Verisk Analytics Inc

Previous wording

We earn revenues through agreements for hosted subscriptions, advisory/consulting services, and for transactional solutions, recurring and non-recurring. Subscriptions for our solutions are generally paid in advance of rendering services either quarterly or in full upon commencement of the subscription period, which is usually for one year and automatically renewed each year. As a result, the timing of our cash flows generally precedes our recognition of revenues and income and our cash flow from operations tends to be higher in the first quarter as we receive subscription payments. Examples of these arrangements include subscriptions that allow our customers to access our standardized coverage language, our claims fraud database, or our actuarial services throughout the subscription period. In general, we experience minimal revenue seasonality within the busi ness. For thenine months ended September 30, 2024 and 2023, approximately 81% and 80% of our insurance revenues were derived from hosted subscriptions through agreements (generally one to five years) for our solutions, respectively.

Current wording

We earn revenues through agreements for hosted subscriptions, advisory/consulting services, and for transactional solutions, recurring and non-recurring. Subscriptions for our solutions are generally paid in advance of rendering services either quarterly or in full upon commencement of the subscription period, which is usually for one year and automatically renewed each year. As a result, the timing of our cash flows generally precedes our recognition of revenues and income and our cash flow from operations tends to be higher in the first quarter as we receive subscription payments. Examples of these arrangements include subscriptions that allow our customers to access our standardized coverage language, our claims fraud database, or our actuarial services throughout the subscription period. In general, we experience minimal revenue seasonality within the busi ness. For thethree months ended March 31, 2025 and 2024, approximately 83% and 80% of our insurance revenues were derived from hosted subscriptions through agreements (generally one to five years) for our solutions, respectively.

Previous wording

We also provide advisory/consulting services, which help our customers get more value out of our analytics and their subscriptions. In addition, certain of our solutions are paid for by our customers on a transactional basis, recurring and non-recurring. For example, we have solutions that allow our customers to access property-specific rating and underwriting information to price a policy on a commercial building, or compare a P&C insurance or a workers' compensation claim with information in our databases, or use our repair cost estimation solutions on a case-by-case basis. For thenine months ended September 30, 2024 and 2023, approximately 19% and 20% of our insurance revenues were derived from providing transactional and advisory/consulting solutions, respectively.

Current wording

We also provide advisory/consulting services, which help our customers get more value out of our analytics and their subscriptions. In addition, certain of our solutions are paid for by our customers on a transactional basis, recurring and non-recurring. For example, we have solutions that allow our customers to access property-specific rating and underwriting information to price a policy on a commercial building, or compare a P&C insurance or a workers' compensation claim with information in our databases, or use our repair cost estimation solutions on a case-by-case basis. For thethree months ended March 31, 2025 and 2024, approximately 17% and 20% of our insurance revenues were derived from providing transactional and advisory/consulting solutions, respectively.

Previous wording

Personnel expenses are the major component of both our cost of revenues and selling, general and administrative expenses. Personnel expenses, which represented approximately 57% and 59% of our total operating expenses (excluding gains/losses related to dispositions) for thenine months ended September 30, 2024 and 2023, respectively, include salaries, benefits, incentive compensation, equity compensation costs, sales commissions, employment taxes, recruiting costs, and outsourced temporary agency costs.

Current wording

Personnel expenses are the major component of both our cost of revenues and selling, general and administrative expenses. Personnel expenses, which represented approximately 56% and 58% of our total operating expenses (excluding gains/losses related to dispositions) for thethree months ended March 31, 2025 and 2024, respectively, include salaries, benefits, incentive compensation, equity compensation costs, sales commissions, employment taxes, recruiting costs, and outsourced temporary agency costs.

Previous wording

Revenuesfor our Insurance segment were $725.3 million for the three months ended September 30, 2024, compared to $677.6 million for the three months ended September 30, 2023, a n** **increase o f $47.7 million or 7.0%. Our underwriting revenue increased $31.7 million or 6.7%. Our claims revenue increased $16.0 million or 7.9%.

Current wording

Revenues were $753.0 million for the three months ended March 31, 2025, compared to $704.0 million for the three months ended March 31, 2024, a n** **increase o f $49.0 million or 7.0% . Our underwriting revenue increased$33.6 million or 6.8% . Our claims revenue increased $15.4 million or 7.5% .

Previous wording

Our recent acquisition (Rocket within the claims category of the Insurance segment) contributed net revenues of $0.6 million, while the remaining Insurance revenues increased $47.1 million or 7.0%. Our underwriting revenue increased $31.8 million or 6.7%, primarily due to an annual increase in prices derived from continued enhancements to the models and content of the solutions within our forms, rules and loss cost services, as well as selling expanded solutions to new and existing customers within extreme event solutions. In addition, specialty business and life solutions contributed to the growth. Our claims revenue increased $15.3 million or 7.6%, primarily due to solid growth in anti-fraud solutions and property estimating solutions.

Current wording

Our recent acquisition (Rocket within the claims category of the Insurance segment) and dispositions (AER within the underwriting category of our Insurance segment) resulted in a net decrease in revenue of $4.6 million, while the remaining Insurance revenues increased $53.6 million or 7.7%. Our underwriting revenue increased $38.5 million or 7.8%, primarily due to an annual increase in prices derived from continued enhancements to the models and content of the solutions within our forms, rules and loss cost services, as well as selling expanded solutions to new and existing customers within extreme event solutions. In addition, specialty business and life solutions contributed to the growth. Our claims revenue increased $15.1 million or 7.4%, primarily due to solid growth in anti-fraud solutions and property estimating solutions.

Previous wording

Selling, general and administrative expenses were$114.0 million for thethree months ended September 30, 2024 compared to$111.6 million for thethree months ended September 30, 2023, an increaseof$2.4 million or 2.2%. Our recent acquisition accounted for an increase of $0.3 million in selling, general, and administrative expenses. The remaining increase of $2.1 million or 2.0% was primarily due toprofessional consulting fees of $8.1 million, a$6.9 million loss on the disposal of assets primarily due to a write-off of leasehold improvements related to our lease modification, salaries and employee benefits of $3.0 million, data costs of $1.5 million, travel expenses of $1.0 million, rent expense of $0.8 million, bad debt expense of $0.5 million, and other operating costs of $0.4 million, partially offset by a prior year litigation reserve expense of $19.2 million related to our former Financial Services segment, and a decrease in information technology expenses of $0.9 million.

Current wording

Selling, general and administrative expenses were$108.9 million for thethree months ended March 31, 2025 compared to$92.9 million for thethree months ended March 31, 2024, an increaseof$16.0 million or 17.2%. Our recent acquisition and disposition accounted for a decrease of $0.8 million in selling, general, and administrative expenses. The remaining increase of $16.8 million or 18.3% was primarily due toprofessional consulting fees of $9.2 million, salaries and employee benefits of $4.8 million, travel expenses of $0.8 million, rent expense of $0.8 million, information technology expense of $0.5 million, insurance expense of $0.4 million, and other operating costs of $0.3 million.

Previous wording

Depreciation and amortization of fixed assets were$58.1 million for thethree months ended September 30, 2024 compared to $48.1 millionfor thethree months ended September 30, 2023, anincrease of$10.0 million or 20.8%. The increase was primarily due to the timing of certain large internally developed software projects that were completed and placed into service in the prior year.

Current wording

Depreciation and amortization of fixed assets were$67.4 million for thethree months ended March 31, 2025 compared to $57.4 millionfor thethree months ended March 31, 2024, anincrease of$10.0 million or 17.4%. The increase was primarily due to the timing of certain large internally developed software projects that were placed into service during 2024 and the first quarter of 2025.

Previous wording

Amortization of intangible assets was$55.0 million for thenine months ended September 30, 2024 compared to$56.1 millionfor thenine months ended September 30, 2023, andecrease of$1.1 million or 2.0%. The decrease was primarily due to intangible assets that were fully amortized.

Current wording

Amortization of intangible assets was$15.8 million for thethree months ended March 31, 2025 compared to$18.5 millionfor thethree months ended March 31, 2024, adecrease of$2.7 million or 14.6%. The decrease was primarily due to intangible assets that were fully amortized.

Previous wording

Investment gain was$5.9 million for thethree months ended September 30, 2024 compared to a loss of$2.0 million for thethree months ended September 30, 2023, anincrease of $7.9 million. The increase was primarily driven by the impact of foreign currencies associated with transactions in the normal course of business.

Current wording

Investment gain was$2.6 million for thethree months ended March 31, 2025 compared to a loss of$3.3 million for thethree months ended March 31, 2024, anincrease of$5.9 million. The increase was primarily driven by the impact of foreign currencies associated with transactions in the normal course of business.

Previous wording

The provision for income taxes was$65.3 million for thethree months ended September 30, 2024, compared to$62.3 million for thethree months ended September 30, 2023, an increase of$3.0 million or 4.6%. The effective tax rate was 22.9% for thethree months ended September 30, 2024 compared to 25.0% for thethree months ended September 30, 2023. The effective tax rate for thethree months ended September 30, 2024 waslower than the effective tax rate for thethree months ended September 30, 2023 primarily due to nondeductible litigation accruals recorded in the prior period. The difference between statutory tax rates and our effective tax rate is primarily due to state and local taxes, partially offset by tax benefits attributable to equity compensation.

Current wording

The provision for income taxes was$64.1 million and the effective tax rate was 21.6% for thethree months ended March 31, 2025, compared to$55.8 million and 20.3% for thethree months ended March 31, 2024. The increase in the effective tax rate was primarily due to a nonrecurring tax benefit recognized in the prior period. The difference between statutory tax rates and our effective tax rate is primarily due to state and local taxes, partially offset by tax benefits attributable to equity compensation.

Previous wording

EBITDA was $393.8 million for thethree months ended September 30, 2024 compared to $346.8 million for thethree months ended September 30, 2023. The EBITDA margin for our consolidated results was 54.3% for thethree months ended September 30, 2024 compared to 51.2% for thethree months ended September 30, 2023. The increase in EBITDA margin was primarily driven by revenue growth, cost discipline, a decrease in our effective tax rate, discussed above, anda litigation reserve expense of $19.2 million recognized in the prior year.

Current wording

EBITDA was $415.9 million for thethree months ended March 31, 2025 compared to $380.0 million for thethree months ended March 31, 2024. The EBITDA margin for our consolidated results was 55.2% for thethree months ended March 31, 2025 compared to 54.0% for thethree months ended March 31, 2024. The increase in EBITDA margin was primarily driven by revenue growth and cost discipline.

Previous wording

As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents and available-for-sale securities totaling $459.2 million and $303.9 million, respectively. We maintain our cash and cash equivalents in higher credit quality financial institutions in order to limit the amount of credit exposure. As of September 30, 2024 and December 31, 2023, a vast majority of our domestic cash and cash equivalents is with TD Bank, N.A., and JPMorgan Chase N.A. Subscriptions for our solutions are billed and generally paid in advance of rendering services either quarterly or in full upon commencement of the subscription period, which is usually for one year. Subscriptions are automatically renewed at the beginning of each calendar year. We have historically generated significant cash flows from operations. As a result of this factor, as well as the availability of funds under our Credit Facility, we expect that we will have sufficient cash to meet our working capital and capital expenditure needs and to fuel our future growth plans.

Current wording

As of March 31, 2025 and December 31, 2024, we had cash and cash equivalents and available-for-sale securities totaling $1,113.2 million and $292.5 million, respectively. We maintain our cash and cash equivalents in higher credit quality financial institutions in order to limit the amount of credit exposure. As of March 31, 2025 and December 31, 2024, a vast majority of our domestic cash and cash equivalents is with TD Bank, N.A., and JPMorgan Chase N.A. Subscriptions for our solutions are billed and generally paid in advance of rendering services either quarterly or in full upon commencement of the subscription period, which is usually for one year. Subscriptions are automatically renewed at the beginning of each calendar year. We have historically generated significant cash flows from operations. As a result of this factor, as well as the availability of funds under our Credit Facility, we expect that we will have sufficient cash to meet our working capital and capital expenditure needs and to fuel our future growth plans.

Previous wording

We have also historically used a portion of our cash for repurchases of our common stock from our stockholders. During thenine months ended September 30, 2024 and 2023, we repurchased$750.0 million (inclusive of$60.0 million in treasury stock not yet settled) and$2,549.8 million (inclusive of$500.0 million in treasury stock then not yet settled), respectively, of our common stock. The repurchase of our common stock in the third quarter of 2024 was funded using cash from operations. For thenine months ended September 30, 2024 and 2023, we also paid dividends of$166.6 million and$147.9 million, respectively.

Current wording

We have also historically used a portion of our cash for repurchases of our common stock from our stockholders. During thethree months ended March 31, 2025 and 2024, we repurchased $200.1 million (inclusive of $30.0 million in treasury stock not yet settled) and $200.0 million (inclusive of $30.0 million in treasury stock then not yet settled), respectively, of our common stock. The repurchase of our common stock in the first quarter of 2025 was funded using cash from operations. For thethree months ended March 31, 2025 and 2024, we also paid dividends of $63.0 million and $55.8 million, respectively.

Previous wording

We had total debt, excluding finance lease liabilities, unamortized discounts and premium, and debt issuance costs of $3,050.0 million and $2,850.0 million at September 30, 2024 and December 31, 2023, respectively, and we were in compliance with our financial and other covenants. The debt at September 30, 2024, primarily consists of senior notes issued in 2024, 2023, 2020, 2019, and 2015. Interest on the senior notes is payable semi-annually each year. The unamortized discount and debt issuance costs were recorded as "Long-term debt" in the accompanying consolidated balance sheets, and will be amortized to "Interest expense" in the accompanying consolidated statements of operations within this Form 10-Q over the life of the respective senior note. The indenture governing the senior notes restricts our ability to, among other things, create certain liens, enter into sale/leaseback transactions, and consolidate with, sell, lease, convey, or otherwise transfer all or substantially all of our assets, or merge with or into, any other person or entity. We have made, and may from time to time in the future make, optional repayments on our debt obligations, which may include repurchases or exchanges of our outstanding notes, depending on various factors, such as market conditions. Any such repurchases may be effected through privately negotiated transactions, market transactions, tender offers, redemptions or otherwise. See Note 10. for additional information on our financing activities.

Current wording

We had total debt, excluding finance lease liabilities, unamortized discounts and premium, and debt issuance costs of $3,750.0 million and $3,050.0 million at March 31, 2025 and December 31, 2024, respectively, and we were in compliance with our financial and other covenants. The debt at March 31, 2025, primarily consists of senior notes issued in 2025, 2024, 2023, 2020, 2019, and 2015. Interest on the senior notes is payable semi-annually each year. The unamortized discount and debt issuance costs were recorded as "Long-term debt" in the accompanying consolidated balance sheets, and will be amortized to "Interest expense" in the accompanying consolidated statements of operations within this Form 10-Q over the life of the respective senior note. The indenture governing the senior notes restricts our ability to, among other things, create certain liens, enter into sale/leaseback transactions, and consolidate with, sell, lease, convey, or otherwise transfer all or substantially all of our assets, or merge with or into, any other person or entity. We have made, and may from time to time in the future make, optional repayments on our debt obligations, which may include repurchases or exchanges of our outstanding notes, depending on various factors, such as market conditions. Any such repurchases may be effected through privately negotiated transactions, market transactions, tender offers, redemptions or otherwise. See Note 9. for additional information on our financing activities.

Previous wording

We have a $1,000.0 million Syndicated Revolving Credit Facility with Bank of America N.A., HSBC Bank USA, N.A., JP Morgan Chase Bank, N.A., Wells Fargo Bank, N.A., Citibank, N.A., Morgan Stanley Bank, N.A., TD Bank, N.A., Goldman Sachs Bank USA, and the Northern Trust Company with a maturity date of April 5, 2028. Borrowing under the facility is payable at an interest rate of SOFR plus 100.0 to 162.5 basis points, depending on the public debt rating. The financial covenants require that, at the end of any fiscal quarter, we have a consolidated funded debt leverage ratio of less than 3.75 to 1.0*.* At our election, the maximum consolidated funded debt leverage ratio could be permitted to increase to 4.50 to 1.0 (no more than once) and to 4.25 to 1.0 (no more than once) in connection with the closing of a permitted acquisition. The Syndicated Credit Facility may be used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividend payments, and the Repurchase Program. As of September 30, 2024, we were in compliance with all financial and other debt covenants under the Syndicated Credit Facility. As of September 30, 2024 and December 31, 2023, the available capacity under the Syndicated Revolving Credit Facility was $995.5 million and $995.4 million, which takes into account outstanding letters of credit of $4.5 million and $4.6 million, respectively.

Current wording

We have a $1,000 million Syndicated Revolving Credit Facility with Bank of America N.A., HSBC Bank USA, N.A., JP Morgan Chase Bank, N.A., Wells Fargo Bank, N.A., Citibank, N.A., Morgan Stanley Bank, N.A., TD Bank, N.A., Goldman Sachs Bank USA, and the Northern Trust Company with a maturity date of April 5, 2028. Borrowing under the facility is payable at an interest rate of SOFR plus 100.0 to 162.5 basis points, depending on the public debt rating. The financial covenants require that, at the end of any fiscal quarter, we have a consolidated funded debt leverage ratio of less than 3.75 to 1.0*.* At our election, the maximum consolidated funded debt leverage ratio could be permitted to increase to 4.50 to 1.0 (no more than once) and to 4.25 to 1.0 (no more than once) in connection with the closing of a permitted acquisition. The Syndicated Credit Facility may be used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividend payments, and the Repurchase Program. As of March 31, 2025, we were in compliance with all financial and other debt covenants under the Syndicated Credit Facility. As of March 31, 2025 and December 31, 2024, the available capacity under the Syndicated Revolving Credit Facility was $995.4 million, which takes into account outstanding letters of credit of $4.6 million.

Previous wording

Net cash provided by operating activities was$296.2 million for thethree months ended September 30, 2024, compared to$250.1 million for thethree months ended September 30, 2023, an increase of$46.1 million or 18.4%. The increase in operating cash flow was due to an increase in operating profit.

Current wording

Net cash provided by operating activities was$444.7 million for thethree months ended March 31, 2025, compared to$372.2 million for thethree months ended March 31, 2024, an increase of$72.5 million or 19.5%. The increase in operating cash flow was due to an increase in operating profit and a federal tax refund received in the quarter, partially offset by the timing of certain cash payments throughout the quarter.

Previous wording

Net cash used in investing activities of$52.6 million for thethree months ended September 30, 2024 wasprimarily related to capital expenditures of$55.5 million, and investments in non-public companies of $0.9 million, partially offset by an escrow release associated with acquisitions of $3.8 million. Net cash used in investing activities of$55.3 million for thethree months ended September 30, 2023 wasprimarily related to capital expenditures of $54.3 million as well as investments in nonpublic companies of $0.9 million.

Current wording

Net cash used in investing activities of$57.8 million for thethree months ended March 31, 2025 wasprimarily related to capital expenditures of$53.7 million, and a purchase of an additional controlling interest of $4.1 million. Net cash used in investing activities of$79.9 million for thethree months ended March 31, 2024 wasprimarily related to capital expenditures of $55.2 million, acquisitions and a purchase of an additional controlling interest of $25.9 million, and investments in nonpublic companies of $1.3 million.

Previous wording

Net cash used in financing activities of$421.3 million for thethree months ended September 30, 2024 was primarily driven by the funding of a $400.0 million accelerated share repurchase program and dividends paid of $55.3 million, partially offset byproceeds from stock options exercised of $47.4 million. Net cash used in financing activities of$89.6 million for thethree months ended September 30, 2023 was primarily driven by the repurchase of common stock of $49.8 million and dividends paid of $49.2 million, partially offset by proceeds from stock options exercised of $19.4 million.

Current wording

Net cash provided by financing activities of$433.3 million for thethree months ended March 31, 2025 was primarily driven by the net proceeds received from the issuance of long-term debt of $698.3 million and proceeds from stock options exercised of $24.7 million, partially offset by the funding of a $200.0 million accelerated share repurchase program, dividends paid of $63.0 million, the net share settlement of taxes from restricted stock and performance share awards of $17.9 million, and debt issuance costs of $6.2 million. Net cash used in financing activities of $242.5 million for thethree months ended March 31, 2024 was primarily driven by the funding of a $200.0 million accelerated share repurchase program, and dividends paid of $55.8 million, partially offset by proceeds from stock options exercised of $28.2 million.