VRSK - Earnings call transcript Q2 2018

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Operator

Good day everyone, and welcome to the Verisk Second Quarter 2018 Earnings Results Conference Call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Verisk's CFO, Mr. Lee Shavel. Mr. ahead. go please Shavel,

Lee Shavel

this And Chief today to our for results. Officer; the XXXX Kyle. President Stephenson, you Chief Officer. and second We joining financial Executive call on me us a Mark With are good you, Scott everyone. Chairman, Anquillare, day and appreciate quarter morning Operating Thank discussion of

questions. open some our financial about comments Scott, up call Following the points by Mark key and for your we myself will highlighting performance,

take the I Before to that, as we like to Investor have Brodbar. do new our Stacey you to of am opportunity Head join imagine I’d introduce delighted us. Stacey all Relations, can personally

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as factors set Finally, future today's more that today's suggested performance forward-looking our today. will call statements materially affect everyone is is what in filings. comments forth about differ may that include in performance. could future SEC release, earnings by detail Verisk's performance our about contained the remind in could from Information Actual I recent

weeks Good call overall our had encouraged Now, results we situation about I Thanks in everybody. I with Stephenson. two with Scott across the are customers Lee. and and our pleased progress teams leadership recently Stephenson. largest will turn the our the with second morning, and opportunities. Scott today to business. of quarter over some occurring reporting and our Europe come away forward I'm

heard. of some me Let I summarize and what saw

of cycles a a forward-looking than businesses. This past. several we customers new comment we oil conversation of than commercial point in of every are senior company with the and only occasions affirmation anticipation from of their yet be A the front, good new is of largest a clear the Virtually Across the offerings newly need and position more heard through leadership in to for solution technical the and solutions the became than have deeper meetings awash are achieved decision-making On weeks business years markets to some our of many year the were frequently unseen. encouraging market a developments. the customers Verisk acquisition. is achieved of integrated which customers I the and hear we've U.K. but I dives on They of it as was which we On in continuing with been data our the partner measured along of transform different of analytic met provide. energy previously the the unique decision-making. and Equally we sets which and is modern asking energy around just felt were Europe's for energy London in developments data promise sign to productivity deeply of benchmarking into by companies rather is gas Verisk. insurance cost U.K. goal commercial are referring logic nature application our I have the of pipeline analytics customers realize the our see discussions one I brought customers understand also in ago. the organic and through data with that optimized combination future. in who industry planning must-have with level can methods. quality in to the heard

Our see so. to me the level indeed Verisk data team Mark I their consistent spend one current customers is work important opportunities amplify wonderful achieve two partner. Again, partner not business only Europe analytics. the some to future customer analytics that leading being U.K. representing most considerable about Argus's the harness to by great offices unique in I our was let the A intimacy how as set conversation over can of spent with is comments with a meetings offices helping our sponsor and transformation. results improve our the moved It our our and reviewing but of their in them in of conversation who our it to person hand learning time the in customers, of to enjoyable and across customers was see also an for insurance that, customers. executive harnessing primarily on done doing some natural attached us a After a the then as to partner solutions, the message value several customer's vertical. machine companies to future this everywhere afternoon With in

Mark Anquillare

quarter insurance as our we had insurance business contributing In and Scott. businesses. you, Underwriting in as facing claims another strong Thank to well growth. rating, all

our information, solutions. insurance AIR models; unit our and property a unit Let me underwriting topline our and for better which position and future. provides remind and rating update consists underwriting on that areas one, and Two, new that event industry-standard Sequel, lines ISO initiatives us few everyone you solutions. specific underwriting insurance the provides software which programs, which extreme drove segments, To business provide growth several our three highlight our reporting rating unit of business personal business of

existing underwriting growth and to extreme and personal programs quarter industry organic strong rating of the of lines and delivered combination insurance sale During the underwriting, new customers cross-sell solutions. of standard across a new innovative event solutions through modeling,

while as Our retention a the in thought its legacy ISO prominence high maintain leader property-casualty business rates increasing customer continues to industry.

personalized programs program where commercial two-thirds problem and insurance a we fueling of uninsured to represents for the LightSpeed States both series And auto analyzer, of outside highly risks suite growth underinsured underwriting address of analytic extension's a analytics focused have threat during fine detail contiguous risk of U.S. for and coverage our We Harvey risks. flood These on significant personal satisfy the evidenced in the all zone. regardless XXX to and Three, occurred in suite flood flood year the with data growing lines FEMA our warning, which claims. providing of primarily [indiscernible] homeowners' Two, in losses ISO specific avenue our personal Hurricane, as and launched new put product pricing of new cyber including segmented programs areas cyber FEMA's deeply of tools United in growth the insurers. risk. on

and and a physical leadership these by understand module we analyzer opportunities for held collaborative Risk of of extend and impressive London, commercial energized risk across team beginning fully a meetings the introduced are focus by together on offerings. our recently highlighting efforts. Verisk and with to in key rating our and Lloyd and be U.K. our developing insurers claims was strategy a the businesses Symposium, InsurTech customers to prioritizing an opportunities issues. suite was damage week our After European scope syndicates The June with power auto. brought We Verisk and as across insurance continue capabilities event number follow-up global London our risk In underwriting

suite claims our across of focused solutions. businesses repair cost ClaimSearch. our cross-sell Our one, units cutting-edge loss Claims include business combination all of and quantification organic featuring new of claims sale growth analytics Xactware, solutions fraud remote business. prevention quarter, through experienced our three, with and solutions Geomni, and an exceptional a imagery on estimating;

caused roll-off steps U.K. an to recoup solutions Subrogation the shoes claims we and the leading then insurer of subrogate Validus, a During acquired by or suffered by in the companies subrogation party developer a of portal loss provider when occurs the insurer an management insured. the third pays third-party. the Insurance of insured the leading with the into interact to quarter,

the claim to well-established claim. U.K. existing the market at insurance the to of its Verisk life positioned stage uniquely a every With is solutions of set support subrogation platform addition in

we drive handling. As touch highlighted earnings our call, right process I towards prior customers during focused our are the claims to claims automate on helping

that, underwriting of insurers very and and businesses as are our Geomni, aerial create harnesses machine about learning improve data advanced both sensing limited process, Lee the and exceptional injury can We where platforms are high-resolution to the and a our efficiencies Xactware. strong including information library of are insurance turn less and efficiencies have over we process integrated cost it and integration advanced residential analytics measurements claims properties dimensions perspective, from with dollar and all all Across imagery tight resulted cover customers. manual areas through remote and technologies to in States. our smaller that The Verisk me The are intervention. are of financial property vastly With its customer commercial handled property provide with The business in seamlessly substantially for massive and the bodily Geomni, benefits modeling. commercial pleased repair complex has for as residential claims for catastrophe estimating data for structures, our of to with businesses. performance image library, growth United tools and claims imagery and for results. subrogation well for let coordination and we financial claims, the added

Lee Shavel

Thanks Mark.

fact presentation like attention trends the that and support presentation to provides quarterly First, on is our to our website. earnings background bring I’d available to have posted and that analysis today. we a conversation everyone's data The

we our presented quarter, grew XXXX, financial the an the increased organic consecutive it reflecting grew related demonstrated in of million quarter, our growth and a the minimum of Please for and I that target was X.X% growth growth growth X% to acquisitions was XXXX. XX.X% all currency our Revenue focus EPS with very transaction increase targets X.X% X.X% $XXX ahead revenue the and revenue to into these that The at also were of expense operating to note growth long-term with and for on on EBITDA fourth have inclusive of full million, Acquired also currency GAAP our constant XX.X% for and to our GAAP all to X% produced are the growth skill recent results leverage. business. quarter and amounts. our EBITDA comparison. haven't consolidated quarter. expenses same the improved second for Moving $XXX of basis deals now compared GAAP shift million acquisition and to in up X.X% on of demonstrating in is benefits ahead from prior fluctuations and which adjusted results EBITDA from don't in year $XX Verisk Adjusted of financial momentum results investment revenue the quarter second year-over-year differential. Having results, rates the performance margin $X summary was a target. EBITDA impact period our nonrecurring EBITDA will for of diluted the respectively. results eliminate XX.X% net continued a EBITDA up or included the income organic These adjusted of above across of $X.XX XX.X% moved year-over-year enabling differential of our long-term that consistent XX.X% benefit the an quarter the target solid and million

to basis. Let's on organic segment our now currency turn results constant an

with contributing table in claims release, insurance contributing strong press see in will XX.X% Adjusted underwriting with you the a X.X% across revenue As and growth. growth had for rating year. quarter insurance our EBITDA rating X EBITDA and X.X% in grew solid product adjusted underwriting up XX.X% in XX.X% margin business, reflecting from saw increased lines. of performance our we the Within XX.X% prior and

opportunities and was claims hosting, of to employment the despite LightSpeed telematics, property our breakout data also in claims our small-scale point. relatively exceptional most the growth energy product invest this We a a of growth by in Within global screening at continued with function growth continued businesses, slight offset our including strong in decline business. strong

to and has Financial headwind breakout up that from energy reduced opportunities from as demand The also from strong industry but their to the In ongoing by the X.X% generate of contract XX.X% markets improved and leverage our growth and expense. in revenues the substantially improve Energy analytics research improved XE long-term as expertise from also a the swiftly decline in X.X% results new renewables demonstrated strong X.X% growth EBITDA the are growth quarter. with our was the at believe XX.X% X.X% the increased of from and segment the more XX.X% addition, industry. a the the noticed of specialized markets prior delivered data wins Adjusted year. revenues. and EBITDA investment in Geomni Wood and growth have companies. prior develop and segment leverage chemicals recent the for of quarter more industry growth was revenue in products banking services the associated that and results margin to data adjusted growth many prior initiative year quarter energy down to the presence These the in the early from subsurface, remains prior investments business to of continues recover consulting client global core increased and breakout was power opportunities you Adjusted and quarter up slightly to potential represent has down by headcount PowerAdvocate. continues unchanged may was we of in EBITDA in to in energy This WoodMac in compensation below efficiently. for we and its growth from and despite strong. expectations growth foundational Wood an our improvement in enjoy and management analytics constituent X.X%, data portfolio X.X% These period our markets deliver benchmarking areas our X.X Adjusted revenue been EBITDA data and increased management XXXX quality clients. due with from organic Mackenzie's solutions expand the reported growth quarter. in and delivered expertise margin to include operating at the The ongoing our in are prior by revenue expand Overall strong of X.X% achieved supported leveraging improvement quarter initiatives growth X.X% data skills clients. and which support was growth supported specialized Mackenzie broadly in growth analytics enterprise and as continues they for the the our the as management continues prior solutions revenue where

anniversary over Looking growth reflect revenue in of time. the two quarter partnership million early thesis our of generated the our to lesser partnership next to quarter take ahead services the nonrecurring the the followed subscription represent results, level quarters. of of initial development nonrecurring a formation revenues revenue the in of to by with have and to we prior in regard, quarter consistent remind opportunity revenue expect quarter's XXXX those everyone financial we want high the with Consequently, XXXX model, that third the rates this will revenues recurring significant partnerships of the of burden of which stage typical our third license implementation in next subsequent will year. revenues the amounts our one-year of X In

the capital this year impact in down prior of ongoing As to from Consolidated to quarter from we've from quarter XX, depreciation expect million the revenue had was billion development of quarter million clients the opportunity our $X.X discussed due reported been with $X.X of $XX launch funding the up with XXXX. and the XXXX the reflecting interest and the to income acquisitions $XX integration partnerships but data follow. in through up debt quarter to Total at in due of quarter products acquisitions periods. both marketing amortization year in XX.X% was increased December prior the XX.X% delayed expenditures commence Reported billion challenges at was previously, subscription XXXX. we June the the XX,

basis facility credit Our the of times leverage the at second quarter X.X end calculation. the was our of on

XXXX. million consolidated cash $XXX.X at XX, were Our about June and cash equivalents

quarter effective the quarter recent reported prior the tax tax rate of a in Our year result for XX.X% as to was XX% compared reform.

rate than targeted that employee favorable significant produced Our lower outstanding tax a rate range effective was due impact. our options of tax stock exercises to

rate We XX% between and of are our estimate maintaining tax be in XX%. our effective XXXX to

However stock personal in the impact and the and decisions. price option employee part stock timing Verisk on exercises of depends

primarily pronounced reflecting We Geomni be prior-year in acquisitions. income revert XX% higher we up for in net million XX.X% EPS second-quarter impact year expect software $XXX investment cash $X.XX for this quarter. the increased were reflects up million to was to adjusted net effective more up and recent of operating adjusted a that XXXX $XXX second-quarter tax year, also $X.XX for the quarter and the from were $XX year Net million organic $XXX of activities that of that prior second the rate the up from for up acquisitions both XXXX was from development reform. tax XX.X% was the and income in will the the capital Equalizing XX.X%. contributions diluted XXXX the quarter. of tax quarter by XXXX. growth from The provided Adjusted XXXX million EPS and rate in effective will the from business, Diluted prior in expenditures XX% increase prior quarter impact in adjusted

previously, prior for At repurchase million our authorization through XXXX of discussed year. will We was million XXXX $XXX had Geomni. increase price a authorization under be million weighted the average for the $XXX shareholders returned in we've As from of quarter quarter, XX, an in capital shares the including a year in expenditure the $XXX.XX. $XXX Free share million $XXX to May cash of peak XXXX. repurchase we the flow remaining million capital X.X of at approved June XXX.X%

initiated XX accelerated to quarter in repurchase executed we the addition, a share million share WACC impact of a accelerate repurchases and of In be at period. third discount over the to the execute repurchases

of was the The We Two, of so currency ASR and to and investment the as for revenue was XXX underwriting four and average shares the margins. our organic ahead be organic capital repurchase additional opportunities, ability have should not claims. substantial share X.X% repurchases XXXX the shares consistently Three, constant quarter. quarter both remains improved count attractive currency growth our June share shares. XX for return and in of the XXX million both represented and constant to million in the results during quarter in our one quarter the million Insurance continued count diluted internal of Overall viewed XX, X.X%, targets. EBITDA total performance diluted on growth strong shareholders. rating

growth continue objectives. towards make Our financial progress energy their and to services

in expectations. rates nonrecurring reported the third of initial want represent to mindful from our that underlying growth be third third million and will $X everyone year-over-year revenue in XXXX quarter million but a we thesis $X to change XXXX partnership the growth the don't in quarter, quarter ahead storm-related in affect Looking of long-term revenue the the

hold We for don't the know us. storm XXXX what will also season

to profitable We and are and excited we remain and business remain capital to focused solid support our investment capital. financial long-term. on invest on returns in the long-term opportunities growth confident structure the that have for strength about We the

one continue analysts Kyle support line the ask Verisk I’ll the that ask we of covering for With to We have interest and follow-up. open and us. the large that, questions. We to to your appreciate given the in Operator all you questions one limit number

Operator

the Instructions] of line [Operator Mazari. question Your from Hamzah first comes

line open. Your is

Hamzah Mazari

what Maybe I insurance insurance double of your of touch saying of You clients the business European touched the that. goal. in could internationally highlighted and on some five headwinds think still on think you years some are if can sort And you you to you on, had the maybe that offering. challenges do

how business feel us much you that international and update can be maybe confident? Just why bigger

Scott Stephenson

it's When and insurance the we as think about vertical, about the opportunity U.K. it relates to international not all the just of first markets. London

of how I because of. of - the London And is data, methods work the fact We’re a out developed - part number I see markets. we’re markets overseas American of not that actually consists customers, just know our also in good consists lot I today. because we’ve tell in was taking pushing these you of The with partly that's in the them European to with non-North tuning local where them local headwinds, then that the what largest to footprint U.K. that infusing can of presenting and Asian tailoring what United highlighting the don't was I the them work partly we in that and is a States today. really do tuning them, but lot markets. tailoring a

and what we in our represent. clear our understand to not local natural for - it's have great these But very make mean what solutions white feels the today local it customers the a mostly you they magnitude it's customers and big I order and XX% organic, of as it's the and about cause markets ground it’s Verisk non-U.S. just world and value there there. space we that can and need on it's most conditions So that the people be know out relevant us,

is us it for of headwinds. don't march sustained in but this long think I of a So terms

of people it locally terms at what making and ground of on already we’re it good think great taking the I relevant. in

Hamzah Mazari

of in I Lee they you more capital forward, And going lot for investor for to your analyst us maybe about that just outreach guys a frame thinking follow-up spend have dividend. maybe and how I'll acquisitions, on terms going know you're a are over going a sort add different of a on has in leg the Maybe bought where core. to the outreach energy know allocation broadly a feedback I how forward? broadly we business to been than program focusing portfolio just speaking give the after Lee. you about just just you're allocation of a us and had thought you're thinking Are third history you little days you time turn now some going it your be about capital healthcare

Lee Shavel

on through through not to just the deploying opportunities trying investment in a growth on you businesses think is looking combination put upon and - quarter, think at see our growth whole and about capital. second opportunities. to the So preliminary generating enhancing And data how longer I at CapEx, where thinking emphasize at a across we The are on Verisk. and at I and effectively and you that very most you in what what's sector. what looking we what many each evaluate markets shares, Once are understanding the acquisitions, about we verticals, going that of attractive to returns looking in the really the a at have really organization core how investing insurance, The at as our we’re but as the into is manage those exciting as a capital discipline how that with certainly the that's capital But and just the initiatives. final And and so investments it's generating basis I business. to at stage most internal where as capital the with strength business way focus and effectively capital the basis of generation initiatives doing heard services. across talk the see the our the that that's would really starting capital we Mark across we opportunities term focused all the within we’re optimizing to and Scott and And opportunities And return invest just objective identify breakout have businesses thing specialized will business. is to and is improve within that we’re incremental the all as we the of we’re this support obviously an returns importantly where cases focusing we the we’re it, this it of stage we that have management think thinking based capital are that. we’re then we capital. we there next stage opportunities, how about analytics repurchasing three We of I on financial are think several I determined about say on the on it about energy step quarterly in but saw of to a see our opportunities that how generating

we comfortable verticals. There growth, that that evaluating we’re any with those opportunities are that always point M&A very opportunities pursuing. an expectation not at can the is there's that are exist While create within three additional vertical we this

Operator

comes from the Your next Kramm. question Alex line of

open. is line Your

Alex Kramm

think you but was like little of or really which claims think highlighted outlook X%, and prepared I if that I out back more the with over second on storms. half think you Just you reminding I Lee like quarter’s that's a really stepping the of strong kind growth has guess bit us Xish strong for remarks so. back the been ended your I

term? the of can just the like growth more longer teens sustainability, this in feel on great grow I'm is to couple thinking that forward. holistically a kind and do I holistically next is mean quarters could question about but your how you going more, not I So how there continue weigh but think claims rate growth

Mark Anquillare

it. third from back the Mark is quarter. severe This in I’ll claims year the try maybe fourth or benefits activities last address Clearly area storm to occurred

activity. of bit more. that some continuation a most by I we’ve of to continued the also seen is be think services to of a provided little storm as of And result We’ve what we’ve part a had contractors. insurers seen some and

parts is and business chain services results out to just activity. first I I working. the quarter, to to lot did. I in continuing second over several products the be made just strong. extension of in So the quarter new we things that attribute have all and last see going I - new good back personally to the way the investment the in And years into underlying storm wouldn’t highlight you the it a don't insurance see we’ve of be wanted I value think I claims that and

comfort a strength solvency context hope So the on little business. of little of underlying maybe a and and I at that provides least kind the

Alex Kramm

Lee being just, I Verisk I nine be your cost non-organic, at looked very at looks not acquisitions? holistically, - but you've how processes - the the side organic base integration been know to well mean I speaking for and generally prior time spending so. at secondly they on you Verisk asking because and lot months company the versus think I then Have may guess maybe conscious. of are a good on for very just you from shop a I was about And if known how I'm back very cost lot or very margin, think cost stepping improvements the of tight, just there the margin on almost of Are obviously and talk on

Lee Shavel

Yes, thank you, Alex.

obligated a throughout the I that the without feel with off management of around so you and I margins good starts this think first I cost think organization. And wouldn't discipline that see, say to strength discipline Verisk very

gotten to every there the shop, been beast learned and regard, I And that of that spending focus that migration always cost cloud say has think focusing day. from a prior management on my in proceeding migration that a against mainframe that from opportunities from area the that have is to which for and us cost as fight been you have structure improve a against has And broader lot we've time so opportunities to standpoint. isn’t in I aren’t been represents to one a I particular capital cost and

going in And shifting structure. you we a can of procurement technology And with also interesting raised so heretofore to in changes and a procurement other have in dimension some a other improve the it call oriented elements. leadership data efficiencies overall are costs attack cost in strategy. strategy but business shift on across the that's cost evaluating where one very be actually focus we find order to process And it, our been structure which costs to been has the we the on

that So sourcing with that received reorientation on there headway something against a focusing make of and we strategic that. initiatives opportunity and it has further hope function procurement our to I'm a number focus is are that on underway, of that

Alex Kramm

Very sorry… good thank I’m you,

Scott Stephenson

where things. to I'll of of side a the source It’s productively. only concerned, our - Scott hinges kind sort by nature to One beat the of the you of we just $XX,XXX, our that Lee in is change. inside is, add today. really company cost think a deepdrum deep headed rock remarkable. infrastructure And is storage going on this capacity It our couple cloud was computing is the Only $XX,XXX about cost tell the of business here, as saying me

on think from we there. naturally move going we I are productivity as prem see so prem, to to not And on

will productive of on of is, company. last better, applied going And machine solutions change lot learning of the to highly of for the is somewhat at strong done, our then the of all work around And about Another talented it the the workers Lean at can diversify just summarize asymmetries there things making most our around works might more Today, gets has in in less paid, Six revolution our very consistent tails us the more we here harnessing longer by that's thing AI quiet opportunity terms the them a from. There ability sort gets inside we is knowledge and that methodologies, been least made thinking the is have. make globe use we drive of to that which that towards now actually use nature machine kinds more. we knowledge professional the that our learning. for to to comes and change two believe of really one where quick, have than a which I effective what of the but customers future real will other to by make moment of machine work confident are and and I the way revolution operations, and Sigma we at really people are think talent is harnessing cognitive be it we

and quarter-to-quarter things is underlie productive of just are not bunch So all year-to-year. this that these - they are

are them of Some developments. probably decade-to-decade kinds of

Operator

Your next line comes from the question of Manav Patnaik.

Your line is open.

Manav Patnaik

My first Argus. question on is

one-time us least. I $X is guess for year's last disclosure so million at me maybe third the So, quarter, benefit new in

the probably used of that so we there, a quarter. we to going this are from what and I guess, quarter is what's seven under so Argus, to third understand margins I'm I issues not understand to maybe ahead it and trying going is - the good even implies And performing quite are like, don't number have see what took what of really the quarters on

just just out I there. what's wrong So again going be could hoping flush like you may

Scott Stephenson

I do of think a like going which is all, we business, Well, what It’s are wrong great that proprietary Verisk. things don't content first all at of at most on just at Argus. founded

So it's to of I case made the think highest our is great you a very five it of over the financial going three in that verticals actually handicap actually a be hard were them. if which rate years of three turn to good me to find I growth, ask it be services. there and the Verisk business could next is to

all going I well. do think are to they

and of write provide and banks do banks kind it report of all of to and banks The of which relationships words, and of couple financial quarter risk the been have difference on The of we summarize really they is amount have but relationships some as filling it have the out past methods of business out. valuable median really, the about and great what on one basically you an individual years, with we to I work had effect has regulatory the a to lot the Thinking our ever in to bulked differentiating with stepped that of and become that. essentially now a tremendous methodologies, that one-time so the they other at levels the relationship side, right that segments is you the to really you're on last proud of in in the burden going major underneath been Government behalf a did a our were there method of what is form was things a disclosure it's call find use that also of we that point and a across is value we wonderful banks have XXXX, of effectiveness look done. of allow from this and Federal using we its the as we do regulatory want we and customers few our XXXX, buying customer was, large that provides part have In were business of justify backbreaking basis. includes as requiring around just in I'm size of very which traditionally the just provided view. on discussed here consuming lot cycled this but that their methods was discrimination astonishing. the them plan of over out it are a individually, last the but of to is One was So, the couple so that very a services consolidated the in

right that rotating intellectual customers. our the property in we're we of So, now, to underlying the present middle way

then a getting business. annuity there's so -- expected implementation And shift of in not pointed note activity a there's in talked later it well, we relationship, a about, with purposes, kicking actually couple big we've thereafter. it's new annuity a quarter as in only of did we of he and to And respect establish couple Lee occurring. over the the in is the I out where this very is than and issues. the point The truth that surge nice integration again, -- Normally of of When that because moment XXXX, the terms grow then lastly, quarters kicks stream data delay for mean a stream integration productive.

over intermediate on So, that's inside the is longer our completely periods is on business this what's of and outlook business. time, going But unchanged.

Lee Shavel

think It as and the -- a are was And do standpoint. at Scott just from it noisy been I starting growth is understandable to at it's an are look And business. chunky has that back important Manav, of question. the what certainly a think kind it. frustration level we to add, that and understand I driving elements describing, step a

this of business. been from focusing process make sustainable in growth we We how the a structuring have standpoint revenue can on more

deliver feel, revenues. we growth naturally of have years. know solutions, applications. experienced that remains with certainly compelled noise the data to use time when solutions, I past And value but the we here we think But were revenues early large and focusing data underlying of the marketing these this solutions, I that underlying case, we you in their and of enterprise to licensing the to opportunity eliminate couple looking over management the upfront across to undiminished that with that subscriptions on the dynamic accruing now, the extraordinary despite I on and the that both believe portfolio see we dataset there how those. part in that's created is just large component Where think want that story elements, and our growth that the important think don't implementation of clients, understand the management that apologize is ahead, we over as the it's are we one we've the and years of sustainable that that spend broaden about and businesses the to number we of ago, potential, across is And some that ongoing several looking of those time and noise. all relationships pursue. the opportunities given I that's were at are a each opportunity

Manav Patnaik

new products, recall, the of Scott, talked X.X to in the on the out. making year lot question, like, one rolled platform. WoodMac platforms acquisition, at maybe the how back second made step of My investments investor just in the I been investments days a already made you there's about after you you're

like, new this of or future. sort initiative it of some like question help customer by down you was in will gen X.X feel is this So, is my more driven feedback the sort

there? to get wanted Just more some perspective

Scott Stephenson

other verticals talking me decision commercial customers serve, And you we of is, I'm let the it's which making. large about by three Of yet analytics now, data. transformed us. one vertical the we that The companies least in one are data -- is Yes, give for the not serve. three talking point technical scale verticals contextual also, about And both. I'm the awash is the energy

not and sort it And -- that insurance the time hit we to big in data, of drive the a get their course terms business reasons decision with it's commodity on tsunami WoodMac. price the way commercial Pound brag have, to double harnessed they don't so and know making. knew that a excited U.K. banks haven't at companies to And into they the that we that's in the company. were of So but we fact one of that of why hard denominated that based with then

So the in turn the into pull sales we storms, boat and of port. the these basically middle

we're for clear, on the out back sale. Now, seas the sky is

just nicely for was if intended story I the the over just that beginning. and generation speed had behind. it I the commercial have can wanted because not longer what data, next -- not, on it's just the I haven't point. WoodMac that build it's was the WoodMac make side, all XXXX, a in there's we the want you followed way based think which sort came to just been periods know that In done sets and digitally that degree of words, customers -- Because of next to products if your WoodMac their behaving. after data other just time, environment very of that your not the our So, folks productive And from of Verisk that to And the in volume a we basically. the the way. of platform generation that reflected that X.X then It's were platform was

in essentially it you energy and yes, they these have environment used gas cycles, to to in. would of of going other project customers reflective worlds bespoke were multi the offshore were Essentially think developments changed. of oil the part because But it was they of the on where space is, I that, to unto kind and have their then these have every you decades under what's of responsive on years its planning millions own. is is $XXXs

North so of in added context. And in is planned happened What's that supply North very you America, that been incremental has in half America. And differently. business the all the behaves

to could drilling days a can and location You want you later three I "X" can over move that, be you a XXXX foot have say, in well. well yards and XXXX there,

that's And to so weeks, reduced have actually planning and and cycles exciting. days,

The there other thing it's else's is in somebody are your and people lot to back that people has position. Permian, of next-door position the happened is, in so the lot are of not bespoke, there

sort is to than desire was. benchmark of up use much it and planning intensity the so and that greater operations tune of And to

words, that's be effective the have bigger And other now. in to that's So, going conversion be data, to on you faster. right

what's capability creating driven. WoodMac the customers customer cycles this being actually up activities. of mean only benchmarking X.X to greater our environment, you on, tuning I and serve with up fundamentally So faster with also own that's pick going of like the is on as but these against it's can a not that amount

Operator

Tim of line Your next question the from comes McHugh.

Your line is open.

Tim McHugh

from the insurance to understand point this gross rate? contribution to at follow up any that would this aerial done at the can on just quarter contribution Could growth you imagery I activity? the rate, attribute storm all in And was Thanks. you the help there us

Scott Stephenson

and severe that extended I who But what the around around this was really storm seems in It was is good. no contractors storms. is with quarter. There has one continue. license, during think there have we've explicit seasons, nothing seen I that impact back Question purchased like solutions mean, some the storm been will benefit. that

last third year. quarter jump over storms activity us to Similarly, me storm Let during the now with helped Geomni.

customer very it tremendous most increase heart at trying we're imagery, data those for automated brings had and is, it strong our the opportunity location, we're estimates. data, taking what it of that really in productivity growth what that's doing very from an in now efficiency the is We seeing repair the bands having populating of information by solution the to I dramatically into by of to do Geomni, whether to with prepared At driven of process. think share. part a very you're adjustors bit customers. that turns And visiting a or the trying in tightly cost inside adoption, we're claims way, most we're that integrated creates and where the afar of

of think the insurance kind we change their the is organically processes. very the insurance, We accurate, Geomni overall automating helping are to really more I way true. started And have are and that of companies rate those growth is

Tim McHugh

leading us help rate effect research you growth of Mackenzie? the And my of versus the Wood was Can side impression consulting consulting business side? the versus that the growth research with the

Scott Stephenson

is true. energy the portion to Yes, Tim, the that's absolutely that the side. The most the side investment on immediately increasing consulting responds levels

And as describe growth areas would I the strong so growth.

research for that side, there. about energy the levels continues the On benefiting has But improvement subscription been our of I consulting cycle from modest the growth we but clearly sector. growth the upside. earlier say improve subscription side, are that there been which steady to represents as seeing it's XX% more revenues overall growth, a the has in would

Operator

the from line comes Arash of Your next Soleimani.

Your line open. is

Arash Soleimani

the total include or on insurance, market does adjustable $XXX claims there side only Quick question both Geomni, underwriting? on million and the that that within claims is

Lee Shavel

property So, the underwriting the on the attributes estimate. buildings and these business side -- have described. both what the very characteristics That insurance, as cases claims claims about were underwriting is the and homes, specific helping in relates that we and as the business. to residential to when as, to talked on we've it of we we the better We provided in physical of, refer understand the context side, we

kind two known So, it with use is a insurance. combination of case of a the for

Arash Soleimani

you Thanks, an Verisk? industry from can to what within and Geomni, increasing presents aside for about automation and insurance extent opportunity talk that the

Scott Stephenson

do that. me let Sure,

are… I we think

Lee Shavel

hour half. about take an to That's going and

Scott Stephenson

quick. be will I

What make and to understand most industry, everyone insurance changing graying investment they're more as friction. the as way or underwriting One, difficult to there the industry the population the themselves handlers, the automate to claims processing. where doing to underwriting get an on very to -- that to experience they're that they say, technology insurance the in claims need of things. go talent also both the a be to about address, I needs two That's well to they the is The of way side, rid in think experienced claims inside are on need where lot operational be. out helps difficult of side the risk.

they're to little of -- expert XX%, no claims handle way. this bit touch a estimate a So, in low-touch create trying our is systems about to XX%

risk. the transition side, price the that stay office, claim in like on to can So policy digital that lose men, to customers And those on world or trying close. back don't else that sure and of everything with understand, the data and one of assess, all point-of-sale you personal, its with systems, underwriting so information handled can is pushing in they analytics, even flows XX% whether commercial, They're claims be at direction theme, they the overarching everyone properly engagement. make

and I change people quick. really that hopefully they're and way business. the that we're kind InsurTech, But and doing expand So, all of is making doing was efficient

Operator

Steinerman. question the next line comes of from Your Andrew

Your open. is line

Unidentified Analyst

to I back on wanted good morning. [Jude] Hi, circle for Argus. This on just is Andrew.

some had last had about, wanted on of $XX ask gave been I what's prior. X, as versus growth guys outside the year, million contracts Investor You year. eight at color some helpful Jan and you were year this multiyear TSYS, at Day, XXXX higher, holdbacks you that to to the mentioned large bookings mentioned of going on

you sort you. with I delays something wondering the contracts implementation Thank any we was So, were on see how those going of coming is if that that those the or are rest seeing could of horizon?

Lee Shavel

that contract the balance Jude, expected [indiscernible] slightly the that half time of the with over our our The into remainder is had worked of the been question. sense year. over we thanks revenue, last for

update was but majority we've growth. realized, an the some I half, carryover progress impact made I'll previously. of there but has the material come year-to-date, of So were not give in so kind that more in. a probably revenue will where probably suspect we on has second on But and kind probably some that of and been that, be

Unidentified Analyst

is One had types on as some any of regulations? being point, customers. to to weighing, of is One those of quick GDPR, follow this missed events specifically bank your Scott, I heavy that filing some weighing Maybe marketing peers burden of of up Argus. related mentioned similar but and a this headwind on the as similar to their those effectiveness. mentioned growth, regulations, that's your your

at was I So, if wondering play here? that's

Lee Shavel

This States, No. specific United particularly. is to regulation in banking the

So, no. It's not.

Operator

question of Warmington. Bill line comes next Your from the

is open. line Your

Bill Warmington

specifically basis? last the couple gem the quarter? quarter First renewals guys pricing like-for-like And general trending question cancellations. How you had a on on been a trends in about WoodMac, the this how talked of been

Scott Stephenson

there. to got I facts Bill, correct your

did us. effect we cancellation. going entity about didn't the in gone relationship back that bank those. when with two there an and other, the note investment vertical, business, it's that about We of their that rethought us. sort was quarter about is not revenues customers one it's away, to for the energy and just things scale the one can talked gem his position in talk last combined with talked Lee So, has consolidate, on just And was, gem on that their we have they respect And remarks, then of

to So, I base make sure fact just I established. is want

Scott Stephenson

to -- next you think Can I do move move have to we to we the Bill. the want may question? Carl, lost

Operator

All right, Meuler. Jeff the move of to I'll line

is open. line Your

Jeff Meuler

terms growth perspective? based had next other headwinds take the Thank improved in to faster versus but a cohorts I question. of is to years it you. that product, vertical? there from is hurricane there But sounds this an insurance needle a benefits on big much ago. environment play? in what guess I Like, is How the movers underlying of market of any prior different that seems any was at end beyond me are moving specific the insurance generally product broad the consolidation that couple it on from factors It or selling are than

Lee Shavel

Mark, all, please jump appreciate Because of extreme is no first -- that start, the question. I there events that But So, asked the doubt thanks I Jeff. -- you way really Maybe the can is our productive fact in. there very of sort an the are growth long but of as our a factor of over is rate of it underlying it extreme relates time. business, effect, events is to term very periods long results a

XXs can few of basis add are events. there, points extreme because a that You are probably there

modest, is our in it Sometimes you they business. look peak, but it's if going much over sometimes doesn't but something there long what's though really There more explain cycles. on

it would to way fundamentally been really do can for that's characterized first for as call of it of out And as all. So, I is innovative the really the about productive based think in That's thank us. we and it's question, broadly actually The thing a the Otherwise point you specific be. movement how you news. is, only I thing, remote inventory.

their are customers data businesses Our to analytics. with trying revolutionize

it's And list, ago. footprint, capabilities, that's we customer And all on they stronger and at rate a are the relevant fast. determines to of really our which so us what couple grow be were years insurance than

anything broadly So, if to to very the Remote don't your out, Mark, it's would that. point want to fundamentally, call add imagery based. and be I know you I think one

Mark Anquillare

the products. I highlighted you think good

of way the along we way. mean was consolidations some here, of move to growth think and and of does product always some our it's opened internationally, us I but think the you I run development, a highlighted bit I headwinds, headline, in think strong. we've good just internationally think I few I but growth industry limited just negative positions some that great kind had the that a beyond Good helping point-of-sale. with kind

Jeff Meuler

have contractor and And in to the That bookings Judah's worked to according your is all worked contracts all question. percentage and you thesis are -- answer saying this the other Thanks. coming just just way basically to then we’re or its banks? in media effectiveness the plan you from wasn't the multiyear revenue signals percentage up and Lee, of follow thesis large saying delay into the its on Were that of the revenue clear. that's way

Scott Stephenson

With Investor to the Day broader regard referred to group time. of I think contracts that the was at at

of because And so and and were sense sense into a that separate have the or those those I last group our have update that as far of don't is so was current we my that and to from according worked individually plan. thesis relationship kind in those opportunities And coming pool. have but that what don't we a realized track

Operator

comes line question of Kaplan. the next Toni from Your

open. is line Your

Toni Kaplan

Any basically there if helpful? that but regard for helpful cross-selling. may how cross-selling some a bought. be insurance importance us of be driver. metrics think with have will to progress sometimes I the just of in are been years And be key sort the color could across in your number was trending, products past that average highlighted wondering that You’ve as to us of customers the would you’ve mentioned you And I give growth that's just your the understand

Mark Anquillare

think positive which I’ve for year. Toni So Day appreciate started had this we’ve We day slide prepare I the remembering this every results. it Investor and you to used similar I actually

different across we've And - have sales approach into to sales we we a products this project of such have team a of little products. looking we team we the of we have of business in way have about bit and what win our force North call - do recall our account we’re progressing. of a have done kind chalkboard realigned outside America trying that’s that’s the number to XX that think And every - the this focused all competitive day to we as planning you where kind XX I we’re grouped categories. checkerboard

a needs, lines being I We We on suite that them of of winning. products lines perspective those our and combination commercial dive at lines to and gives understanding have revenue commercial our deep look it And it been broader and a sales. products we and personal able lines And focus or themselves the billings what basically teams customer type organized personal from are pipeline on like broader focus closed a customer’s we our of quarter. retention, of and from the to think new or on a customer solutions products sell has on. every things monthly focus are with that we a new

be those process metrics that positive. So continue to

Toni Kaplan

ask my capital I follow-up on Lee wanted again. to allocation And

average have you target, that's so line peers. leverage currently the say X.X in And of with times I'd gross

one be you higher level Your that or you a don’t but want environments, business may argue hand the could recurring, could is to lower. very be other higher in highly so sustain on certain

that is the right times on it? wanted just thoughts around is thoughts Thanks. to So your hear what a dynamic target are target two that and your

Lee Shavel

briefly, leverage the within are And very three Toni I X.X times we managing generally range. think to

I think category. our ratings we our what with expectations consistent that’s rate run believe is for

range? would think it kind towards the of be I it or So kind higher about may being that, that is lower target of within as but towards the end end our

Operator

of Tong. line question comes the Your from next George

line is Your open.

Allison Chou

progression and for Allison margins? between reported taking deals more organic thanks and made the specifically is process gap we question. on my how This those for the comment Chou acquisitions of of integrating on the narrow George you've the Can you various to integrating can expect

Mark Anquillare

Lee One so of the that which the three that of the we regional happy than there in fall a a brought I'm organic. into really one may second questions two we take the companies one asking interplay categories. momentum actually there. with which very together happy set be inorganic becoming imaging you’re is progress in as on Well the would made we've into national integration primary between with XXXX stitched companies capability, just

because lastly and we we we've on PowerAdvocate then PowerAdvocate, actually the is actually facilitate energy where our customer very other concerned directions made other relatedness textbook their do sales both folks of data And is opportunities out to gets upon that And I things that it use a as over draws funny presenting based invasive to from our opportunities London amounts digitally acquired customers help large PowerAdvocate energy are one transform. for the that. managing so right word market And as would we Sequel already systems. I'll at systems customers into that in flows integrated product integration, companies has already been side. and good Secondly, it data in come and has the say the a of that noted

it's respect integration. So on green comment organic crossover to if inorganic I to just to all want with that. don’t you just Lee, lights

Lee Shavel

There to are could think you One to investors organic influence so of have like-for-like wanted So the on hit that is acquisition the have in do I’m the analysts that we and associated about see are an components. you the is both periods. comparison we going with that really nonrecurring. a as that touch three without to upfront going before that. think three delta, be, components there costs I But deal think I provide

improve so with relative reported that And to the on those the will impact will that those margin. near-term on dealers margins expectation pass

integrate impact. material what the distribution hope Secondly, the into have going of blended not each scale productivity. impact and business, important a negative of as component generally a But leverage the overall, that operating - to our improving the that’s acquisitions of the we do have by the or positive margins of at with extending the the the improving business acquisitions margin most is may our the on to we

that expectation towards that over And to - we What’s something not through either see bring historical that the on margin are additional time that their going well so with expect will cost leverage can acquisitions the side. our these or natural they margins trend on as the we of each that's grow reported captured revenue benefits we the improvement plus margin. is operating

to about way the I about think given of a organic reported that trend So that's the period. in margin the relative

Scott Stephenson

think next you In going questions very two time there question. much. so the of Thank the I we’re move interest were to to there

Operator

Your comes Joseph from next of the Foresi. line question

Your line open. is

Mike Reid

mid This just the kind business Was is thinking Mike Reid on seeing now. for single-digit Joe. growth about of and we’re energy

going and improve client with could large Just forward to better potentially oil prices when investment from the banking it turning CapEx or look this off? a rolls without good improves headwind that at way if the

Mark Anquillare

I got the is years. the things said two three verticals one growing and hard it's Yes, be fastest will handicap I coming five we've earlier which as mean in to

is you energy And have of we those we about factors a fundamental based a has the know energy while do followed us promise, for think of lot who I a that talked of lot what on multiyear there. agreements. in work that

think those effects the pulled been And to we - just agreements commodity time, we effects out what continue these do. that we've cycle. as will be through of so the constructive And cycling we essentially with down in seen

So a positive we very outlook. have

Mike Reid

I think then year noticed but take minimized, And still looking you previously be year? to you would opportunities advantage price increases pricing of this may next be

Mark Anquillare

the Are on energy you vertical.

Mike Reid

insurance. talking was I no No,

Mark Anquillare

is Price do. always inside factor of we a what

and the don't the year-over-year same that. products know back customers Our come

most think in we there naturally price So the escalation has of everything associated price do. almost with multiyear year-over-year them. we insurance I in agreements progression is Mark write

see less So that's the than meaningful more our past. don't or a effect persistent in I has business. becoming it as been it in

Operator

question comes next line the off Andrew from Jeffrey. Your

open. line is Your

Andrew Jeffrey

it out, so how your Quickly Internet-of-Things could articulate that forth? little strategy your a affects solutions I you and if how bit you see playing functionally wondered

Scott Stephenson

Sure.

between speed it car. up We've the and insurers you me loss the inside and effectively and what think kind things of can the a much thereof. announcements of of information relationships trying as process that telematics focus, claim manufacturers lot the in the we handle process buildings around we first can notification and combination we let payment from the with the very and Two but we I primary not efficiently are seen to even from start more notice that So just have the side of claims we aggregate put starts probably homes. OEMs car cars, and feel in so both

is is news information a money. pricing insurance cars the department driver So tell claims in and your it of policyholders, how that good item policy. the that helps mobile how from effective saves behavior side, fast The And and is information from connected you good and and it’s underwriting the pricing. can helps about devices about on available

personal bring steps lines to we kind taking So are commercial that pricing. of into information both and

assessing can in better risk that pricing it. customers be insurance active our that and and So more

Scott Stephenson

think we I Carl. final And question have one here

Operator

of be coming line the from final Ridley-Lane. The David question will

line is Your open.

David Ridley-Lane

to to counts are Thank you. client Within how relative peak revenue the area? I'm segment, revenue understand we WoodMac has proceeded. hoping of energy prior and the core core cyclical or rebound far where WoodMac And in that research

Scott Stephenson

is high. retention client So very

to we've used agreements - multiyear noted So agreements progression the Basically research since work. been as related year, It And new the to a fact has could forward. I the the as we be an turn we which the effective at within than We the we’re it’s have. you rolling we commodity consider multiyear work of last function now. no seen of to is sort of this is and in go that signed. really continue really before, condition have environment customers call more commodity will the in longer being off, that of a That issue. normalized

productive So the future. to and today able work for hope the it’s in to we constructive and we’re work selling the sell

Scott Stephenson

a We thank sure I'm your you All you. in no quarters. next we’ll interest and and immediate than to be right appreciate of talking follow-ups everybody, later lot

great Have very thanks much. day. So a

Operator

This concludes today's conference.

may now You disconnect.

Verisk Analytics (VRSK) 1 Aug 182018 Q2 Earnings call transcript