Crawford & Company Q1 Earnings Call Highlights

Key Points

• Crawford reported Q1 revenue of $309.5 million and GAAP net income of $4.9 million, with consolidated operating earnings down 23.2% year‑over‑year due to lower U.S. property claims activity and higher corporate costs; non‑GAAP diluted EPS fell to $0.16.
• By segment, U.S. Property & Casualty revenue declined 11.3% (loss of prior‑year hurricane revenue), Broadspire revenue rose ~1% but saw margin pressure from planned hiring and slow ramps, while International Operations grew revenue and delivered an 80% increase in operating earnings.
• Operating cash flow improved materially (up $17.2 million YoY) and free cash flow narrowed to negative $4.6 million; the company maintained a $0.075 quarterly dividend, repurchased >525,000 shares, and added $24 million of new business with management optimistic about pipeline and go‑to‑market changes.

Crawford & Company NYSE: CRD.A reported first-quarter 2026 results that reflected lower U.S. property claims activity amid “relatively benign weather conditions,” partially offset by growth in Broadspire and improved profitability in International Operations, according to management’s earnings call on May 5.

President and CEO W. Bruce Swain, Jr. said the company “executed well in the quarter despite weather-related headwinds in the U.S.” and emphasized that Crawford’s non-weather-dependent businesses posted year-over-year revenue growth. He added that management’s focus remains on strengthening the operating foundation and refining go-to-market efforts as the company works under a new two-division structure implemented at the start of 2026.

First-quarter results reflect lower U.S. property activity

Swain said first-quarter revenue was $309.5 million, down slightly from the prior-year period, as U.S. property claims activity continued to trend lower. Consolidated operating earnings fell 23.2% year over year, which Swain attributed to lower results in the U.S. Property and Casualty business and higher unallocated and corporate costs, “partially offset by improved operating earnings in International Operations.”

Chief Financial Officer Holly Boudreau reported GAAP net income attributable to shareholders of $4.9 million, down from $6.7 million a year earlier. GAAP diluted EPS was $0.10 for both CRDA and CRDB, compared with $0.13 in the prior-year quarter. On a non-GAAP basis, diluted EPS was $0.16 for both share classes, down from $0.21.

Boudreau said non-GAAP operating earnings totaled $13.7 million, or 4.4% of revenue, compared with $17.8 million, or 5.7%, in the year-ago period. Adjusted EBITDA was $22.4 million, or 7.2% of revenue, versus $26.8 million, or 8.6%, a year earlier.

Segment performance and the impact of weather

Under Crawford’s revised reporting structure, U.S. Property and Casualty represented 23% of first-quarter revenue, Broadspire 34%, and International Operations 43%, Boudreau said.

• U.S. Property and Casualty: Revenue declined 11.3% year over year, which Boudreau said reflected the absence of revenue tied to Hurricane Helene and Hurricane Milton that was recognized in the first quarter of 2025, alongside continued lower industry-wide property claims activity. Segment operating earnings fell $2.2 million, or 22.1%, and operating margin declined 150 basis points.
• Broadspire: Revenue rose 1% to $104.8 million. Boudreau said results reflected a “slow ramp for certain new client wins.” Segment operating earnings declined $1.1 million, or 9.4%, with margin down 120 basis points due to “planned hiring in anticipation of new business wins.”
• International Operations: Revenue increased 4.5% to $131.9 million, though Boudreau said it decreased 1.7% on a constant-currency basis due to foreign exchange impacts. Operating earnings rose $1.8 million, or 80%, and operating margin increased 120 basis points. Boudreau cited increased catastrophe-related claims events in Australia and Asia, and said Canada benefited from margin improvement tied to cost control initiatives begun in 2025.

Boudreau also provided additional context on weather-related activity, saying the first quarter saw a 16% decline in U.S. severe storm support compared to the prior year, translating into “a roughly 6% reduction in weather-related revenues” for Crawford. She added that weather-related revenues “remained stable on a year-over-year basis,” pointing to the company’s diversified business mix.

Cash flow, balance sheet, and capital return

Crawford reported operating cash flow of $3.3 million, which Swain said improved by $17.2 million year over year. Boudreau said free cash flow was negative $4.6 million in the quarter, improving from negative $23.2 million in the first quarter of 2025.

As of March 31, cash and cash equivalents totaled $54.5 million, down from $64.1 million at year-end 2025, while total receivables were $260.8 million, up $18.2 million from year-end. Total debt outstanding was $194.1 million, up $5 million from December 31, 2025, and net debt was approximately $140 million.

Boudreau said the company’s U.S. pension liability was $16.7 million, representing a funded ratio of 93.2%, and that Crawford made no discretionary contributions to its U.S. defined benefit plan in the quarter.

Swain said the company maintained its quarterly dividend and repurchased shares during the quarter. Boudreau reported a quarterly dividend of $0.075 per share and said Crawford repurchased more than 525,000 shares of CRDA and CRDB. As of March 31, approximately 1.6 million shares remained authorized under the existing repurchase program.

Pipeline, go-to-market changes, and business trends

Swain said Crawford added $24 million in “new and enhanced business” during the quarter and described pipeline activity as encouraging, with management focused on sharpening go-to-market execution. In response to questions, he said the strongest pipeline is within Broadspire, while pipeline momentum is also building in the U.S. Property and Casualty business. He said the $24 million in wins included “a mix of Broadspire wins,” some U.S. Property and Casualty wins, and “a nice win” in International Operations.

Addressing Broadspire’s performance, Swain said the company expects growth in 2026, noting that some new business had start dates later in the year. He also discussed an account loss that contributed to an 86% retention rate, calling it an “isolated item” tied to a customer’s relationship changes and not indicative of broader trends. He said that excluding that loss, retention would have been “93% or so.”

Swain also discussed claims trends in workers’ compensation, saying claim volumes were “pretty steady” year over year, while severity has been rising. “Severity certainly is going up,” he said, adding that Crawford is seeing that increase in its own book.

On the company’s sales approach, Swain said the U.S. operating realignment has unified the sales organization across Broadspire, U.S. loss adjusting, and networks, and that Crawford is hearing from customers that the company is “easier to engage and do business with.” He said the benefits of the changes are “just beginning to unfold.” International go-to-market efforts are “largely unchanged,” he added, though the company moved Canada into International Operations as part of the realignment.

Swain also pointed to recruiting and “acqui-hires” as a growth driver for Global Technical Services, saying the company has been bringing in teams that typically come with an existing book of business. He said the company is active in these efforts “across the globe” and views Global Technical Services as a key growth driver going forward.

During the Q&A, management also addressed unallocated corporate costs, with a response indicating that self-insurance expense increased by about $800,000 in the quarter and that no major increase was expected in coming quarters.

On the broader insurance market backdrop, Swain said there are “signs of loosening” in the U.S., with rates “continuing to grind down” and softening beginning to affect casualty lines as well as the excess and surplus market. He also noted that severe convective storms in March and April were generating claims activity that was “benefiting” Crawford.

Closing the call, Swain said Crawford’s first-quarter focus was on building resilience and ensuring the company is prepared “when claim volumes return,” adding that he believes the company is executing on the right priorities to create shareholder value.

About Crawford & Company NYSE: CRD.A

Crawford & Company provides claims management and outsourcing solutions to the risk management and insurance industry, and self-insured entities. The company's Crawford Claims Solutions segment offers claims management services related to property, casualty, and catastrophe losses caused by physical damage to commercial and residential real properties, and personal properties, as well as marine losses. It also offers services in the areas of field investigation, catastrophe, evaluation, and resolution of property and casualty insurance claims; and various on-demand inspection, verification, and other task specific field services for businesses and consumers through a mobile platform.

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