Verisk shares slide despite guidance raise as quarterly earnings fall

(Alliance News) - Verisk Analytics Inc shares fell on Wednesday following a weaker second quarter, though the company raised its revenue outlook and inked a new USD2.35 billion acquisition.

Shares in the Jersey City, New Jersey-based data analytics and risk assessment firm traded 5.8% lower at USD276.93 in New York on Wednesday.

In the three months to June 30, net income slipped 18% on-year to USD253 million from USD308 million, or 16% to USD1.81 from USD2.15 on a diluted per-share basis. Diluted adjusted earnings per share of USD1.88 was 6.1% higher than Yahoo-cited consensus.

Second quarter revenue was USD773 million up 7.8% on-year from USD717 million. Of this, underwriting revenue climbed 8.3% to 550 million, while claims revenue increased 6.6% to USD223 million.

Chief Executive Officer Lee Shavel commented: "Verisk delivered another strong quarter of broad-based growth in the second quarter and we are raising our revenue and adjusted Ebitda outlook for the full year 2025. Our operational focus over the past three years has delivered value for our clients and consistent financial results for our investors.

"We've also demonstrated the continued evolution of our business from industry utility to data analytics specialist to integrated technology network serving the global insurance industry. And now 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 to enhance value for the industry and Verisk."

Adjusted earnings before interest, taxes, depreciation, and amortisation rose 12% to USD445 million. Adjusted Ebitda margin was 57.6% compared to 55.4% a year ago. Free Cash Flow climbed 23% to USD188.7 million from USD153.9 million.

Chief Financial Officer Elizabeth Mann said: "Verisk delivered continued strong operating momentum in the second quarter, underscored by 7.9% OCC revenue growth and solid operating leverage, leading to 9.7% adjusted Ebitda growth on an OCC basis.

"We are investing our capital in core operations and in acquisitions of strong and strategic businesses where we can create value with attractive returns consistent with our capital discipline, while also returning capital to shareholders. We are excited about the growth opportunities ahead and have confidence in delivering on our strategy and value creation."

For 2025, Verisk has raised revenue guidance to between USD3.09 billion and USD3.13 billion from USD3.03 billion to USD3.08 billion. This is 1% higher than Yahoo-cited consensus.

It now sees adjusted Ebita of USD1.70 billion to USD1.74 billion compared to USD1.67 billion to USD1.72 billion projected initially.

However, it has narrowed the diluted adjusted EPS outlook to between USD6.80 and USD7.00 from USD6.80 to USD7.10.

The company on Wednesday announced a USD2.35 billion acquisition of AccuLynx. The company is an SaaS platform for end-to-end business management in the residential property contractor space.

Verisk expects the deal to be additive to revenue and adjusted Ebitda margin and accretive to adjusted EPS by year-end 2026.

It follows the USD162.5 million acquisition of SuranceBay announced last week. The company is a provider of producer licensing, onboarding, appointment and compliance solutions for the life and annuity industry.

By Aidan Lane, Alliance News reporter

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