VRSK - Earnings call transcript Q1 2022

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Operator

Good day, everyone, and welcome to the Verisk First Quarter 2022 Earnings Results Conference Call. This call is being recorded. Currently, all participants are in a listen-only mode. After today’s prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] For opening remarks and introductions, I would like to turn the call over to Verisk's Head of Investor Relations, Ms. Brodbar. Stacey Ms. ahead. go please Brodbar,

Stacey Brodbar

you, Justin, joining first We you day, XXXX and today for good us our results. everyone. a financial appreciate Thank discussion quarter of

associated be presentation Chief The Stephenson, On our section release dial-in. referenced to are can Operating the on A of earnings well and this Officer and as will our have CEO; Verisk's has Chief attached Executive President; replay Chief Officer; Investors as and in incoming this and the SEC. call we Grover, be XX-Q found Chairman, been Mark the call to and that Anquillare, Lee Scott quarterly website, our release President earnings David call an and on Accounting incoming available website Shavel, by the The of earnings and days, furnished for verisk.com. traditional Controller X-K also XX Officer.

growth over GAAP X-K. note are turn the recent the Verisk and organic for in like And to forth to excluded I remind and is our performance. the would is also set could could as from our like Scott. our that in future materially earnings now to A Actual of results in currency dispositions today's today's Information today. in comments provided performance included constant consolidated forward-looking that figures. is by our XE about financial affect factors include recent what from that call in contained Finally, SEC may results differ filings. I'd Financial are all everyone future I statements detail will suggested performance more reconciliation Services about release, call our

Scott Stephenson

the Verisk deliver XXXX And we growth Chairman highest integrity. privilege joining been been proud serve that day, our our we had acting my It's and CEO for XX customers, Good at And absolute the an the by earnings value I'm years Stacey. value us that for for we transformative a thank created always first and such for journey. and incredible The this company. of call. past shareholders. during delivered rewarding of conference quarter level everyone. to Thanks, you incredibly with time as and employees

all has or incoming team a our effort. To who a analytics President, Our continued growth look deep Anquillare, been we for will forward I'm becoming of our to CEO. provider. including teammates always have innovation and success Mark drive delighted company's Verisk growth data that Lee drive do solution and end company global a bench and Shavel focused that I talent, to I towards incoming Verisk know will work the insurance success. seeing long-term such

wanted your this that that, and I'll Verisk turn and also my the covered final call take the a As the earnings And have is to all analysts thank to over support shareholders I Lee. to effort your for years. moment call, over with

Lee Shavel

best in Thanks, learn for very and support retirement. work Good delivered your Scott, have share first that counsel. been has I'm and fortunate let to to wish the I'm your with Verisk Verisk day you Scott, everyone. well-deserved and to a results. from and to the quarter privilege years over five ongoing you pleased past you solid me thank Verisk. entire you all We service behalf of your On team, dedication and the It

segment higher fees, Solutions, discrete constant growth Claims organic Solutions X.X% across Extreme Business organic delivered reported Analytics. currency adjusted for quarter professional Events revenue Adjusted grew organic Russia with of fastest grew revenue and and operations adjusted growth constant Marketing EBITDA in Insurance, Solutions, insurance and currency our solid Specialty and X.X%. X.X% the impact We International grew of Life grew the constant the X.X% organic commercial in currency EBITDA First currency constant the suspension

with We from growth across both continued to and industry also in see Within in consulting we solutions standard the mining. metals energy subscriptions improving results had strongest solid transition, and the chemicals and contributions our underwriting. energy

softness compensation, as carriers certain including industry. which of experienced businesses, new continued within our weakness experiencing workers We transactional is to regulation in are have the adjusting

In weaker property season transactional estimating addition, in last slower versus growth a solutions year's related our had to storm Texas. storms ice

with auto continues underwriting the of business shopping activity. level Finally, deal to a lower

in in the Our increased results the from discrete professional operations also in higher the and of commercial normalization post-pandemic the costs, of entertainment partial Russia, travel quarter, included suspension headwinds and environment. cloud fees

officially to as with forward. of for we will We offices the meet over build section visited stepping Lehi, all these role provide have Utah, I'm last financial review teams In the Boston, and the our going business days, of units. the in call. employees CEO more longtime preparation City colleagues, course are our and of and into to individuals on London, relationships on leadership the details Jersey of these excited Many XX

play ever I'm and about to depth energized the more opportunity extraordinary a known as the more with a partner we most I've interacted significant meet the whom valued some tenure than the we my expand the than our I've have had addition, breadth technology role our and here. of of those to long In to throughout customers, relationships. customers, opportunity I've of dozen with

what They to at their our use the of efficiencies value very Verisk better us economic the In them is to of deliver insurance support customers and digitization data And and expanded for strategically to decision-making customers help we order for turn efficiencies lines. product serve. select the improve our better in with industries and the and technology experience. to in to platforms facilitate new datasets across to enable to events customer And the understanding energy tangible and through Our risk complex value and look have our legacy Touchstone Events and of scale improved energy analytics for our to clear. is invest proposition Lens automation data Verisk claims. the business economy processes and the underwriting and also demand operational of customer we in impacts we that energy development and of to the life continue geopolitical to Solutions, continuing product of examples primary suite focus. clients. the transition our underwriting platform. through development Extreme our Ukraine strong the deliver Lightspeed The for unfold platform customers delivery a demand and global delivered on remain on of There are and in

analytics We be will our Growth single-digit of capital this efficiency. these the contracts are In industry at be able from deliver through they which decisions shareholders consecutive was priority material continue adopting the individually. multiyear have create been fact, mid-to-high fourth new primary over that lift the be as first than as by growth helped our for on invested new value quarter with my on customers scale upsell customers, of along and Lens and to from our quarter CEO our the recognize continue growth can long-term, and value ACB highest will creation with to deliver and we benefit clients to insurance invested to datasets both we for increased utilize ability the for the and technologies their driver In of delivers. to dollar both. drive better platform engines energy, and data to rapidly ingest per make growing growing our demand will from greater and operational value returns

for attractive focus value massive can require investment requires also customers. value in industries areas in positioned that well are our employees will where we maximize opportunities in and It for our with We a delivering rely We sure very must and for that talent, best effort. brightest. highly we remains be a their and market Verisk when commitment and the destination competitive in operate for talent for

our towards to our focused strategy activities our an analytics the long-term both data an we insurance enhance Moving to I shareholder near-term on creation solutions to from provide value. focus provider to our being and drive expansion. achieving described value margin on commitment wanted update progress

We are the on progress business. steady of separation energy the making

legal, planning detailed costs valuation conditions we engaged and analysis and operational actively are the subject separating tax financial, business. structure We to pursue value transaction in to the of will shareholder intend considerations. that This the exercise and with inform associated modeling and market a

cost improvement lease include margin as opportunities for our new locations EBITDA consolidation will of locations, the expectations identified come or corporate the Our sudden level On still more due, extent of optimization These have The to describe and and leases on-premise available. are increased talent technology organic certain opportunities as Mark closure we at real operating hires drive centers. timing investment, in estate of global our objectives the early several efficient efficiencies areas detail greater of unchanged. usage remain including expansion. those to our the data

the We Services. overhead sale corporate Verisk will after services Xd associated transition also we Financial and the reduce complete of with agreements

a being previously announced the focused in data analytics the towards of we provider. moving company solutions As continues global insurance mid-March, goal

XXXX segment rate Indeed, does account EBITDA XXX to consolidated businesses basis allocated does to costs a insurance and for number points. not first XXX business XX% represent of the corporate a delivered a offsets, against run remaining margin XX% that baseline the to in margins, business of now We not focused margin for of expect normalized of deliver overhead adjusted normalized expansion to our EBITDA insurance XX% XXXX. as by adjusted basis points the EBITDA it XX%, insurance other approximately including XXX

XXX entertainment cloud basis impact over travel last basis Second, transition, finally, expenses, the of XX made quarters, acquisitions strategic three And points. points. the a post-pandemic incremental combined insurance for for two approximately and approximately related the normalization and

In inflationary are note, portfolio in in to of issues. will financial margins these as will compensation new quite the provide point as when target. efficiency the effects and to basis pressure well implementation greater near-term costs, investments We fully noisy due as the addition, the XXX and competitive should of likely impact systems the capital implemented human XXX but environmental in other pressures, and embedded XXXX to but all opportunities impact is changes be well

work our the EBITDA to most changes XXXX we originally in the ability be Based implementation. confident our timing visible impacts stated expansion for we very are we target to As beginning by such, expansion the in of expect past to-date, portfolio in we achieve XXXX our disclosed. on move margin as as

Mark, search. a it the me provide CFO let turning Before quick on update over to

turn to continue for acting In been and now progress Officer over insurance as are with on job. Accounting prioritizing make operational Mark some has and Interim for efficiency David Financial the experience. CFOs companies We business. and Chief this it more Officer meantime, suited Chief to Verisk’s I'll well Grover, public color is Controller the

Mark Anquillare

Lee. Thanks,

to move and in a to very a all acquired to we're timed your pleasure customer Verisk synergizing on that marketing, cycles with next the well thank our results with build head existing and Solutions. wish Before our way Across retirement. Jornaya future growth to seeing with newly we our the newly delivered underwriting to improved you outreach, contributed these right by our Solutions. both more you use that Insurance I Claim growth innovate, T&C foundation always rooted We're addition that he for programs, insurance combine and share enhance chapter customers has insurance all success acquisition the we're teams Solutions, Scott you're our intelligent business excited and portfolios I to we of carriers these Life I the to I'm the by for the solutions partner and optimize build by seeing pleased for want seeing the personal for to been begin, is customers. for driven best Within quarter. and years. lines segmentation growth moment Marketing has in to being excited and lead also customers, Verisk. Claims our products further is about as I'm adoption cases The commercial capabilities legacy in as take marketing, Within from acquired businesses renewal It from opportunity deliver strong for and as to as retention. strong offerings. solid from contributions of driven story. of and like segment from another leaving monitor strong new expanded core, continued strong using And

Life seeing along customers Verisk to with All of deals we Insurance of stream platform benefits standardizing delivering customers. growth well the our annuity and expansion for with flexible new Solutions the new relationships insurance with Within our the continue Life transformation. customers are customers. very of as signing and existing extension strong recognize Touchdown life their digital addition Our multiyear in customers of with as existing help module well and software as growth of on as platform. the solutions a events, core fast strong are with while

in more in Verisk In deals be bond addition, the of continued the placed catastrophe the participating quarter. to than strong, market half with

Our financial sustainability corporate is business also ratings marketplace. focus In digits. the launched financial as risk as both double the is quarter the whose right quarter sector early the the we for and demand an and indices sector, resilience in very strong had strong a on in ESG our and unmet ESG targeting sovereign encouraging risk interest need global

During efficient last industry healthy automated. on customers, Texas. ice compares This transactional same compensation the more negatively the by more and focused In discussions our weakness in storms we was as our we businesses continually storm-related carriers of well part in quarter, claims. hear experienced many tougher business, as that in continued insurance with travel, the our to on impacted digital, message, pandemic, year's more is the recovery new industry adjusting to as become many revenue and by international within in workers auto and including offset are regulation versus were the our the

experiencing related are to hardening premium lead costs these inflation, to factors. insurers rates inflationary This While increasing growth. are should faster reflecting

customers held ratemaking data key more In savings. risk. they ability through The further In sessions. Management the great combination XXX our person as expanding our better almost commercial To using investment been statistical our Conference, expand quicker, first data become characteristics of sources, new automated which surveys, be data virtual of addition, our again. million a Across big are be growth customer profitability. help a goes All just have Separately, to core cost customers of of Insurance in and slug third-party to interest drive rates been has our work properties encouraging focus has mission over a our to now strategic February, our [indiscernible] rising in databases portfolios contributors continues onsite XX.X database, be our added end, the another year XX.X a held Elevate to quarter. hosted successfully databases model driving to we wonderful. focus and XX sets helping and we efficiency that events plus we virtual more data we've XXX frequently. work said, been and advance we've many to from the March, the into customers ago, property technologies, our up to with events, data was of that with and this We in we for two sessions. person to and our the signature accurately customers had our attendees we Fraud both of has in hybrid in person successful. On have quarter Conference, update It better

with quarter technology the Canada's intelligence leading further market, of intelligence. expands footprint and provider and risk Canadian optic it their in supports property the acquired solutions, we Opta, reshaping business acquisition innovative management valuable During the

Verisk of industry the ongoing transaction As offers into organization across for Opta only considered for This welcome team analytics Verisk and and through carriers expansion to portfolio. immediate widely regular the to loss opportunity Canada standard that family. product Opta with control We're is the Verisk data in underwriting excited property harmonization and the validates Canada the and leading provides gathers valuations, risk to intelligence and the data often services. research provider

Finally, around I to operational take to to efficiency. that a comments want minute made we the add

detailed costs we our in Within throughout our a business segment, the have insurance study units. across all engaged

and exist product talent open of future infrastructure, without timely improved manner. real diligently cost for in efficient realize to expenses procurement, Such areas savings we our work and technology optimization, impacting identified use We growth in positions, to sourcing have be opportunities. of a locations opportunities eliminated and increased estate, these low-cost

for review. to the me financial over turn let interim the CFO, David Grover, Now, call

David Grover

Thanks Mark.

a quarter to $XXX share GAAP Verisk while XXXX, and the per to basis, X.X% diluted on million, For revenues increased $XXX consolidated million. Net grew to income $X.XX. XXX% first increased to attributable attributable of Verisk earnings to XXX% GAAP

health of and include of results GAAP our Our after $XXX environmental million the impact sale on gain the tax safety business. a

organic constant currency of as press in items non-GAAP the defined financial release. to section for adjusted Moving non-operating our measures results our

our We our In consistent our first improvement segment strength constant results operating revenues. grew by currency within sequential continued X.X% are revenues driven led energy segment. insurance in quarter, in pleased the with growth by subscription and continued our organic and

both Our headwind includes COVID-related XX to of the X.X% inorganic well our adjusted professional revenues and of EBITDA district and certain adjusting in Adjusting was our modest our revenues approximately level commercial EBITDA in was costs, more our operations subscription the points EBITDA suspension as into suspension margin, technological quarter, X.X%, transition with X.X%. have Russia, basis impact business. a $X XX.X%. the Consolidated back revenues which recent Russia, for of revenues of including and the of in was higher energy expenses This from EBITDA related OCC X.X%. grown increased points cost XX business includes professional acquisitions, prior we of approximately constant higher fees. X.X%. cloud which organic strategic transactional organic ongoing adjusted from as Total million costs includes first a also of transformation, while adjusted Consolidated into the increased growth of basis associated return for headwind year adjusted operations, Russian the in would margin level revenues fees currency It structure. absorbed OCC

on includes growth while in beneficial X.X%, the Certain increased quarter In travel claim increased a international turn up timing let's revenues versus into the to expenses Finally, industry insurance This Adjusted this previously note, level while an margins the have Energy The and year's Solutions, cloud higher fourth Insurance our the to heavier that that our of the X.X% this like Claims benefited businesses transactional insurance constant travel experienced standard ice first high revenues Subscription basis But EBITDA quarter, quarter. solutions. compensation, international solid basis. first organic a Solutions. remainder business. of to markets Business to commodity margin the back reflect that continued saw healthy programs, recently quarter, Solutions. Specialty softness On return difference was in has specialized first results Life over corporate X.X% International and storms from revenues our a for will acceleration also burden solutions the X.X% including impact our from Extreme revenue We season transactional offset and which from our in higher auto normalizing been in suspended and of continues and related growth margins in by impact executive energy volatile revenues in currency to disposed. allocated Marketing grew declined were quarter insurance compensation. businesses, operations slower X.X%, storm areas costs XXX reflected XXXX. reverse also Russia, Event of segment end-market the segment Solutions Texas margin be last Insurance a workers investments of X.X%. These growth was expense recovery grew prices. points acquired Life The were Solutions, Analytics and in businesses of the continued XX.X%. but

customers than they financial position much in two Our just years ago. a stronger are were

the as adjusted revenues for Russian increased X.X% the increased appetite advanced Our capitalizing subscription we analytics. for impact on when are

subscriptions. delivered double-digit and modest we quarter, coupled our the energy growth core chemicals research in in research growth During transition with

says that are multi-year of in This customers platforms to our the evidenced strong Lens analytic customers of by new adoption for seeing size environment. logo include benefit over existing through is integrated increases contracts value Lens. cloud-based of contract continue the and material We upsell adoption data from

ACV had of managing XXXX, quarter related to we X.X% Russia. includes renewal adjusted quarter consulting single the are by in margin X.X%. impact, in decreased have work. increased constrained suspension to contracted consecutive only margins of EBITDA take points was growth. and the first in the incremental cycle as value actively Russian X.X% in another growth been Adjusted operations quarter EBITDA would for our Normalizing growth fourth mid-to-high the but the in Transactional XXX on also $X.X to resources revenues This basis expense highest million to XX.X%. successful first of digit We resulting

In expenses build higher investment reflected platform transition, margin return business. into metals of continued It in the and Russia maximum as to and Lens garner power, the we mining. the chemicals, addition reflects level out further expense, the expenses also value energy capabilities this cloud and to including for travel Lens back

remainder of numbers services reported adjusted the the the loss the April revenues sale by included not to to close XXXX, Russian Looking our Financial each currency within on in figures. VFS EBITDA quarter and million constant $X X. TransUnion organic of will our We approximately quarter. but of impact per were

to quarter, Our XX.X% sale was certain reported over the the the effective XX.X% in tax non-recurring prior basis tax of benefited rate points quarterly by to adjustments rate year compared XXX XE. from relating

in $XXX provided the the the Net March. period, disposition our X.X% XX% in prior cash timing versus up count. average XE quarter, quarter $X.XX exercises. EPS of reflected development, three X% reflecting of for certain growth for differences Looking in were share by we XXXX. we expect will the of quarter year, likely of of and million ahead part to tax increases These impact acquisitions, for of and and closed employee savings Adjusted and of operating stock expenditures variability to lower the option to move the from effective net a year the the between first reflecting there diluted quarterly cloud. software third-party middle software hardware contributions face a in be to the increased Capital on rates each last remainder offset in business as rate was XX% $XX to organic XX% increases million million and quarters, by from income in next tax the to XXXX, activities some still collections, the the related the capitalized increased be lower $XXX down X% which adjusted

expect there's software million. development our Lens extending $XXX in into expect acceleration to investments we core to continue software believe pace to We capital of through our Related of depreciation $XXX amortization and development future million activity. to amortization our are underwriting variability, elements CapEx This the fixed to expenditures opportunity and approximately plans be million million $XXX projects, where platform be M&A intangible our to the we supports ethics the Both subject completion million. asset enhancement. of for range and to a increase within of purchases, now and approximately amortization similar timing and depreciation the $XXX to be should $XXX of

During returned behind growth return dividends, quarter, in the we as initiatives repurchases share while flow million shareholders highest first $XXX shareholders through strong also to cash our highest capital and capital invest to allows us consistently. our returning to and

We continue over And proceeds pace program. for normal closing to to some deploy to after now the I'll which generally of in expect Lee back financial tax sale various share businesses to addition repurchases, through our of our repurchases executed ASR the turn are and an from for quarterly call XE comments.

Lee Shavel

in operational Thanks, the our are and the initiatives, of on important our separation including margins. our executing and progress Dave. energy strategic In businesses business making improvement summary, we are strong, and

options the and focus energy the stakeholders. evaluate we pursuing on to continue the shareholders our business, all value various path most As for for creating we will

transformation We to in growth cost we OCC beyond. and deliver our growth in growth are and can line ahead revenue objectives, of portfolio with and long-term of confident XXXX adjusted EBITDA our return management, active that the

one And questions. question. ask in interest operator and for that, support the you I'll have with open us, yourself appreciate to to the line number continue that the large given covering we to of we analysts limit Verisk the ask We

Operator

the comes question Your of Kramm first [Operator line from from Alex Instructions] UBS.

open. question. is ask Please Your line your

Alex Kramm

morning, Yes. Hey, good everyone.

margin of So for clarification upside. the on thanks the base for some the

raised I think some a just and that bit. think little been there's Maybe confusion. to you I

by us can to catch I that about made maybe of improvement? that, just some fully. point talked I talk you think basis see to get XXXX XXXX. maybe And that to us to a would XXX may We you about cadence or XXX. related a XXX XXX on So really then that benefits. -- But the it year remind didn't little comment achieve you will of bit Thank the of that the it's really in for maybe something helpful. and realized is event? you something XXXX a you see the you. XXXX year end to be So full cadence more Is a

Lee Shavel

Yes. Thank you, Alex.

yes, will and took XXXX in we the And is run XXX I in rate you that towards into So going to have a think XXXX, year I in we as going achievement then remain of basis point be expectation XXXX is a comments think the in that are effects look There indicated, that XXXX, expenses that confident are terms rate. noisy. to demonstrate we accurately, full base of -- will have what lot as we to working on achieved basis. year on XXX progress is a represent full a And XXXX our basis improvements. of

for we XXXX question are with. confident remain and your is, is I whole a is think objective went achieving that so our XXXX And targeting Alex something to what I we that that as think believe exiting we that that you're anticipating with? No,

Operator

question from next of Your Kaplan comes line Morgan Toni the Stanley. from

Your question. your line ask is Please open,

Greg Parrish

And about review a Tony, to a on more up with XXX of lot of closing why happened thinks, down have you them, incorporate there. anyway. that the backdrop potentially to I'm a that thanks with out Parrish the Hey, found, number. Does you points of is it’s expansion, question. would for some shareholder this cost all probably a structure margin to Greg think I XXX And stick of data centers come talked dive there's doing today Scott. to I asking a Want all our for the the mean, best opportunities with basis the deep taking like

the you way know delta there's if here. can I So don't frame Thanks. a

Lee Shavel

to we supplement all will Greg. the shareholders. Mark I start received Sure, have And you. that ask have we Thank of comments. at suggestions looked let off, me from comprehensively But my

have We those. examined

the also there from quantum naturally for to an it's not savings, drilled that to of within amount growth opportunities XXX stronger several good And them. had types drives have investment and that on important understand years. are going is supporting into the to XXX we've business. just perspective. with We over those I this that we we substantial reflects next of rates, think a external opportunity the the investments And basis internal And that of pursuing conversations be returns business from points but the cost think other an the

lower I we may and standpoint we growth, a see leverage that. and operating are that in good for opportunity answer the making return margin, cost savings described have as beyond question, And that we investments also are think to certain near-term a I've good do But from projects utilizing, so over opportunities time. go but before, that your represent

So relates a are sense for we scope, would to gives the overall is that want growth our Mark to hopefully business looking of return that the and it you how that? quantum at and you of to anything there add management that both the objectives.

Mark Anquillare

Lee. No,

think was just will said I I well highlight that. it

We looking have to to lot an want organic the growth products what the think very combination as we've that's every across division. we categories, effective? And account more we theme and can be gone different I here more this. across to is we into How efficient of a that gotten we're And rethought. key how be all to sure a every deep of can make this. and grow well as will we invest to grow in But is may I as to need emphasize, future continue we because continue be have

progress So it's I we're we've But making confident. very think and delicate here act. been good balancing a

Operator

Markets. Capital Ashish the from comes Your RBC from next question of Sabadra line

is Your open. Please your ask line question.

Ashish Sabadra

I taking X%. Thanks on insurance my wanted focus growth OCC the for of to question. just

the was six strength is headwinds in businesses. underperform So demand robust. or industry longer-term strong stay to like just behind expectation despite background well. the growth as pretty Obviously, pretty talked several a some there the are about But organic of environment. one-time continues I We wondering

midterm? of this long-term items So streamline group efficient to off? 'XX.? that get some as it see improvement how Can going we these as in just to and growth about mid as think focusing we an you you should the forward, growth. back then Can maybe plus the off one highlight come profile more growth on to Thanks. business And X% you over

Lee Shavel

to the revenue. regard with revenue subscription start in set color transactional your that in a you some revenue constant business a quarter, turn revenue. revenue pressured So some is, I'm aside making the comments, was to growth highlighted Medicare with of some in achieved our caution of to organic that X.X%, and Ashish And off revenue. changes, we question. it in versus to then pandemic, our subscription part by insurance Dave's over for Mark to around But hangover was non-subscription non-subscription weaker thank from the comment to regulatory within of that. and give for our first regard compositional the the we function our question, insurance that high-level going currency And

In addition, ice activity. we a continue Texas had in to see lower year storms then, the due to the auto we prior And tougher compare period. purchasing finally,

rate. below So I we the overall revenue that near the businesses, other component largest side growth growth, lower driver fact you have think the that was give primary transactional the really term the can some the think not that target, stepping That transactional the very in of the press the of the solid, around revenue. elements. within strength X% any of and away Mark, on was subscription and from context But most important some subscription was component, we

Mark Anquillare

storms bit X% is we're look provide go good ’XX just an perspective, as can insurance, little we two and And quietness, One, of ‘XX. shopping last of places. forward, working as that under I of to volumes a of on in 'XX, at see pandemic. of Texas ups strength the a as I did. back auto result a in the least insurance still obviously One, Lee. the I think in in there that aren't type just the to from be color little people as as some for once the of a a non-subs quite car business. -- Yes, provided seems the downs against Two, storms frequent year, a we they in X.X headwind revenue. indication comp insurance

now. at probably the they with they're content think I least have rates

those your to rise, will we've again of just have of to many how down. going claims, around approach to just start activity there's rates comp claims and people begin some not workers as generally hits, workers home, drop to world the they're shop. the changes inflation XX%. As with In And claims. comp probably it's paused that And is regulatory insurers seen maybe of some been

to the But extreme So those of business, are with emphasize which core or very what side like whether line the fraud non-subs exception events, claims specifics strong. the underwriting our is subscription I business with regard and things, analytics it's finding to non-subscriptions. services, from is again, the on,

strength was with year as norm, So we and with typically first growth pleased I we the as progresses the insurance. have And have is quarter.

So thank you.

Lee Shavel

see with about because for to think for what I shareholders. creating think operations, are our back for I to industry, more growth area the where constructive solutions sit can a and industry partner can more past digital businesses, naturally we our that focused within on tremendous act take trajectory. Ashish, to value term costs experience technology comes broadly want mark. one be we for conversations and as improve the for opportunities this where a my I if with as good your is also well from the And to clients. do, certainly, Ashish, we drive improve question the whole efficiency we thanks And out value that that our And think come value we longer address us will of their out, find existing to their that role, for insurance their is customers, look of customers. ability the to a to and as creating of for substantial utility their And But environment industry demand. on experience, our And a some I'll as in I think we're continues opportunity

Operator

of Andrew the Your line next Steinerman from from JPMorgan. question comes

your is question. Please line Your open. ask

Andrew Steinerman

Hi. to expansion. about that I just margin wanted talk

if the So XX% Does 'XX. up include that Going to is does that or the tax to base margin for the basis XX? comment different of by not you rate now a And on that's if XX% is much energy kind than of XX be energy XX points to saying XXX today. then businesses XXX XX to the can will business. make you energy assume part the various business x meaning

Lee Shavel

Andrew. Yes. Thank you,

XXX separated energy. the we XXX half let me that have confirm of assumes XX% points that to to basis So that first XX%

looks we did what business we reference, the what trying consolidated do standpoint. to as so statement, is are like and insurance original margin focused And a from in provide the

maintain explicitly basis. assumes still we on it legal separated to at rate, a tried just regard efficiencies we think a of the think utilize what I point, the tax, we're tax we I entities are tax that the part don't as we to change to complexity legal read on I anticipating trying dramatic within And sorting that the those the get that So precise have the we jurisdictions. our but have a tax fact through that exercise, are energy within And want utilize of to context. global at that this more look of implications in as are. we with some

Operator

Raymond Your next Greg line the question of comes from James. Peters from

Your lines open, please ask your questions.

Greg Peters

morning. Good

And noted around going to comments Slide presentation, the of slide. I'm is expenditures guidance So your which XX, capital CapEx. regarding investor I on focus the

related I'm match. that you and this to doesn't have digit XX. this in So you're target trying it to when of mid-single seem certainly relates much CapEx of year, to on over just businesses. how set And the this that level the trying because expense, understand us CapEx here flip And time, over history the for you what Slide guidance specifically, non-insurance to pieces getting showing with to

So would helpful. be on any Thank perspective you. CapEx additional

Lee Shavel

has the Thank this for question. a appreciate focus Yes. I investors. you, I know been Greg.

and a various we way as function would revenue it, does that percentage that would Lens and segment we're XX, Services, MacKenzie our And a And on XXXX, the page that at of to note operating so we and to well Wood average. looking I for at this describe Verisk that particularly enhancements investment financial relative as it's made, as as if MacKenzie. making understand on the higher were the include I have at a VFS, Wood product XE important Financial were services we CapEx a of basis,

we did MacKenzie, that that to to past that expect we would four operating we if the of important. have lines reimagine we average rate overall the insurance will probably that be below to an notably with investment focused been looking have continue be Wood so investment across insurance, over at of and be been we platform continue years. But would are those with three will the the entity, Lens will our five areas opportunities, that we're similar on deliver while to at And benefits what believe types as there describing most

Operator

next Jeff Your Baird. from comes the line Meuler question from of

ask Please open. is line question. Your your

Jeff Meuler

answer. revisit And let just growth want guess way. it to present this I revenue structural me the

to what to You've tech growth you're That incremental on back just underwriting non-U.S. as you I if been guess, the I first? you. not just drivers a Thank if commit or there's to lot want if what you me. about you're talking us show areas, Are wise opportunities. drivers? me know growth invested growth the and for those new of a extent lot like There's there's opportunities But they a to pricing understand help lot in do if selling wanting dive are growth maturing incremental, you sure in software marketing target several general, the CapEx more drivers? business. like platform not offsets of sounds the to to don't a or new deep sounds go-to-market

Lee Shavel

think this are there not there to I in where to business and there change point, I sorting that and Jeff. where of deinvest. the looking we're overall Thanks, a the as given Look, we that appreciate the perspective that stage opportunities the are businesses. have. where evaluating I And At are making that, invest, are assessment. growth think the to within separation agree of are opportunities out lot there Yes. prepared is the it's we two we business of exercise opportunities growth, that at early would insurance Part guidance

to made point X% as the constant think we We is be this thinking within are guidance. fulsome growth think insurance about the been But about that forward we've there still point revenues EBITDA recovery. description where an focus in to we focus able we're We've EBITDA believe in objective my are. stage, are of we're organic that leverage as how or growth, are take for opportunities, to subscription going investments. going through we the growth hopefully, would want we operating of as what But on ahead haven't making our we drive as target want and point, this insurance have reached refine I proceed to entity. our a higher and more the growth business I where achieve that there we And give lot at invest, of the opportunities think that are solid demonstrated a be to separation, that we show we X% we that respectable expecting revenue transactional growth currency continue think a the make insurance to with we to should that. very terms expectations. long-term we'll ready where to change of a expect about thoughtful

Operator

the of comes from question Bank from America. next line of Balsky Your Heather

your question. ask Please open. is line Your

Heather Balsky

for you Thank taking Hi. my question.

Just things. two

additional love I'd On the margin outlook, color.

range? you. to understand is, plan? the execute the that. basis the there part the The Thank terms I guess, costs? one-time Or are love And about end first any, of on gets in think how to better should I second points, one-time we high is to you versus as of XXX cost this I'd XXX low end what guess you

Lee Shavel

Heather. you, Thank

So low versus end the I appreciate question high-end. the on the

will and are doesn't of as of we opportunity that. identify that we want overall we One that the can the influence quantum much think simply business. there level as identify dimensions impact that two to I primary is the growth opportunity

improvement as as that's, much of pushing certainly to are laid And margin out achieve possible. have that so we we as

terms good is is described on before, is, the returns tension have overall basis. growth and you understand is beyond order then -- what of on support and necessary the to support, margin That you what you side point, returns think of of is that that in is element what to on investment expand achieve expand pre-investment to consume dynamic that. as to And we that growth the to and a of do is other of margin I've in a that. level investors, The the being many generated many what expansion

high our competition going so as through inflationary an are we environment for with And particularly, talent. costs, higher with

I that will the would into our environmental we business where have not But are tension primary the to and on going our and that influence end fundamental are OpEx overall on in that those decision be take range. evaluating returns growth of up may to describe invest, of what -- to objective where going deliberate we growth of be my savings, we primary impacting we're for as terms the as the margins. what But will cost are I are impact shareholders. foundation that account comments, We which in as that for is, quantum the as that creation impacts mentioned well value

Operator

Barclays. Your next of question line from comes Manav Patnaik from the

ask Your your question. open. Please line is

Manav Patnaik

over of recent of wanted to M&A what hoping spent you made. total the morning. Good key It these bunch assets. acquiring be. tuck-in all year a or I that on contribution like was just you so million us the areas looks focus you. and you've identify would should help some Thank perhaps the acquisitions for on XXX the just I

just impact, margin You some the of add. but revenue a on what does us from perspective, gave help that kind

Lee Shavel

to standpoint. of follow business around acquisitions? Mark, it the I what can And to question. nature through sector. those you for to been of calls recent we as some acquisitions, in will Manav, Stacey provide you turn ask impact. I'm you exclusively either up acquisition not the predominantly going have a insurance the our context in Mark the thank the from achieve to over And since insurance now to observed talk those tuck-in or talk expect about then,

Mark Anquillare

Sure.

let So is, to spot one, think to continue trying I focus me two you'll we -- themes globally that grow. on

extend that to this tried have the States. areas. we'd into And United we've wonderful So in franchise take and other

property, the should many takes doing an a) to base what States the we us same with things [Ferris] United a does with ability And it provides insured, do. us so it very [ph] very property in much aligned characteristics, So understand much into and that the Canada. be of Canada, the how foundation optic around underwriting value of in nice synergies,

a estimating cost We but a claims presence from strong limited perspective, have repair underwriting.

strategic hope very that in I kind that's regard. So of

a element The other we in Germany. is, a to claims auto bought business ACTINEO, around called business this international which represents

helps and acquisition an U.K. provides along great that and growth earlier in called us So U.K. had and extend as get Germany, Spain, the with in the takes some into into solution try synergies this product into to this set opportunity we've an And Validus some back also potentially wonderful in that area. us market. also we expand, but us

marketing. the bring segment, to customers, experienced board. expansion, we've focus. interested are lot trying customers Other again, on the very the is customers and and a trying really trying in they theme So international understand And to of to identify around it are they penetrate

We them have business and help quote tools wonderful and identify to that that select some risk.

think have shopping yes, to to about insurance for that And -- I'm information out a auto websites. as some of is kind homeowners that ID or insurance. that insurance. these lead out person. I've this is who's about So there. that there visibility I now [Indiscernible] us ID standard literally give shares been shopping for It extent the industry an on

the the and individual We are people where market And opportunity lot side meaning large that very in of asset, gaining and there a our house and person we're a naturally of underwriting the the marketing or insurance. been feel taking the it personal on focused extend already. the trying car we've we and to underwriting into is

a of provides bit little context strategic So hopefully like. that

Lee Shavel

Thank a thing one that on Mark. orientation is acquisition where an on and have business will an identify focus address with can of want elements, contribution able that is have pleased to the process. more one unit the been that shift adding been have the standpoint, an intensive acquisitions we you, we more business, before to portfolio we thing impact made add, have Manav to on from focused a And is I Stacey from have we integration driven we improved

good our FAST, insurance really so help industry by their accelerate industry. we the values, lot accelerate help with a adoption Sequel expectations for able we but can like to of technologies the demonstrate been acquisitions really and instance, that improved performance And Jornaya against and have

Stacey Brodbar

Manav And just out break contributions non-GAAP aware, there your release. for from a is in we the reconciliations in versus the tables press footnote our revenue acquisition-related disposition

an annualized During the on quarter, it basis. was million XX about

think when acquisitions in way revenue, the have roughly tuck-in annualized close about best $XXX are we just you're for the recent think I incremental those in to referring the phase timing acquisition. you'll million to to but

question? Next

Operator

next Your question Capital BMO from Markets. comes Silber Jeff line from of the

open. is line Please Your your ask question.

Jeff Silber

this you Thanks so for much. down the be items kind your about XXX the were it. But going which there insurance terms should points. said basis went Is run we I margins for of first I'm there. of a question rest segment? quarter, of segment, rate decline year-over-year by that of going apologizing use be expected in we noisy, year I number is in back to the if a know in should understand I the to segment. completely margin the this focus the want look on I and know to year insurance at just

Lee Shavel

Yes.

is Couple for think is the I to that the thanks the Jeff, insurance understand to that. of reallocation and expenses to the things. One, that important what's sector. So that of decline, contributor primary on energy that

separation And we so with what further That's that that and will that level. XX% allocation. gets you a to if achieve energy, XX% to be

be of if, of for run year. of some a professional effects good starting was that there will what be normal benefit costs. kind of expenses from instance, the point we within primary And reverse. But impact quarter, over will elements I have that mentioned quarter reallocation the to for think Now, in going that rate expenses understanding course the influence is the that a our that compensation the there discrete are we

Operator

Goldman comes of question next Tong Sachs. George from Your from line the

Your open. Please line is ask your question.

George Tong

thanks. morning. Hi, Good

over with Can to growth for in areas takeout through will star that, your what horizon XXXX of was expansion not And the targets amount of this spend the cost growth your your business elaborate investments are for time investments you focus growth strategies the back related on? of Going which future investments target. to growth capital? margin on balancing

Lee Shavel

George. I making obviously, start process in we Yes. a by Thank investments. are a I'll from you, the And the business real-time saying, standpoint, first, on question. basis, -- we are operating is appreciate

are approach And so we was investment on those, going the we what into believe maintaining right XXXX.

the are you and so that And of those so want investments to budget, within our maintain. types

believe go this in sustain the growth What is is kind are relative to expense advisable of the I most will discussion as XXXX, supportive. best and the Scott opportunity? typical the all where the is a options And of is to business at of year-end the savings. look that and actually from and we to and into the are growth trade-offs of We we What businesses think across level would the standpoint, is evaluate margin expand we the those, then all determine look the returns what we that have Mark for impact? investment to the what on and those

those ongoing we as identifying, to want are we over about focused on proceed the savings, of focus And on think then near-term so an basis where investment and within XXXX. implementing that our the we as business. And -- course cost achieving

by and monolithic planning. we that across trade-offs. There is invest determination business-by-business and long project-by-project and the to on a what almost We look will our not it perspective this is through because be necessity, evaluate a growth in business range budget to we our needs those at going are

that expansion margin So answer in I that's the that But outlined. are to, prioritize objectives you. achieving one, returns give trying while best we can probably the growth we've always

Operator

of question next Truist. Jeffery Andrew from from Your comes the line

ask line is open. question. your Your Please

Andrew Jeffrey

wanted cloud I and some insurance expect some your just though. associated cloud assume the expenses the specific be like Lee, go-to-market in Hi, state will steady that product good investment you question you longer-term here. are development your sort transition. benefits, can from to being talk margins. that Appreciate ROI cloud I about seems it efforts? transition there there NPI ask you of Two, that contemplate morning. a the with about

Lee Shavel

Sure. Thank you, Andrew.

both portfolio what were into look that expenses. you dimensions But that it's that the economic transition CapEx see it last investments across So to in in have to to cloud-based in naturally cloud important terms formerly generated an an is the as at have are that make CapEx want benefit meaning we our made. detailed a I entail cloud, point from effective our we OpEx savings that our from the does migration to understand our to that we achieving And value. of that have call, savings standpoint, first expenses OpEx of and of economic transition expenses

firstly, double-digit and where high that And return that I projects those economic an CapEx And we've is basis standpoint. so, is value, what say of made the investment we've the having on savings achieved generating and that then looked OpEx an generating from that. the on invested plus within a of at investments and we capital

do it believe that value and returns. contributing both we economic is So

of to understand Your the applications broader a experience to that the the from a those way, question, set. as are analytics cloud believe demonstration And data I had able standpoint. a do from benefits migration understand that is draw And coordination in into that. of it business more facilitate Lens of the consolidated the the we data and sets into cloud, is that integration that of we've the

and is, immediately, most of process economic value second well, a from or the as but and accomplish lines on can we achieve direction do. But more improved associate analytical a still overlap. But stage sets probably into with much clients, more the reimagined to for the achievement, that our data, sourcing the in say There's that terms in much we that But we data think environment broader infrastructure the where we broader and improvements. this as their consolidated we're generally, our in certainly access whole in may broader that I consistent focused efficiency, for are into effectively. first data the improvements our still that ultimately, becomes data, unrealized opportunity, moves as more improving more process benefit, utility core a of the architecture. can in terms also it see opportunity that industry I or And we us think, process. can more of facilitates opportunity. I the what think industry we're process is I would in an it. think ease legacy to systems. improve first, there's for ties achieved utilize a be areas, that's efficiency data from that on I certain which want integrate First, multiple largely And then processes, their we've It systems because customers to-date, And of

Operator

of next Your comes line question Bank. Faiza Alwy the from Deutsche from

your Please open. lines Your ask question.

Faiza Alwy

Are morning. about, good Yes. Lee, few savings. you a up talk wanted George's [indiscernible] cost follow and to able question. Hi. Thank you up. to I Maybe and to ask specific follow the

much those have impacted more about long-term growth interiors need included your potential impact is So estate? rate. is cost to of target? And whether longer margins locations. leverage and sort How future think related related you've are acquisitions employees margin you acquisitions the much few you much And to term How business? is make acquisitions that as your to savings of to real about made Do you the lastly, maybe you. you of a operating the other maybe and could if cost? related how talk in your margin and Thank expect in that

Lee Shavel

Yes.

questions to me. lot thanks knock to them one. one So a down throw at that's by Faiza But of try we'll

XXXX, over the by impact anticipating our element regard to of the generating developing have organic last as improves fact EBITDA we focus the expansion magnifies $X fundamentally question breakdown produces are margin growth operating cost can always really the on element of we that at we achieve that there operating this question I or our and leverage is point, as to naturally investment. dollar are on, ready our our rethink do embrace this The M&A. expense. We've is returns. aren't we been on we on at I opportunity your that question related operating that am the as level to detail and leverage, And solid key leverage. of where operating the the offset -- leverage. focus the With and the what of business So base on that growth focused stage we this And are businesses provide drive we the to into strong course growth,

question us we to maintain for from I businesses on in and for rely embedded I represent we no, do can are to added is, opportunities accelerate products business, products opportunities within is grow that of Extreme to strongly those of that the for have returns. internal answer short our to and generate with variety your create the Events that value with businesses within and our acquisitions that think believe number think areas, rate? claims our as our do growth we Lightspeed us. we've our a in higher growth a we been performing demonstrated look Solutions, all But growth there, and we've including businesses,

the ahead, become we that may to anticipate acquisitions can't obviously Looking available us.

negative those, we Our are acquisitions for have see we do acquisitions are and value do that impact. they margins. think if typically lower that growth margin And a have smaller, pursue creating, we will businesses higher may

impact through in probably be value accelerate to and have growth they're of returns. fact, would our In negative that likely margin drive both they're ability our but creation a focused objectives outside on to here, fundamentally overall

business consolidated have what So right assumptions business, our in be are. of making it upon as our and our based any but Those to that analysis that now that future we against can is based achieve on we terms opportunistic is aren't focus, insurance acquisitions discipline. the

Operator

Your line from comes Mazari next question from the Hamzah of Jefferies.

Your open. question. Please line is your ask

Hans Hoffman

you Hamza. today? is this past? you Hans model? have value-based through in you in And about Hi, talked maybe relative any price? to walk running on the know price is just history your pricing guys I Can much Hoffman us for how changes filling how And, pricing

Lee Shavel

we provide to view, high-level a Mark ask pricing me let dimensions. Hans, hundreds of products Yes. different obviously have with

it's again, pricing offer think perspectives value-based on perhaps a some you monolithic how about But we not can business. So Mark model?

Mark Anquillare

super. Yes,

tied to needs the our add align all, how of naturally, value typically customers we usually to element, our they of way premium. of in first is form big are, some which kind the So is

it our estimating basically side, some about it to we repair the solutions using number up you products, analytics tie on necessarily think our products just the So to doesn't premium, year-after-year extent core think how it's to but of or they're of claims. cost the try the the claims

do by what of process premium a based is think or that, typically to of to And trying then I the overall tried we've we inside a upon are. claims solution. holistic So set create relationship kind up are which size we

we trying are So solutions to together. bumble

the in the a three, provide contracts, three-year ability think set renew there and usually contracts. two of year I or there gives that price. year we one, value products, you increase color. to bit four, that But kind the we sometimes based hope contracts. is relationship to get years typically these three them. solution of come and the are they subscription a to year think little a And the revenue holistic strong. And and they five a opportunity is they And in of it's I bundle inflation XX% is I kind some include they have So of try

add we're that base. want existing always what different solutions a customer So new and or inside able maybe to us gives the big subsidiary very is continued to a add they opportunities upselling mix to

Operator

the of comes from Suisse. question next from Kevin McVeigh line Your Credit

ask Please line open. Your your question. is

Kevin McVeigh

And want it you CapEx should of so kind transition there the over to develop the internally software? should of to slide how internally to XX. well? software go kind Thanks down? Or on something versus with And in down we that, CapEx sits to the back go but me start then, expect segregate versus the to is of Does I to time, I Lee scale within anyway we that energy know, cloud to extent the insurance. it that happens Great. much. is developed energy a be much business, to journey? kind structural about think as declined, further going part how cloud

Lee Shavel

Yes. Thank Kevin. you,

XXXX just driven investment are on in to is, kind looking by comment relative at of above would would that average, be it leave as at we first the the So XXXX. side and now. The I of energy separation, this of level investment Lens kind that revenue right

changing And want to there before an guidance, we But separation, so at that we which would still that to. would that. look we expect be adhere evaluate that we on improvement

be an that savings the component we the we automation will our that is The second developed seeing we efficiency part to to important improve the can clients. continue value are slide, an but software internally our a important see better way or It that as invest whole. to deliver business clients. for within of for that on And creating your either will of software creating platforms it is for yes, CapEx that you question data, one, decisions make is, component be continue solutions way that as to

One Our that's are that because have standpoint, good business lot is think can we insurance in process we also businesses a them. that recognize create have that we of software intensive. the the acquired ecosystem. a thing the a of becoming essentially of in value more for participants from software And but and networks

that new Our the example for functionality data creates and is analytics Sequel of And probably supports utilize create best to that that the Business to business to us or provide opportunities Specialty that. ecosystem. Solutions,

acquisitions, recreate growth associated Jornaya, our look they that's more intensive we And that the with why software with in that to it's Fast, higher historically sequel, effect network within able have that when are markets at software, enjoyed way a our And of domestic business. in so would are so important we rate. note, I also are and you other

an for So ongoing that be will component us. an important

Lee Shavel

time with you day. as again So for think dialogue ongoing is of Thank that, final all I a your that question. his all proceed. today. with Scott we forward Thanks to our contributions and look for good the to you of we Have

Operator

This for conference call. participating. Thank concludes you today's

disconnect. now may You

Verisk Analytics (VRSK) 4 May 222022 Q1 Earnings call transcript