📢 Earnings Summary — VRSK

Verisk delivered solid Q3 results anchored by strong subscription growth and margin expansion, offset by weather-driven transactional softness. OCC revenue rose 5.5% with subscriptions up 8.7%, and adjusted EBITDA grew 8.8% with a 55.8% margin. Management emphasized accelerating client adoption of AI-enabled solutions, expanding hosted relationships, and growing contributory datasets, driving a robust pipeline and record 2025 sales trajectory. Weather and a reduced government contract temporarily trimmed growth by about one point, and Q4 faces a difficult weather comparison. The company issued $1.5B in senior notes and noted higher interest expense, while the AccuLynx acquisition faces an FTC second request and is excluded from 2025 guidance. Overall tone is constructive on long-term growth and margin prospects, with near-term caution around weather variability and regulatory timing.

📈 Growth Highlights

• Organic constant currency (OCC) revenue up 5.5% (Underwriting +5.8%, Claims +5.0%).
• Subscription revenue (84% of total) grew 8.7% OCC, comping on 9.1% in prior-year quarter.
• OCC adjusted EBITDA up 8.8%; total adjusted EBITDA margin 55.8% (+60 bps).
• Year-to-date: OCC revenue +7.1%, OCC adjusted EBITDA +9.4%, margin 56.3%.
• Double-digit subscription growth in Extreme Event Solutions, Specialty Business Solutions, and Life Solutions.

🔨 Business Development

• AI-enabled XactXpert deployed with 40+ clients (6 of top 10 carriers); YTD sales >2x original quotas.
• Launched XactAI GenAI photo tagging in month of call; 273 users including a top-10 carrier.
• AI query tools for ClaimSearch and SavvyR for regulators; about half of 30 SavvyR states signed on.
• Core Lines Reimagine: 3 new modules launched in Q3, including Indication Center (delivers key rating elements ~2 months sooner); on track for 20 releases in 2025.
• Growing contributory datasets: +10 new statistical data contributors YTD; Digital Media Forensics with 106 contributors (5 of top 10 carriers) and 600M+ images.
• Excess & Surplus (E&S) data initiative securing commitments and data representing billions in premium.
• Expanding hosted contracts and new logos in Extreme Event Solutions ahead of SaaS transition (Verisk Synergy Studio).
• Strong industry engagement: 40 strategic client meetings; elevated C-suite dialogue expanding pipeline; 2025 on track to be strongest sales year with teams exceeding quota for second straight year.

💵 Financial Performance

• GAAP revenue $768M (+5.9% YoY).
• GAAP net income $226M (+2.5% YoY); diluted GAAP EPS $1.61 (+5% YoY), aided by operating leverage and lower average share count.
• Transactional revenue declined 8.8% OCC (primarily Property Estimating Solutions due to very low weather activity).
• Temporary headwinds reduced OCC revenue growth by ~1%: historically low weather-driven claims volumes and a reduced government contract.
• NOAA Q3 weather events down 18% YoY and 31% vs 5-year average; PCS data shows event frequency -30% and severity -78% YoY; lowest U.S. storm quarter since 2017.
• Personal Lines Auto softness persists due to competitive pressures; conversions to subscriptions also reduced transactional revenue.
• Net interest expense $42M (vs $32M prior year) on higher debt and rates, partly offset by higher interest income.

🏦 Capital & Funding

• Issued $1.5B in senior notes during the quarter to capitalize on favorable bond market pricing.
• Higher net interest expense due to higher debt balances and rates.
• Lower average share count contributed to EPS growth.
• AccuLynx acquisition under FTC second request; no material 2025 contribution included in guidance; ongoing engagement with FTC.

🧠 Operations & Strategy

• Increasing subscription mix in Property Estimating Solutions to reduce weather-driven variability.
• Cost discipline and Global Talent Optimization supporting margin expansion while self-funding tech investments.
• Ongoing large-scale tech programs: cloud migration, ERP, Core Lines Reimagine, AI across business units.
• AI embedded in modeling (Extreme Events uses deep learning to debias climate model outputs and GenAI for local impacts).
• Ecosystem integrations (Whitespace and Xactware) prioritized to drive client efficiency and data quality.
• Strong client collaboration on data architecture, governance, and AI alignment; growing data contributions across lines.

🌍 Market Outlook

• Management views weather and government contract impacts as temporary; remains confident in long-term targets for 2025, 2026 and beyond.
• Q4 faces tough weather comparison due to prior-year hurricanes Helene and Milton.
• Clients show high interest in AI enhancements and multi-partner integrations; willingness to increase data contributions.
• AccuLynx timing uncertain due to FTC review; no 2025 benefit expected.
• Pipeline robust; 2025 pacing toward strongest sales year on record.

⚠ Risks & Headwinds

• Exceptionally low weather activity reduced claims volumes and transactional revenue.
• Reduced government contract weighed on growth in the quarter.
• Personal Lines Auto competitive pressures.
• Higher interest expense from increased debt and rates.
• Tough Q4 comparison given prior-year hurricane activity.
• Regulatory delay: FTC second request on AccuLynx creates timing uncertainty and removes 2025 contribution.

AI-generated earnings recap sourced from company results & conference call observations. Not investment advice — verify with official filings.