Verisk Analytics (VRSK) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 increased 6.2% year-over-year to $717 million, with organic constant currency growth of 6.0% and broad-based subscription growth, while transactional revenue declined due to conversions and lower storm activity.

• Net income rose 56.4% to $308 million, with net income margin expanding to 42.9%, driven by investment gains and a net gain on early debt extinguishment.

• Adjusted EBITDA increased 8.8% to $397 million, with margin expanding to 55.4%; EBITDA margin reached 69.7% due to one-time gains.

• Diluted GAAP EPS from continuing operations was $2.15, up 53%; diluted adjusted EPS was $1.74, up 15.2%.

• Returned $150 million via accelerated share repurchase and paid a 39-cent dividend; $1.3 billion remains under repurchase authorization.

Financial highlights

• Q2 revenue was $717 million, up 6.2% year-over-year; six-month revenue was $1.42 billion, up 7.1%.

• Adjusted net income grew 13% to $249 million; diluted adjusted EPS rose 15.2% to $1.74.

• Free cash flow for Q2 was $154 million, up 14.3%; net cash from operating activities was $212 million, up 10%.

• Subscription revenue comprised 81% of total, up from 79% a year ago; transactional revenue declined 3%.

• Adjusted EBITDA margin for Q2 was 55.4%, up from 54.1% a year ago.

Outlook and guidance

• 2024 guidance unchanged: revenue $2.84–$2.90 billion, adjusted EBITDA $1.54–$1.60 billion, margin 54–55%, and diluted adjusted EPS $6.30–$6.60.

• Effective tax rate expected at the low end of 23–25%; capex $240–$260 million.

• Management expects continued revenue growth from price increases, expanded solutions, and recent acquisitions, with a focus on cost control and margin expansion.