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Verisk Reports Third-Quarter 2021 Financial Results

  • Consolidated revenues were $759.0 million, up 8.0%, and up 5.1% on an organic constant currency (OCC) basis for the third quarter of 2021.
  • Net income attributable to Verisk was $201.7 million, up 8.6% for the third quarter of 2021. Adjusted EBITDA, a non-GAAP measure, was $378.8 million, up 3.5%, and up 2.1% on an OCC basis.
  • Diluted GAAP earnings per share (diluted EPS) attributable to Verisk were $1.24 for the third quarter of 2021, up 10.7%. Diluted adjusted earnings per share (diluted adjusted EPS), a non-GAAP measure, were $1.44, up 9.1%. 
  • Net cash provided by operating activities was $285.2 million, up 37.7% for the third quarter of 2021. Free cash flow, a non-GAAP measure, was $223.8 million, up 57.3%.
  • We paid a cash dividend of 29 cents per share on September 30, 2021. Our Board of Directors approved a cash dividend of 29 cents per share payable on December 31, 2021.
  • We repurchased $150.0 million of our shares during the third quarter of 2021.

JERSEY CITY, N.J., November 2, 2021 — Verisk (Nasdaq:VRSK), a leading global data analytics provider, today announced results for the third quarter ended September 30, 2021.

Scott Stephenson, chairman, president, and CEO, said, "Verisk's third quarter results reflect the continued strength of our subscription-based business model and the value we consistently deliver to customers. We remain intently focused on enhancing value for our shareholders and all Verisk stakeholders, and we are actively engaged in reviewing value creation strategies and optimization alternatives for certain businesses. As we've said previously, we believe that portfolio changes are probable within the next two to three quarters, subject to market conditions."

Lee Shavel, CFO and group president, said, "Verisk delivered OCC revenue growth of 5.1%, led by continued strength in our insurance business. Our capital allocation process directs investment to the highest growth and return on capital opportunities and returning excess capital to shareholders through dividends and share repurchases. This discipline also encompasses the active management of our business portfolio as we have demonstrated in previous actions."

Summary of Results (GAAP and Non-GAAP)

(in millions, except per share amounts)

Note: Adjusted EBITDA, diluted adjusted EPS, and free cash flow are non-GAAP measures.

 

 

Three Months Ended

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

Revenues

 

$

759.0

 

 

$

702.7

 

 

 

8.0%

 

 

$

2,232.6

 

 

$

2,071.2

 

 

 

7.8%

 

Net income attributable to Verisk

 

 

201.7

 

 

 

185.8

 

 

 

8.6

 

 

 

524.3

 

 

 

536.5

 

 

 

(2.3)

 

Adjusted EBITDA

 

 

378.8

 

 

 

366.2

 

 

 

3.5

 

 

 

1,095.1

 

 

 

1,032.5

 

 

 

6.1

 

Diluted EPS attributable to Verisk

 

 

1.24

 

 

 

1.12

 

 

 

10.7

 

 

 

3.21

 

 

 

3.24

 

 

 

(0.9)

 

Diluted adjusted EPS

 

 

1.44

 

 

 

1.32

 

 

 

9.1

 

 

 

3.85

 

 

 

3.78

 

 

 

1.9

 

Net cash provided by operating activities

 

 

285.2

 

 

 

207.1

 

 

 

37.7

 

 

 

967.1

 

 

 

819.2

 

 

 

18.1

 

Free cash flow

 

 

223.8

 

 

 

142.3

 

 

 

57.3

 

 

 

784.0

 

 

 

644.8

 

 

 

21.6

 

 

Revenues

Consolidated revenues increased 8.0%, and 5.1% on an OCC basis, for third-quarter 2021. In late March 2020, we analyzed our solutions and services to assess the impact of COVID-19 on our revenue streams. We did not identify any material impact stemming from COVID-19 on approximately 85% of our revenues as much of these revenues are subscription-based and subject to long-term contracts. These revenues increased 5.6% on an OCC basis in the third quarter of 2021. Of the remaining 15%, we have identified specific solutions and services, largely transactional in nature, that have been impacted by COVID-19. These revenues increased 1.6% on an OCC basis in third-quarter 2021 as compared to COVID-impacted declines in the prior-year period.

Revenues and Revenue Growth by Segment

(in millions)
 

 

 

 

 

 

 

 

 

 

 

Revenue Growth

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30,

 

 

September 30, 2021

 

 

 

2021

 

 

2020

 

 

Reported

 

 

OCC

 

Underwriting & rating

 

$

390.5

 

 

$

353.6

 

 

 

10.4%

 

 

 

7.0%

 

Claims

 

 

167.4

 

 

 

150.7

 

 

 

11.1

 

 

 

8.2

 

Insurance

 

 

557.9

 

 

 

504.3

 

 

 

10.6

 

 

 

7.4

 

Energy and Specialized Markets

 

 

165.9

 

 

 

158.1

 

 

 

5.0

 

 

 

2.5

 

Financial Services

 

 

35.2

 

 

 

40.3

 

 

 

(12.7)

 

 

 

(13.5)

 

Revenues

 

$

759.0

 

 

$

702.7

 

 

 

8.0

 

 

 

5.1

 

 

 

 

 

 

 

 

 

 

 

Revenue Growth

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30, 2021

 

 

 

2021

 

 

2020

 

 

Reported

 

 

OCC

 

Underwriting & rating

 

$

1,156.0

 

 

$

1,052.9

 

 

 

9.8%

 

 

 

6.6%

 

Claims

 

 

487.5

 

 

 

438.9

 

 

 

11.1

 

 

 

8.1

 

Insurance

 

 

1,643.5

 

 

 

1,491.8

 

 

 

10.2

 

 

 

7.1

 

Energy and Specialized Markets

 

 

484.4

 

 

 

460.8

 

 

 

5.1

 

 

 

2.3

 

Financial Services

 

 

104.7

 

 

 

118.6

 

 

 

(11.8)

 

 

 

(11.5)

 

Revenues

 

$

2,232.6

 

 

$

2,071.2

 

 

 

7.8

 

 

 

4.9

 

 

Insurance segment revenues grew 10.6% in the third quarter and 7.4% on an OCC basis. 

  • Underwriting and rating revenues increased 10.4% in the quarter and 7.0% on an OCC basis, resulting primarily from annual increases in price derived from continued enhancements to the content of the solutions within our industry-standard insurance programs, as well as selling expanded solutions to existing customers in commercial and personal lines. In addition, catastrophe modeling services and our international software solutions contributed to the growth.
  • Claims revenues grew 11.1% in the quarter and 8.2% on an OCC basis. Growth was primarily driven by our repair cost estimating solutions revenue and our claims analytics revenue. 

Energy and Specialized Markets segment revenue increased 5.0% in the quarter and 2.5% on an OCC basis. Growth was primarily driven by consulting and environmental health and safety service revenues.

Financial Services segment revenue decreased 12.7% in the quarter and 13.5% on an OCC basis, primarily due to certain contract transitions, projects that did not reoccur, and lower bankruptcy volumes. These declines more than offset solid growth in spend informed analytics revenues.

Net Income and Adjusted EBITDA

During third-quarter 2021, net income attributable to Verisk increased 8.6%. Adjusted EBITDA increased 3.5%, and 2.1% on an OCC basis. 

EBITDA and Adjusted EBITDA by Segment

(in millions)

Note: Adjusted EBITDA is a non-GAAP measure. Margin is calculated as a percentage of revenues. See "Non-GAAP Reconciliations" below for a reconciliation to the nearest GAAP measure. 

 

 

Three Months Ended September 30,

 

 

 

EBITDA

 

 

EBITDA Margin

 

 

Adjusted EBITDA

 

 

Adjusted EBITDA Growth

 

 

Adjusted EBITDA Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

Reported

 

 

OCC

 

 

2021

 

 

2020

 

Insurance

 

$

311.5

 

 

$

292.1

 

 

 

55.8%

 

 

 

57.9%

 

 

$

311.6

 

 

$

292.1

 

 

 

6.7%

 

 

 

4.8%

 

 

 

55.9%

 

 

 

57.9%

 

Energy and Specialized Markets

 

 

60.5

 

 

 

62.4

 

 

 

36.5

 

 

 

39.5

 

 

 

60.5

 

 

 

62.4

 

 

 

(3.0)

 

 

 

(2.6)

 

 

 

36.5

 

 

 

39.5

 

Financial Services

 

 

6.7

 

 

 

11.7

 

 

 

19.0

 

 

 

28.9

 

 

 

6.7

 

 

 

11.7

 

 

 

(42.5)

 

 

 

(41.9)

 

 

 

19.0

 

 

 

28.9

 

Consolidated

 

$

378.7

 

 

$

366.2

 

 

 

49.9

 

 

 

52.1

 

 

$

378.8

 

 

$

366.2

 

 

 

3.5

 

 

 

2.1

 

 

 

49.9

 

 

 

52.1

 

 

 

Nine Months Ended September 30,

 

 

 

EBITDA

 

 

EBITDA Margin

 

 

Adjusted EBITDA

 

 

Adjusted EBITDA Growth

 

 

Adjusted EBITDA Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

Reported

 

 

OCC

 

 

2021

 

 

2020

 

Insurance

 

$

911.2

 

 

$

848.3

 

 

 

55.4%

 

 

 

56.9%

 

 

$

911.3

 

 

$

835.0

 

 

 

9.1%

 

 

 

6.5%

 

 

 

55.4%

 

 

 

56.0%

 

Energy and Specialized Markets

 

 

171.8

 

 

 

163.4

 

 

 

35.5

 

 

 

35.5

 

 

 

171.8

 

 

 

163.4

 

 

 

5.2

 

 

 

3.7

 

 

 

35.5

 

 

 

35.5

 

Financial Services

 

 

12.0

 

 

 

37.6

 

 

 

11.4

 

 

 

31.7

 

 

 

12.0

 

 

 

34.1

 

 

 

(64.9)

 

 

 

(64.0)

 

 

 

11.4

 

 

 

28.7

 

Consolidated

 

$

1,095.0

 

 

$

1,049.3

 

 

 

49.0

 

 

 

50.7

 

 

$

1,095.1

 

 

$

1,032.5

 

 

 

6.1

 

 

 

3.8

 

 

 

49.1

 

 

 

49.8

 

 

Earnings Per Share and Diluted Adjusted Earnings Per Share

Diluted EPS attributable to Verisk increased 10.7% to $1.24 for the third quarter of 2021 primarily due to organic growth within the business, lower interest expense, and a lower average share count. 

Diluted adjusted EPS increased 9.1% to $1.44 for the third quarter of 2021 primarily due to organic growth within the business, lower interest expense, and a lower average share count. 

Cash Flow and Free Cash Flow

Net cash provided by operating activities was $285.2 million for the third quarter of 2021, up 37.7%. Capital expenditures were $61.4 million for the third quarter, down 5.2%. Free cash flow was $223.8 million, up 57.3% primarily due to the prior year deferral of federal income tax payments from the second quarter of 2020 to the third quarter of 2020 resulting from the CARES Act and an increase in operating profit and customer collections, partially offset by the prior year deferral of certain employer payroll taxes resulting from the CARES Act. Free cash flow is a non-GAAP measure. See "Non-GAAP reconciliations" below for a reconciliation to the nearest GAAP measure.

Dividend

On September 30, 2021, we paid a cash dividend of 29 cents per share of common stock issued and outstanding to the holders of record as of September 15, 2021. 

On October 27, 2021, our Board of Directors approved a cash dividend of 29 cents per share of common stock issued and outstanding, payable on December 31, 2021, to holders of record as of December 15, 2021.

Share Repurchases

Including the accelerated share repurchase (ASR) settled in the third quarter of 2021, we repurchased approximately 798 thousand shares at an average price of $187.91, for a total cost of $150.0 million for the third quarter of 2021. On August 17, 2021, our Board of Directors approved an additional authorization of $500.0 million. On September 30, 2021, we had $678.8 million remaining under our share repurchase authorization.

Conference Call

Our management team will host a live audio webcast to discuss the financial results and business highlights on Wednesday, November 3, 2021, at 8:30 a.m. EDT (5:30 a.m. PDT, 1:30 p.m. BST). All interested parties are invited to listen to the live event via webcast on our investor website at http://investor.verisk.com. The discussion will also be available through dial-in number 1-877-755-3792 for U.S./Canada participants or 512-961-6560 for international participants.

A replay of the webcast will be available for 30 days on our investor website and through the conference call number 1-855-859-2056 for U.S./Canada participants or 404-537-3406 for international participants using Conference ID #3794982.

About Verisk

We (Nasdaq:VRSK) provide predictive analytics and decision support solutions to customers in the insurance, energy and specialized markets, and financial services industries. More than 70 percent of the FORTUNE 100 uses our advanced technologies to manage risks, make better decisions and improve operating efficiency. Our analytic solutions address insurance underwriting and claims, fraud, regulatory compliance, natural resources, catastrophes, economic forecasting, geopolitical risks, as well as environmental, social, and governance (ESG) matters. Celebrating our 50th anniversary, we continue to make the world better, safer, and stronger, and foster an inclusive and diverse culture where all team members feel they belong. With more than 100 offices in nearly 35 countries, we consistently earn certification by Great Place to Work®. For more, please visit our website at www.verisk.com or follow our social media profiles on LinkedIn, Twitter, Facebook, and YouTube.

Contact:
Stacey Brodbar
201.469.4327
IR@verisk.com

Media:
Alberto Canal
201.469.2618
Alberto.Canal@verisk.com

This release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. This includes, but is not limited to, our expectation and ability to pay a cash dividend on our common stock in the future, subject to the determination by our Board of Directors and based on an evaluation of our earnings, financial condition and requirements, business conditions, capital allocation determinations, and other factors, risks, and uncertainties. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “target,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements, because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements.

Other factors that could materially affect actual results, levels of activity, performance, or achievements can be found in our quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K filed with the Securities and Exchange Commission. If any of these risks or uncertainties materialize or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement in this release reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.

View the full Verisk Q3 2021 Financial Results.