Verisk Analytics Q2 Earnings Call Highlights

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Verisk Analytics (NASDAQ:VRSK) reported second-quarter revenue of $806 million, up 4% from a year earlier, as subscription revenue growth and continued demand across underwriting and claims helped offset pressure in transactional businesses tied to lower weather activity and softer commercial-property markets.

Organic constant-currency revenue rose 5.8% in the quarter, accelerating sequentially from the first quarter, while subscription revenue grew 8% and represented 83% of total revenue. President and Chief Executive Officer Lee Shavel said the company saw balanced growth across underwriting and claims and that results were modestly ahead of expectations.

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“We continue to have confidence that the resolution of these short-term factors and core growth momentum will result in continued sequential improvement in revenue growth as we move through the second half of the year,” Shavel said.

Profitability and full-year outlook

GAAP net income declined 10% year over year to $229 million, while diluted GAAP earnings per share fell 3% to $1.75. Chief Financial Officer Elizabeth Mann attributed the declines to a divestiture completed at the end of 2025, a higher tax rate, increased interest expense and higher legal fees related to ongoing litigation. Higher operating results and a lower average share count partly offset those factors.

Organic constant-currency adjusted EBITDA increased 7.4%. Adjusted EBITDA margin was 57.5%, down 10 basis points from the prior-year period. Mann noted that the prior-year quarter benefited from a 120-basis-point foreign-exchange translation effect; excluding that nonrecurring benefit, the company reported margin expansion driven by revenue growth, expense discipline and global talent optimization initiatives.

Verisk reaffirmed its 2026 outlook, including:

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

Free cash flow increased 58% to $298 million, while operating cash flow rose 50% to $366 million. During the quarter, the company paid a $0.50-per-share dividend, up 11% from a year earlier, and initiated a $200 million accelerated share repurchase program in addition to a $1.5 billion first-quarter program. Verisk retired 8.5 million shares in the first half and had about $800 million remaining under its repurchase authorization after the programs concluded.

Subscription strength offsets transactional pressure

Mann said subscription growth was supported by forms, rules and loss-cost offerings, catastrophe and risk solutions, and anti-fraud analytics. Drivers included price realization on renewals, expanded customer relationships and new customers.

Transactional revenue, representing 17% of total revenue, declined 4.2% on an organic constant-currency basis. The company cited difficult comparisons with prior-year overages, lower commercial-property volumes, the carryover effect of lower weather-related events, and lower international-travel volumes related primarily to Middle Eastern travel disruptions. Strong insurance-linked securities issuance within catastrophe and risk solutions partially offset the decline, though Mann said that benefit was not expected to recur in the third quarter.

Saurabh Khemka, president of Underwriting Solutions, said soft commercial-property pricing has led some carriers to quote fewer opportunities and scrutinize spending on Underwriting data and analytics. He said the impact was concentrated in transactional revenue, while the underlying subscription business remained healthy.

Management said the company expects gradual organic growth improvement in the second half, but cautioned that a slow start to hurricane season, softer commercial-property activity and the absence of the second-quarter ILS benefit could pressure transactional revenue. Mann said a federal government contract work stoppage had been lifted at the start of the third quarter for a one-year term.

AI products, catastrophe platform and acquisition

Shavel highlighted growing client interest in applying artificial intelligence to underwriting and claims workflows. In May, Verisk announced two connectors for Anthropic’s Claude platform that allow customers to access Verisk underwriting intelligence and claims solutions through natural-language interactions. Shavel said a top-10 carrier was already using the technology, while Mann said the connectors are included in customers’ base subscriptions and customers separately bear Claude token costs.

The company also reported expanding adoption of XactAI, its claims-focused AI offering. Since March, the number of XactAI users has increased nearly 10-fold, reaching almost 7,000 licensees. Shavel said the offering helps automate activities including claim summarization, photo labeling, document-data extraction and estimating recommendations.

While management said AI-related monetization remains early and difficult to quantify, Shavel said the technology is supporting stronger renewal pricing in products including Premium Audit AI and XactAI. He said future monetization could include subscription pricing, initial transactional pricing for new applications and software or platform licensing for agentic AI solutions.

Verisk also launched its cloud-native Verisk Synergy Studio platform and re-engineered U.S. Tropical Cyclone Model during the quarter. The platform combines catastrophe models, analytics, computing and workflows, and includes the company’s global model suite on its next-generation modeling framework. Management said initial clients have been onboarded and additional migrations are planned through the remainder of the year.

Separately, Verisk closed the tuck-in acquisition of McKenzie Intelligence Services, a geospatial intelligence and event-response company focused on real-time catastrophe and conflict analysis. The business will join Verisk Catastrophe and Risk Solutions.

Shavel also announced that Chief Information Officer Nick Defond is departing after two decades with the company. Chief Technology Officer Jeff Negrete will serve as interim CIO while Verisk searches for a permanent replacement.

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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