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Verisk's (VRSK) Q3 Earnings Match Estimates, Increase Y/Y

Verisk Analytics, Inc. VRSK reported mixed third-quarter 2022 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings per share (excluding 26 cents from non-recurring items) of $1.46 meet the consensus mark but grew 1.4% on a year-over-year basis. The upside was backed by growth in the Insurance segment and a lower average share count.

Revenues of $745.3 million missed the consensus estimate by 1.6% and decreased 1.8% year over year on a reported basis but increased 4.8% on an organic constant-currency (cc) basis. The revenue decline was primarily due to the sale of the environmental health and safety business (3E), and Verisk Financial Services.

Segmental Performance

The Insurance segment’s revenues totaled $610.1 million, up 9.4% year over year on a reported basis and 5.3% on an organic cc basis.

Within the segment, underwriting and rating revenues of $436.2 million rose 11.7% on a reported basis and 6.5% on an organic cc basis. The upside was primarily driven by an annual increase in prices derived from the continued enhancements of the content of solutions within the industry-standard insurance programs and the sale of expanded solutions to the existing customers in commercial and personal lines. In addition, extreme event and life solutions contributed to growth.

Claims revenues amounted to $173.9 million, improving 3.9% on a reported basis and 2.4% on an organic cc basis. The top line was primarily driven by growth in claims analytics solutions and in repair cost estimation solutions.

Verisk Analytics, Inc. Price, Consensus and EPS Surprise

Verisk Analytics, Inc. Price, Consensus and EPS Surprise
Verisk Analytics, Inc. Price, Consensus and EPS Surprise

Verisk Analytics, Inc. price-consensus-eps-surprise-chart | Verisk Analytics, Inc. Quote

The Energy and Specialized Markets segment’s revenues of $135.2 million decreased 18.5% year over year on a reported basis but increased 2.5% on an organic cc basis. The fall in revenues was primarily due to the sale of the 3E business that closed on Mar 11, 2022, and the suspension of commercial operations in Russia. However, organic cc growth was driven by modest growth in research revenues.

There were no Financial Services segment’s revenues in the quarter. Verisk had closed the sale of Verisk Financial Services on Apr 8, 2022.

Operating Results

Adjusted EBITDA of $383.5 million increased 1.2% on a reported basis and 6% on an organic cc basis. Adjusted EBITDA margin rose to 51.5% from 49.9% in the prior-year quarter.

Balance Sheet and Cash Flow

Verisk exited third-quarter 2022 with cash and cash equivalents of $276.8 million compared with $480.7 million at the end of the prior-year quarter. Long-term debt was $2.34 billion, flat with the prior-year quarter’s level.

Verisk generated $280.2 million of cash from operating activities, while capex was $65.8 million. Free cash flow was $214.4 million.

Share Repurchase & Dividend Payout

During the September quarter, Verisk paid out a total cash dividend of $48.6 million.

In the reported quarter, VRSK bought back 1.6 million shares at an average price of $187.08 for a total cost of $300 million. As of Sep 30, 2022, VRSK had $407.5 million remaining under its share repurchase authorization.

Currently, Verisk carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

Omnicom Group Inc. OMC reported impressive third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.

Equifax Inc. EFX reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis. 

The Interpublic Group of Companies, Inc. IPG reported better-than-expected third-quarter 2022 results.

Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been steady over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.


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