Verisk’s fourth quarter drew a positive market response, reflecting management’s focus on data-driven analytics and technology enhancement for the insurance sector. CEO Lee Shavel pointed to robust growth in subscription-based products, especially in underwriting and catastrophe solutions, despite subdued transactional revenue linked to muted weather activity. The sale of Verisk Marketing Solutions and the termination of the AccuLinks acquisition marked significant portfolio moves, with Shavel stating these actions reinforce Verisk’s commitment to core data and analytics offerings. Notably, new AI-powered claims tools like ExactGen and Exact AI were highlighted as drivers of operational efficiency and customer engagement.
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Verisk (VRSK) Q4 CY2025 Highlights:
- Revenue: $778.8 million vs analyst estimates of $773.5 million (5.9% year-on-year growth, 0.7% beat)
- Adjusted EPS: $1.82 vs analyst estimates of $1.61 (12.9% beat)
- Adjusted EBITDA: $436.6 million vs analyst estimates of $421.4 million (56.1% margin, 3.6% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $7.60 at the midpoint, missing analyst estimates by 1.3%
- EBITDA guidance for the upcoming financial year 2026 is $1.81 billion at the midpoint, below analyst estimates of $1.84 billion
- Operating Margin: 40.3%, down from 43% in the same quarter last year
- Constant Currency Revenue rose 5.2% year on year (8.6% in the same quarter last year)
- Market Capitalization: $26.37 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Verisk’s Q4 Earnings Call
- Toni Michele Kaplan (Morgan Stanley) asked whether clients prefer to use Verisk’s data to build their own AI products or rely on Verisk’s solutions. CEO Lee Shavel explained that larger clients often seek to develop their own AI using Verisk’s data, while smaller clients prefer out-of-the-box AI solutions from Verisk.
- Manav Shiv Patnaik (Barclays) inquired about the proportion of Verisk’s software products bundled with data and how contract structures might evolve. Shavel noted that most software is a data delivery mechanism, emphasizing data connectivity as central to Verisk’s value.
- Faiza Alwy (Deutsche Bank) questioned if AI innovation would enable better pricing and margin improvements. Shavel responded that both incremental revenue and operating leverage are expected from AI, as it enhances productivity and funds further investment.
- Andrew Owen Nicholas (William Blair) asked about the recovery path for transactional revenues. CFO Elizabeth Mann indicated that while near-term headwinds remain, transactional revenue could return to growth as weather patterns normalize and conversion to subscription stabilizes.
- Gregory Peters (Raymond James) probed on client feedback to annual price increases. Shavel reported positive reception, citing added value from digitized datasets and enhanced contract features, while Mann suggested the pricing environment may moderate but remain strong.
Catalysts in Upcoming Quarters
Our analyst team will be monitoring (1) adoption rates and client value realization from new AI-powered claims products like ExactGen and Exact AI, (2) the pace of Coreline Reimagine module deployment and client training, and (3) recovery in transactional revenue as weather activity and government contract volumes normalize. Additionally, we will track the impact of portfolio simplification and continued investment in proprietary data infrastructure on Verisk’s competitive positioning.
Verisk currently trades at $191.20, up from $177.30 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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