432.1

Note: Asterisked values are S&P Global consensus/actual retrieved via GetEstimates. Values retrieved from S&P Global.

Implication: Q3 showed a revenue miss vs consensus amid weather-driven transactional softness, while EPS/EBITDA were roughly in line to modest beats, consistent with strong subscription and margin discipline .

Key Takeaways for Investors

Subscription engine remains robust (84% mix; +8.7% OCC), underpinning margins despite transactional volatility; this supports medium-term EPS durability .
Expect near-term noise: Q4 faces tough hurricane comps; revenue trajectory should normalize as weather reverts and subscription conversions reduce variability .
Regulatory overhang on AccuLynx (FTC Second Request) delays benefits into 2026; core thesis intact per management and current guidance removal clarifies 2025 baseline .
Cash return capacity is strong: Q3 FCF +40% YoY; dividend raised 15% YoY; $1.2B buyback capacity—provides downside support and optionality .
AI adoption is real and monetizable (Exact Expert/Exact AI upsells), enhancing product stickiness and price realization—watch for expanding contributory datasets and regulator tools uptake .
Interest expense outlook improved (lowered to $165–$185M) due to yields on note proceeds, partly offsetting higher balances—EPS guidance maintained .
Medium-term: Margin discipline plus AI-enabled product investments (Synergy Studio, Core Lines Reimagine) reinforce 6–8% organic growth framework despite quarterly variability .

Verisk Analytics, Inc. (VRSK)·Q3 2025 Earnings Summary