Verisk Analytics Q1 Earnings Call Highlights

Key Points

• Verisk reported Q1 revenue of $783 million (GAAP, +4%) and organic constant-currency revenue growth of 4.7%, with diluted GAAP EPS of $1.73 (+5%) and adjusted EBITDA margin expanding to 55.9% despite short-term headwinds from low weather activity, tougher renewal comps, and a federal contract disruption.
• Subscription strength remains core—subscription revenue was 84% of total and rose ~7% on an OCC basis—while transactional revenue declined 6.1%; product momentum includes double-digit growth in catastrophe and risk solutions, progress on the Synergy Studio platform, and increasing client adoption of AI-driven tools like Digital Media Forensics.
• Management reaffirmed full-year 2026 guidance and continued capital returns, executing a $1.5 billion ASR funded by $1 billion of notes and a $500 million term loan (leverage ~2.4x), repurchasing shares, and raising the quarterly dividend 11%, with guidance showing revenue $3.19–$3.24B and adjusted EPS $7.45–$7.75.

Verisk Analytics NASDAQ: VRSK reported first-quarter 2026 results that management said were modestly ahead of internal expectations despite several short-term headwinds tied to weather-related activity, renewal comparisons, and a disruption in a federal contract. Executives also spent significant time discussing how clients are incorporating artificial intelligence into underwriting and claims workflows and what that means for Verisk’s product strategy and commercialization.

First-quarter results: revenue growth and margin expansion

On a GAAP basis, CFO Elizabeth Mann said first-quarter revenue was $783 million, up 4% from the prior year. Net income increased 1% to $234 million, and diluted GAAP EPS rose 5% to $1.73. Mann attributed the increase in earnings primarily to “solid operational performance and a lower average share count,” partially offset by higher interest expense and a higher effective tax rate.

On an organic constant currency (OCC) basis, Mann said revenue grew 4.7%, including 5.3% growth in underwriting and 3.4% growth in claims. CEO Lee Shavel said Verisk’s performance reflected previously discussed factors including “the carryover impact of the very low weather activity, tougher compares from strong renewals last year, and a work stoppage in a federal government contract.”

Adjusted EBITDA grew 5.9% on an OCC basis, and total adjusted EBITDA margin was 55.9%, up 60 basis points year over year. Mann said margin expansion reflected “operational leverage” and “cost discipline, including global talent optimization,” offset partly by increased investment in AI technologies.

Subscription strength offsets transactional softness

Mann emphasized the durability of Verisk’s subscription model, noting that subscription revenue represented 84% of total revenue in the quarter and increased 7% on an OCC basis. She said that growth compounded on a 10.6% OCC increase in the first quarter of the prior year, while also reflecting the impact of lower weather events and the federal contract work stoppage.

In the underwriting-focused forms, rules, and loss costs business, Mann said Verisk is seeing “strong price realization in renewals” as clients adopt enhancements delivered through the company’s Reimagine initiative. She said Verisk released seven new client-facing modules in the first quarter and “anticipate[s] a total of 25 releases for 2026.”

Transactional revenue, which comprised 16% of total revenue, declined 6.1% on an OCC basis. Mann said the “primary driver” was lower volumes in property and restoration solutions due to low weather activity, and she also cited softness in personal lines auto and lower overage revenues in the property business. She noted that the first quarter of 2025 included claims activity associated with Hurricanes Helene and Milton.

Product and data initiatives: catastrophe, fraud, life, and contributory data

Mann highlighted growth in catastrophe and risk solutions, describing “another quarter of double-digit growth” driven by expansions with existing clients, competitive wins, and new logos, including clients new to catastrophe modeling. She also referenced “key multi-year contract expansions” with two top carriers and said Verisk saw wins in casualty modeling, where she described Verisk as the provider of “the industry's first probabilistic casualty catastrophe model.”

Client interest is also building around Verisk Synergy Studio, which Mann called the company’s next-generation catastrophe risk platform. She said live previews have been “well-received,” and the updated U.S. Tropical Cyclone Model and production release of Synergy Studio “remain on track,” with clients expanding hosting relationships in preparation for launch.

In anti-fraud, Mann said Verisk is driving “strong value realization in renewals” based on enhanced data insights and an expanded ecosystem strategy. She pointed to adoption of newer solutions such as Claims Coverage Identifier and Digital Media Forensics, which Shavel described as an AI-powered tool that automates anomaly detection in photos and documents. Shavel said Verisk onboarded the “sixth top 10 carrier” to Digital Media Forensics in the quarter.

Mann also discussed ongoing double-digit organic growth in Verisk’s life business, driven by new wins and expansions. She said the company recently closed its “first combined FAST SuranceBay deal with a major life and annuity carrier,” which she said demonstrated “synergistic value creation” from combining the two businesses.

On data contributions, Mann said Verisk continues to onboard new contributors, including “four new carriers” in core lines and contributions in its excess and surplus lines (E&S) program representing “more than $15 billion in premium.” In the Q&A, Saurabh Khemka said engagement remains strong among both large and small carriers, adding that the four carriers referenced were “part of that overall 100 new contributors that we mentioned as we launched Reimagined, and they're just kind of flowing through our systems now.”

AI strategy: client demand, contracting complexity, and monetization

Shavel said Verisk is increasing the pace of innovation and embedding AI into workflows across underwriting, claims, and related solutions. He described strong engagement at recent client events, including the Verisk Insurance Conference (VIC) and the Insurance Fraud Management Conference, which he said drew record attendance and included 23 AI-focused sessions.

Shavel also cited an AM Best report that identified data readiness as insurers’ top impediment to AI implementation. He said Verisk is being pulled into client AI planning discussions as a “co-development partner,” reflecting client recognition that AI requires “deep industry knowledge and relevant data sets.”

Analysts asked about how AI could affect sales cycles and monetization. Shavel acknowledged “extended sales cycle” dynamics in some cases due to “more complex contracting to incorporate AI governance and compliance.” He said contract negotiations increasingly require additional work around intellectual property, privacy, and governance, but added Verisk’s experience in data governance and its trusted role with clients should help.

On monetization, Shavel told Morgan Stanley’s Toni Kaplan that Verisk expects opportunities to be rooted in enabling AI applications with “structured, clean, industry-wide” data, with monetization coming from “realizing more value through our pricing arrangements” and opening up “new specific data utilization for AI applications.” He said the model will evolve as the industry gains experience.

Shavel said Verisk’s approach is to stay flexible, supporting different client preferences—ranging from clients working with frontier model providers to those building internal tools to those adopting Verisk-built AI functionality. He also said Verisk’s investment in cloud migration, standardization, and more API-driven access has helped it adapt data sets to AI use cases, including “Model Context Protocol” applications for agentic tools.

Separately, Shavel described a “one-off specific” project in which Verisk won a competitive RFP to partner with a global insurer to support the creation of a “next generation digitally native underwriting entity.” He said Verisk will contribute data, actuarial, and analytics capabilities alongside AI-driven platforms and marketplace solutions to co-develop an operating model, and added he could see similar work expanding to more clients over time.

Capital return, leverage, and reaffirmed 2026 guidance

Mann said net interest expense was $43 million, up from $36 million a year ago, due to higher debt balances and interest rates. During the quarter, Verisk issued $1 billion of senior notes and entered into a $500 million term loan to fund a previously announced $1.5 billion accelerated share repurchase (ASR) program. Mann said $250 million remained outstanding on the term loan at quarter end and leverage stood at 2.4 times debt to adjusted EBITDA, within the company’s targeted 2 to 3 times range.

Operating cash flow decreased 12% to $390 million and free cash flow fell 17% to $326 million, which Mann said was primarily due to a prior-year tax refund that did not recur and higher interest payments. She added that adjusting for the prior-year tax refund, both measures would have increased.

Verisk paid a quarterly dividend of $0.50 per share, up 11% year over year, totaling $66 million. Mann said the company also repurchased $126 million of shares in the open market and, in total, retired 7.6 million shares during the quarter. Approximately $1 billion remained under the repurchase authorization.

The company reaffirmed full-year 2026 guidance, including:

• Revenue: $3.19 billion to $3.24 billion
• Adjusted EBITDA: $1.79 billion to $1.83 billion
• Adjusted EBITDA margin: 56% to 56.5%
• Net interest expense: $190 million to $200 million
• Effective tax rate: 23% to 26%
• Adjusted EPS: $7.45 to $7.75

Mann said Verisk expects the first quarter to be a “trough” for organic constant currency growth and for improvement to build through the year, though she cautioned that headwinds and tougher comparisons may persist into the second quarter. She also noted guidance reflects the divestiture of Verisk Marketing Solutions, which she said contributed $68 million of revenue in 2025 and represents an $0.11 headwind to EPS.

Shavel said management expects the resolution of short-term factors and continued core momentum to drive “a gradual improvement in revenue growth” and reiterated confidence that 2026 performance will align with Verisk’s long-term growth targets.

About Verisk Analytics NASDAQ: VRSK

Verisk Analytics, Inc NASDAQ: VRSK is a data analytics and decision‑support provider that helps organizations assess and manage risk. The company supplies data, predictive models and software to customers in insurance, reinsurance, financial services, government, energy and other commercial markets. Its offerings are designed to support underwriting, pricing, claims management, catastrophe modeling, fraud detection and regulatory compliance, enabling clients to make more informed operational and strategic decisions.

Verisk's product portfolio combines large proprietary datasets with analytics platforms and industry‑specific applications.

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