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>>> Verisk Reports First-Quarter 2023 Financial Results


Verisk Analytics, Inc.

May 3, 2023


https://finance.yahoo.com/news/verisk-reports-first-quarter-2023-111500248.html


Consolidated revenues were $651.6 million, up 1.2%, and up 9.8% on an organic constant currency (OCC) basis for the first quarter of 2023. The modest growth in our consolidated revenues was due to the sale of our environmental health and safety business (“3E”) and Financial Services segment, both of which did not qualify as discontinued operations. As such, results from 3E and our Financial Services segment are included in our prior year consolidated financials. The increase in our OCC revenue growth reflects strong growth in underwriting & rating and claims.

Income from continuing operations was $194.4 million, down 60.1% for the first quarter of 2023. Adjusted EBITDA, a non-GAAP measure, was $340.3 million, up 11.5%, and up 15.7% on an OCC basis. The decrease in income from continuing operations was primarily due to the sale of 3E and our Financial Services segment in the prior year, which resulted in a net gain in other operating income. Adjusted EBITDA growth reflects the contribution from strong revenue growth combined with cost discipline across our businesses.

Diluted GAAP earnings per share from continuing operations (diluted EPS) were $1.27 for the first quarter of 2023, down 57.8%. Diluted adjusted earnings per share (diluted adjusted EPS), a non-GAAP measure, were $1.29, up 16.2%.

Net cash provided by operating activities was $365.3 million, down 8.6% and free cash flow, a non-GAAP measure, was $304.1 million, down 10.5% for the first quarter of 2023. The decline in our operating cash flows and free cash flows was primarily due to the disposition of our Energy and Specialized Markets and Financial Services segments.

We paid a cash dividend of 34 cents per share on March 31, 2023. Our Board of Directors approved a cash dividend of 34 cents per share payable on June 30, 2023.

We entered into and fully funded a $2.5 billion accelerated share repurchase program in the first quarter of 2023.

On February 1, 2023, we sold our Energy business, Wood Mackenzie, to Veritas Capital for $3.1 billion in net cash consideration plus future additional contingent consideration of up to $200 million. As a result of this sale, we recognized a loss of $128.4 million that has been recorded within loss from discontinued operations.


JERSEY CITY, N.J., May 03, 2023 (GLOBE NEWSWIRE) -- Verisk (Nasdaq: VRSK), a leading global data analytics provider, today announced results for the first quarter ended March 31, 2023.

"We are pleased that 2023 is off to a very strong start at Verisk. Our first-quarter results are a demonstration of our sharpened focus, operating discipline, and results-oriented culture," said Lee Shavel, president and CEO, Verisk. "We are elevating the dialogue with our clients and leveraging our scale and centrality to solve the insurance industry's biggest problems and improve our client's performance. We have the right team and strategy in place to deliver value for our shareholders."

Elizabeth Mann, CFO, said, "Verisk delivered strong revenue and EBITDA growth, demonstrating broad-based growth across most of our businesses. That in turn generated solid operating leverage. We are focused on our commitments to deliver revenue growth and margin expansion and we remain confident in our ability to achieve our stated goals for 2023 and the longer term."

Summary of Results (GAAP and Non-GAAP)
(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 revenues increased a modest 1.2% primarily due to the sale of 3E and our Financial Services segment in the prior year. OCC revenues increased 9.8% primarily due to strong broad-based growth across underwriting & rating and claims.

Insurance segment revenues grew 11.1% in the first quarter and 9.8% on an OCC basis.

Underwriting & rating revenues increased 10.7% in the quarter and 9.1% on an OCC basis, resulting primarily from strong growth across our core underwriting solutions, extreme events solutions, and life solutions.

Claims revenues grew 12.1% in the quarter and 11.4% on an OCC basis. Growth was broad-based with strong results recorded in property estimating, anti-fraud and international solutions.

There was no Energy and Specialized Markets segment revenue in the quarter. We closed on the sale of the Energy business on February 1, 2023 and accounted for it as discontinued operations. We closed on the sale of 3E on March 11, 2022.

There was no Financial Services segment revenue in the quarter as we closed on its sale on April 8, 2022.

Net Income and Adjusted EBITDA from Continuing Operations

During first-quarter 2023, net income from continuing operations was $194.4 million, a decrease of 60.1%. The decrease was primarily due to the sale of 3E and our Financial Services segment in the prior year, which did not qualify as discontinued operations. As a result of these sales, we recognized a net gain within "Other operating income, net" of $377.1 million. Adjusted EBITDA increased 11.5%, and 15.7% on an OCC basis, primarily due to strong revenue growth and cost discipline.

EBITDA and Adjusted EBITDA by Segment
(in millions)

Note: 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 recent dispositions, namely 3E, Energy, and Verisk Financial Services. Segment-level adjusted EBITDA margins for 2023 reflect a higher level of corporate allocations resulting from recent dispositions and the impact of foreign currency fluctuations.

Earnings Per Share and Diluted Adjusted Earnings Per Share

Diluted EPS attributable to Verisk decreased 57.8% to $1.27 for the first quarter of 2023.

Diluted adjusted EPS increased 16.2% to $1.29 for the first quarter of 2023.

Cash Flow and Free Cash Flow

Net cash provided by operating activities was $365.3 million for the first quarter of 2023, down 8.6%, and free cash flow was $304.1 million, down 10.5%. The decrease in operating cash flows was primarily related to the dispositions within our former Energy and Specialized Markets and Financial Services segments, including one-time transaction fees related to the sale of our Energy business, partially offset by an increase in operating profit in our Insurance segment.

Dividend

On March 31, 2023, we paid a cash dividend of 34 cents per share of common stock issued and outstanding to the holders of record as of March 15, 2023.

On April 25, 2023, our Board of Directors approved a cash dividend of 34 cents per share of common stock issued and outstanding, payable on June 30, 2023, to holders of record as of June 15, 2023.

Share Repurchases

In first-quarter 2023, we entered into and fully funded an accelerated share repurchase program of $2,500 million and received an initial delivery of 10.7 million shares at an average price of $187.70. As of March 31, 2023, we had $941.3 million remaining under our share repurchase authorization.

2023 Financial Guidance

Our guidance for 2023 remains unchanged with revenue in the range of $2.59-$2.63 billion, adjusted EBITDA between $1.37-$1.42 billion, adjusted EBITDA margin in the 53%-54% range and adjusted EPS in the range of $5.20-$5.50. A complete listing of all guidance measures can be found in the earnings slide deck, which has been posted to the investor section of our website verisk.com. The contents of our website shall not be deemed to be incorporated by reference herein.

Conference Call

Our management team will host a live audio webcast to discuss the financial results and business highlights on Wednesday, May 3, 2023, at 8:30 a.m. EST (5:30 a.m. PT, 1:30 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 1-888-660-6191 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 1-888-660-6191 for U.S./Canada participants or 1-929-203-1913 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.

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