Verisk Analytics, Inc. (VRSK - Free Report) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share (excluding 29 cents from non-recurring items) of $1.53 beat the consensus mark by 7.8% and grew 30.8% on a year-over-year basis. The upside was backed by organic growth within the business, lower provision for income taxes, decreased interest expenses and a fall in average share count.
Revenues of $746.3 million beat the consensus estimate by 0.1% but decreased 0.2% year over year on a reported basis and 5.3% on an organic constant-currency (cc) basis. The decline in revenues was primarily due to the sale of environmental health and safety business (3E) and Verisk Financial Services.
Over the past year, shares of Verisk have improved 0.8% against the 15.1% decline of the industry it belongs to.
Segmental Performance
Insurance segment revenues totaled $610 million, up 10.9% year over year on a reported basis and 6.4% on an organic cc basis.
Within the segment, underwriting and rating revenues of $437.8 million rose 12.8% on a reported basis and 7.1% on an organic cc basis. The upside was primarily driven by an annual increase in prices derived from the continued enhancements of the content of solutions within our industry-standard insurance programs as well as the sale of expanded solutions to the existing customers in commercial and personal lines. In addition, extreme event and life solutions contributed to growth.
Claims revenues amounted to $172.2 million, improving 6.5% on a reported basis and 4.7% on an organic cc basis. The top line was primarily driven by claims analytics revenues and property estimating solutions.
The Energy and Specialized Markets segment’s revenues of $133.5 million decreased 17.7% year over year on a reported basis but increased 0.8% on an organic cc basis. The fall in revenues was primarily due to the sale of the 3E business that closed on Mar 11, 2022, and the suspension of commercial operations in Russia. However, organic cc growth was driven by modest growth in research revenues.
The Financial Services segment’s revenues of $2.8 million fell 92.1% year over year. Verisk had closed the sale of Verisk Financial Services on Apr 8, 2022.
Operating Results
Adjusted EBITDA of $380.8 million increased 2.7% on a reported basis and 4.4% on an organic cc basis. Adjusted EBITDA margin rose to 51% from 49.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Verisk exited second-quarter 2022 with cash and cash equivalents of $480.7 million compared with $397.9 million at the end of the prior-year quarter. Long-term debt was $2.34 billion, flat with the prior-year quarter’s level.
Verisk generated $130.2 million of cash from operating activities while capex was $69.2 million. Free cash flow was $61 million.
Share Repurchase & Dividend Payout
During the June quarter, Verisk paid out a total cash dividend of $49.2 million.
Currently, Verisk carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performances of Some Other Business Services Companies
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.
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Verisk Analytics, Inc. (VRSK - Free Report) reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share (excluding 29 cents from non-recurring items) of $1.53 beat the consensus mark by 7.8% and grew 30.8% on a year-over-year basis. The upside was backed by organic growth within the business, lower provision for income taxes, decreased interest expenses and a fall in average share count.
Revenues of $746.3 million beat the consensus estimate by 0.1% but decreased 0.2% year over year on a reported basis and 5.3% on an organic constant-currency (cc) basis. The decline in revenues was primarily due to the sale of environmental health and safety business (3E) and Verisk Financial Services.
Over the past year, shares of Verisk have improved 0.8% against the 15.1% decline of the industry it belongs to.
Segmental Performance
Insurance segment revenues totaled $610 million, up 10.9% year over year on a reported basis and 6.4% on an organic cc basis.
Within the segment, underwriting and rating revenues of $437.8 million rose 12.8% on a reported basis and 7.1% on an organic cc basis. The upside was primarily driven by an annual increase in prices derived from the continued enhancements of the content of solutions within our industry-standard insurance programs as well as the sale of expanded solutions to the existing customers in commercial and personal lines. In addition, extreme event and life solutions contributed to growth.
Claims revenues amounted to $172.2 million, improving 6.5% on a reported basis and 4.7% on an organic cc basis. The top line was primarily driven by claims analytics revenues and property estimating solutions.
The Energy and Specialized Markets segment’s revenues of $133.5 million decreased 17.7% year over year on a reported basis but increased 0.8% on an organic cc basis. The fall in revenues was primarily due to the sale of the 3E business that closed on Mar 11, 2022, and the suspension of commercial operations in Russia. However, organic cc growth was driven by modest growth in research revenues.
The Financial Services segment’s revenues of $2.8 million fell 92.1% year over year. Verisk had closed the sale of Verisk Financial Services on Apr 8, 2022.
Operating Results
Adjusted EBITDA of $380.8 million increased 2.7% on a reported basis and 4.4% on an organic cc basis. Adjusted EBITDA margin rose to 51% from 49.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Verisk exited second-quarter 2022 with cash and cash equivalents of $480.7 million compared with $397.9 million at the end of the prior-year quarter. Long-term debt was $2.34 billion, flat with the prior-year quarter’s level.
Verisk generated $130.2 million of cash from operating activities while capex was $69.2 million. Free cash flow was $61 million.
Share Repurchase & Dividend Payout
During the June quarter, Verisk paid out a total cash dividend of $49.2 million.
Currently, Verisk carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performances of Some Other Business Services Companies
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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