VRSK - Verisk Reports First-Quarter 2024 Financial Results

• Consolidated revenues were $704 million, up 8.0%, and up 6.9% on an organic constant currency (OCC) basis for the first quarter of 2024.

• Income from continuing operations was $219 million, up 12.9% for the first quarter of 2024. Adjusted EBITDA, a non-GAAP measure, was $380 million, up 11.8%, and up 10.6% on an OCC basis.

• Diluted GAAP earnings per share from continuing operations (diluted EPS) were $1.52 for the first quarter of 2024, up 19.7%. Diluted adjusted earnings per share (diluted adjusted EPS), a non-GAAP measure, were $1.63, up 26.4%.

• Net cash provided by operating activities was $372 million, up 1.9% and free cash flow, a non-GAAP measure, was $317 million, up 4.2% for the first quarter of 2024.

• We paid a cash dividend of 39 cents per share on March 29, 2024, and repurchased $200 million of our common shares during the first quarter of 2024. Our Board of Directors approved a cash dividend of 39 cents per share payable on June 28, 2024, an increase of 15% from 2023.

JERSEY CITY, N.J., May 01, 2024 (GLOBE NEWSWIRE) -- Verisk (Nasdaq: VRSK), a leading global data analytics and technology provider, today announced results for the first quarter ended March 31, 2024.

Lee Shavel, president and CEO, Verisk: "I am very pleased to share that 2024 is off to a solid start at Verisk. We are executing our growth strategy with our powerful economic model that creates value through investment in data, new technologies, and strategic engagement with our clients across the entire insurance ecosystem."

Elizabeth Mann, CFO, Verisk: "During the first quarter, Verisk delivered solid revenue and adjusted EBITDA growth resulting in healthy margin expansion and strong double digit EPS growth. We continue to invest our capital behind our highest return on invested capital opportunities while returning excess cash to shareholders. We remain confident in our ability to deliver on our growth strategy and our margin expansion commitments."

Summary of Results (GAAP and Non-GAAP) from Continuing Operations
(in millions, except per share amounts)
Note: Adjusted EBITDA, diluted adjusted EPS, and free cash flow are non-GAAP measures.

Revenues from Continuing Operations

Consolidated and OCC revenues increased 8.0% and 6.9%, respectively, due to strong growth in underwriting and modest growth in claims within our Insurance segment.

Revenues and Revenue Growth by Segment
(in millions)
Note: OCC revenue growth is a non-GAAP measure.

Insurance segment revenues grew 8.0% in the first quarter and 6.9% on an OCC basis.

• Underwriting revenues increased 8.2% in the quarter and 7.8% on an OCC basis, primarily due to our forms, rules and loss cost services, underwriting data solutions, and extreme event solutions. In addition, life insurance and specialty business solutions contributed to the growth and were partially offset by continued weakness within our marketing solutions.

• Claims revenues grew 7.6% in the quarter and 4.7% on an OCC basis, primarily due to solid growth in anti-fraud solutions and international solutions. Property estimating solutions also contributed to growth.

Income and Adjusted EBITDA from Continuing Operations

During first-quarter 2024, income from continuing operations was $219 million, an increase of 12.9%. The increase in income from continuing operations was primarily due to growth in operating income for insurance and a reduction in our effective tax rate in the current year. Adjusted EBITDA increased 11.8%, and 10.6% on an OCC basis, primarily due to strong revenue growth and cost discipline.

EBITDA and Adjusted EBITDA by Segment
(in millions)
Note: Consolidated EBITDA and Adjusted EBITDA are non-GAAP measures. Margin is calculated as a percentage of revenues. See "Non-GAAP Reconciliations" below for a reconciliation to the nearest GAAP measure. All OCC figures exclude results from the disposition of the Energy business.

Earnings Per Share and Diluted Adjusted Earnings Per Share

Diluted EPS attributable to Verisk increased 19.7% to $1.52 for the first quarter of 2024. Diluted adjusted EPS increased 26.4% to $1.63 for the first quarter of 2024, which reflects strong revenue and profit growth, a lower effective tax rate and a lower average share count due to our accelerated share repurchase program.

Cash Flow and Free Cash Flow

Net cash provided by operating activities was $372 million for the first quarter of 2024, up 1.9%, and free cash flow was $317 million, up 4.2%.

Dividend

On March 29, 2024, we paid a cash dividend of 39 cents per share of common stock issued and outstanding to the holders of record as of March 15, 2024.

On April 24, 2024, our Board of Directors approved a cash dividend of 39 cents per share of common stock issued and outstanding. The dividend is payable on June 28, 2024, to holders of record as of June 15, 2024.

Share Repurchases

During the first quarter of 2024, we initiated a $200 million Accelerated Share Repurchase program, which was completed in April 2024, resulting in a repurchase of 862,332 shares, at an average price of $231.93. As of March 31, 2024, we had $1,442 million remaining under our share repurchase authorization.

2024 Financial Guidance

The company reiterates its financial outlook for fiscal 2024 as follows:

Conference Call

Our management team will host a live audio webcast to discuss the financial results and business highlights on Wednesday, May 1, 2024, at 8:30 a.m. EDT (5:30 a.m. PDT, 12:30 p.m. GMT). All interested parties are invited to listen to the live event via webcast on our investor website at http://investor.verisk.com . The discussion will also be available through dial-in number 888-660-6191 for U.S./Canada participants or 929-203-1913 for international participants.

A replay of the webcast will be available for 30 days on our investor website and through the conference call number 800-770-2030 for U.S./Canada participants or 647-362-9199 for international participants using Conference ID #4026897.

About Verisk

Verisk is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong.

Verisk is traded on the Nasdaq exchange and is a part of the S&P 500 Index and the Nasdaq-100 Index.

For more information, please visit www.verisk.com .

Contact:

Investor Relations
Stacey Brodbar
Head of Investor Relations
Verisk
201-469-4327
IR@verisk.com

Media
Alberto Canal
Verisk Public Relations
201-469-2618
Alberto.Canal@verisk.com

Forward-Looking Statements

This release contains forward-looking statements, including those related to our financial guidance. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. This includes, but is not limited to, our expectation and ability to pay a cash dividend on our common stock in the future, subject to the determination by our Board of Directors and based on an evaluation of our earnings, financial condition and requirements, business conditions, capital allocation determinations, and other factors, risks, and uncertainties. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “target,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements, because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance or achievements.

Other factors that could materially affect actual results, levels of activity, performance, or achievements can be found in our quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K filed with the Securities and Exchange Commission. If any of these risks or uncertainties materialize or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement in this release reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise except as required by law.

Notes Regarding the Use of Non-GAAP Financial Measures

We have provided certain non-GAAP financial information as supplemental information regarding our operating results. These measures are not in accordance with, or an alternative for, U.S. GAAP and may be different from non-GAAP measures reported by other companies. We believe that our presentation of non-GAAP measures provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. In addition, our management uses these measures for reviewing our financial results, for budgeting and planning purposes, and for evaluating the performance of senior management.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Expenses: EBITDA represents GAAP net income adjusted for (i) depreciation and amortization of fixed assets; (ii) amortization of intangible assets; (iii) interest expense, net; and (iv) provision for income taxes. Adjusted EBITDA represents EBITDA adjusted for acquisition-related costs (earn-outs), gain/loss from dispositions (which includes businesses held for sale), and nonrecurring gain/loss. Adjusted EBITDA expenses represent adjusted EBITDA net of revenues. We believe these measures are useful and meaningful because they help us allocate resources, make business decisions, allow for greater transparency regarding our operating performance, and facilitate period-to-period comparison.

Adjusted Net Income and Diluted Adjusted EPS: Adjusted net income represents GAAP net income adjusted for (i) amortization of intangible assets, net of tax; (ii) acquisition-related costs (earn-outs), net of tax; (iii) gain/loss from dispositions (which includes businesses held for sale), net of tax; and (iv) nonrecurring gain/loss, net of tax. Diluted adjusted EPS represents adjusted net income divided by weighted-average diluted shares. We believe these measures are useful and meaningful because they allow evaluation of the after-tax profitability of our results excluding the after-tax effect of acquisition-related costs and nonrecurring items.

Free Cash Flow: Free cash flow represents net cash provided by operating activities determined in accordance with GAAP minus payments for capital expenditures. We believe free cash flow is an important measure of the recurring cash generated by our operations that may be available to repay debt obligations, repurchase our stock, invest in future growth through new business development activities, or make acquisitions.

Organic: Organic is defined as operating results excluding the effect of recent acquisitions and dispositions (which include businesses held for sale), and nonrecurring gain/loss associated with cost-based and equity-method investments that have occurred over the past year. An acquisition is included as organic at the beginning of the calendar quarter that occurs subsequent to the one-year anniversary of the acquisition date. Once an acquisition is included in its current-period organic base, its comparable prior-year-period operating results are also included to calculate organic growth. A disposition (which includes a business held for sale) is excluded from organic at the beginning of the calendar quarter in which the disposition occurs (or when a business meets the held-for-sale criteria under U.S. GAAP). Once a disposition is excluded from its current-period organic base, its comparable prior-year-period operating results are also excluded to calculate organic growth. We believe the organic presentation enables investors to assess the growth of the business without the impact of recent acquisitions for which there is no prior-year comparison and the impact of recent dispositions, for which results are removed from all prior periods presented to allow for comparability.

Organic Constant Currency (OCC) Growth Rate: Our operating results, such as, but not limited to, revenue and adjusted EBITDA, reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which we transact changes in value over time compared with the U.S. dollar. Accordingly, we present certain constant currency financial information to assess how we performed excluding the impact of foreign currency exchange rate fluctuations. We calculate constant currency by translating comparable prior-year-period results at the currency exchange rates used in the current period. We believe organic constant currency is a useful and meaningful measure to enhance investors’ understanding of the continuing operating performance of our business and to facilitate the comparison of period-to-period performance because it excludes the impact of foreign exchange rate movements, acquisitions, and dispositions.

See page 10 for a reconciliation of consolidated adjusted EBITDA and a segment results summary and a reconciliation of adjusted EBITDA. See page 10 for a reconciliation of segment adjusted EBITDA margin, a reconciliation of adjusted EBITDA expenses, and a reconciliation of diluted adjusted EPS. See page 11 for a reconciliation of net cash provided by operating activities to free cash flow.

We are not able to provide a reconciliation of projected Adjusted EBITDA, Adjusted EBITDA margin, and Diluted Adjusted EPS to the most directly comparable expected GAAP results because of the unreasonable effort and high unpredictability of estimating certain items that are excluded from non-GAAP Adjusted EBITDA, Adjusted EBITDA margin, and Diluted Adjusted EPS, including, for example, tax consequences, acquisition-related costs, gain/loss from dispositions and other non-recurring expenses, the effect of which may be significant.

Attached Financial Statements

Please refer to the full Form 10-Q filing for the complete financial statements and related notes.

VERISK ANALYTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of March 31, 2024 and December 31, 2023

VERISK ANALYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended March 31, 2024 and 2023

VERISK ANALYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 2024 and 2023

Non-GAAP Reconciliations

Consolidated EBITDA, Adjusted EBITDA and Organic Adjusted EBITDA Reconciliation from Continuing Operations
(in millions)
Note: EBITDA, adjusted EBITDA, and organic adjusted EBITDA are non-GAAP measures. Margin is calculated as a percentage of revenues.

Segment Results Summary, EBITDA and Adjusted EBITDA Reconciliation
(in millions)
Note: Organic revenues, EBITDA, adjusted EBITDA, and organic adjusted EBITDA are non-GAAP measures.

Segment Adjusted EBITDA Margin Reconciliation
Note: Segment adjusted EBITDA margin is calculated as a percentage of segment revenues.

Consolidated Adjusted EBITDA Expense Reconciliation
(in millions)
Note: Adjusted EBITDA expenses are a non-GAAP measure.

Diluted Adjusted EPS Reconciliation
(in millions, except per share amounts)
Note: Diluted adjusted EPS is a non-GAAP measure.

Free Cash Flow Reconciliation
(in millions)
Note: Free cash flow is a non-GAAP measure.

Investor Relations Stacey BrodbarHead of Investor RelationsVerisk 201-469-4327 IR@verisk.comMediaAlberto CanalVerisk Public Relations201-469-2618Alberto.Canal@verisk.com