8-K: Verisk Announces Strong Fourth-Quarter and Full-Year 2024 Financial Results

Verisk reported an 8.6% increase in consolidated revenues for the fourth quarter of 2024 and a 7.5% increase for the full year, driven by growth in both underwriting and claims.

Summary

• Verisk Analytics, Inc. announced its financial results for the year ended December 31, 2024.
• Consolidated revenues for the fourth quarter of 2024 were $736 million, up 8.6% on a consolidated and organic constant currency (OCC) basis.
• For the full year 2024, consolidated revenues were $2,882 million, up 7.5% and up 7.1% on an OCC basis.
• Income from continuing operations was $204 million, up 11.6% for the fourth quarter of 2024.
• Adjusted EBITDA was $398 million, up 9.9%, and up 13.5% on an OCC basis for the fourth quarter.
• For the full year 2024, income from continuing operations was $951 million, up 23.7%, while adjusted EBITDA was $1,576 million, up 9.9%, on a consolidated and OCC basis.
• Diluted GAAP earnings per share from continuing operations were $1.44 for the fourth quarter of 2024, up 15.2%.
• Diluted adjusted earnings per share from continuing operations were $1.61, up 15.0% for the fourth quarter.
• For the full year 2024, diluted EPS attributable to Verisk were $6.66, up 27.6% and diluted adjusted EPS were $6.64, up 16.3%.
• Net cash provided by operating activities was $255 million, up 1.2% and free cash flow was $200 million, up 2.0% for the fourth quarter of 2024.
• For the full year 2024, net cash provided by operating activities was $1,144 million, up 7.9%, and free cash flow was $920 million, up 10.8%.
• A cash dividend of 39 cents per share was paid on December 31, 2024.
• The Board of Directors approved a cash dividend of 45 cents per share payable on March 31, 2025, an increase of 15%.

Sentiment

Score: 9

Explanation: The document presents a highly positive outlook with strong financial results, increased dividends, and a promising forecast for the next fiscal year. The management's comments further reinforce this positive sentiment.

Positives

• Strong revenue growth in both the fourth quarter and full year, driven by underwriting and claims.
• Significant increase in income from continuing operations for both the quarter and the year.
• Growth in adjusted EBITDA, indicating improved profitability.
• Increase in diluted EPS, reflecting higher earnings per share.
• Growth in net cash provided by operating activities and free cash flow.
• Increase in the cash dividend, demonstrating confidence in the company's financial performance.
• Share repurchase program executed, returning capital to shareholders.

Negatives

• Loss of $12.1 million from the sale of Atmospheric and Environmental Research (AER).
• Slight decrease in cash and cash equivalents from $302.7 million to $291.2 million year over year.

Risks

• The company's forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projections.
• Factors that could affect results are detailed in the company's filings with the Securities and Exchange Commission.

Future Outlook

The company's financial outlook for fiscal year 2025 includes revenue between $3,030 million and $3,080 million, adjusted EBITDA between $1,670 million and $1,720 million, adjusted EBITDA margin between 55.0% and 55.8%, and diluted adjusted EPS between $6.80 and $7.10.

Management Comments

• Lee Shavel, president and CEO, stated that Verisk delivered strong fourth quarter results, capping off another year of strong top line growth and margin improvement.
• Lee Shavel mentioned that they enter 2025 with strong momentum and are energized by the opportunities arising from their strategic engagement with clients.
• Elizabeth Mann, CFO, stated that Verisk delivered 8.6% OCC revenue growth, 13.5% OCC adjusted EBITDA growth, and continued margin expansion, resulting in 15.0% adjusted EPS growth during the fourth quarter.
• Elizabeth Mann mentioned that they are excited about their ability to capitalize on the opportunity ahead to drive another year of compounding growth in 2025.
• Elizabeth Mann highlighted the board's approval of a 15% increase to the dividend, demonstrating confidence in their economic model and commitment to capital return.

Industry Context

Verisk's performance reflects the increasing demand for data analytics and technology solutions in the global insurance industry, as companies seek to improve efficiency, underwriting, claims outcomes, and risk management.

Comparison to Industry Standards

• Verisk's revenue growth of 7.5% for the full year 2024 is comparable to other data analytics and technology providers in the insurance industry, such as Guidewire Software, which reported a similar growth rate in their recent fiscal year.
• The adjusted EBITDA margin of 54.7% for the full year 2024 is in line with industry standards for established data analytics companies, such as MSCI, which typically have EBITDA margins in the range of 50-60%.
• The increase in diluted EPS of 27.6% for the full year 2024 is higher than the average EPS growth rate for companies in the S&P 500 Index, indicating strong financial performance relative to the broader market.

Stakeholder Impact

• Shareholders will benefit from increased dividends and share repurchases.
• Employees can expect continued investment in innovation and technology.
• Customers will benefit from improved data analytics and technology solutions.
• The company's strong financial performance supports its ability to contribute to global resilience.

Next Steps

• Management will host a live audio webcast on February 26, 2025, to discuss the financial results and business highlights.
• The company will pay a cash dividend of 45 cents per share on March 31, 2025, to holders of record as of March 14, 2025.

Key Dates