Earnings Results
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Revenue:
- First quarter revenue of $704 million, up 8% year-over-year.
- Subscription revenues representing 80% of total revenue, growing 7.8% on an Organic Constant Currency (OCC) basis.
- Transactional revenues, representing 20% of total revenue, increased 3.1% on an OCC basis.
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Profits:
- Income from continuing operations was $219 million, up 12.9% year-over-year.
- Adjusted net income increased 19% to $234 million.
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Margins:
- Adjusted EBITDA growth was 10.6% on an OCC basis in the quarter, with an adjusted EBIT margin of 54%, up 180 basis points from the prior year.
- Trailing 12-month adjusted EBIT margin as of March 31, 2024, was 53.9%, up 120 basis points over last year’s level.
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% Growth:
- Diluted GAAP earnings per share from continuing operations were $1.52, up 19.7% versus the prior year.
- Adjusted earnings per share (EPS) increased 26% to $1.63 for the quarter.
Future Guidance
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Revenue:
- Expected consolidated revenue for 2024 in the range of $2.84 billion to $2.9 billion.
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Profits and Margins:
- Adjusted EBITDA expected to be in the range of $1.54 billion to $1.6 billion, with an adjusted EBITDA margin in the 54% to 55% range.
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% Growth:
- Forecasted adjusted earnings in the range of $6.30 to $6.60 per share.
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Capital Expenditures and Expenses:
- Continue returning capital to shareholders with a $200 million accelerated share repurchase program initiated in Q1, and a $0.39 per share dividend, up 15% from the prior year.
- $1.4 billion in capacity remaining under the repurchase authorization.
Trends, Market Conditions, Sentiment
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Market Conditions:
- The P&C insurance industry is perceived as robust, with solid premium growth and improving profitability among Verisk’s clients.
- There’s heightened interest in marketing spend and new product development as firms look to capitalize on a stabilizing market landscape.
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Trends:
- Significant focus on digital transformation and investment in technology (e.g., GenAI, Core Lines Reimagine program, Next Generation Models) to enhance underwriting accuracy and efficiency.
- Transition from transactional to subscription models in certain offerings, enhancing predictable revenue streams.
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Sentiment:
- Overall positive sentiment with strong Q1 performance and reaffirmation of 2024 outlook indicating confidence in sustained growth and market position.
- Continued emphasis on strategic engagement with clients and innovation in product offerings aligns with long-term growth objectives.
Notable Quotes
- ”2024 is off to a solid start at Verisk as we are building upon the strong performance we delivered in 2023.” - Lee Shavel
- ”We are driving predictable and consistent growth by harnessing the power of our more integrated insurance-focused company.” - Lee Shavel
- ”Our focus on cost discipline and operating efficiency produced strong double-digit organic constant currency adjusted EBITDA growth and healthy margin expansion.” - Elizabeth Mann
- ”This initiative is already driving returns for Verisk as we are receiving positive client feedback and experiencing better price realization in contract renewals.” - Lee Shavel on Core Lines Reimagine program.
- ”Generative AI continues to be top of mind for our clients and is a topic of much discussion.” - Lee Shavel