Verisk’s third quarter results fell short of Wall Street’s revenue expectations, prompting a significant negative market reaction. Management attributed the softer performance primarily to historically low levels of severe weather, which reduced demand for claims-related transactional services, and the impact of a reduced government contract. CEO Lee Shavel noted, “This and other factors drove transactional revenue declines,” emphasizing that the underlying subscription revenue growth remained strong. Despite these headwinds, Verisk expanded its operating margin and continued to invest in its data and AI capabilities, which management believes underpin the company’s long-term resilience.
Is now the time to buy VRSK? Find out in our full research report (it’s free for active Edge members).
Verisk (VRSK) Q3 CY2025 Highlights:
- Revenue: $768.3 million vs analyst estimates of $776.8 million (5.9% year-on-year growth, 1.1% miss)
- Adjusted EPS: $1.72 vs analyst estimates of $1.70 (1% beat)
- Adjusted EBITDA: $429.1 million vs analyst estimates of $431.3 million (55.9% margin, 0.5% miss)
- The company dropped its revenue guidance for the full year to $3.07 billion at the midpoint from $3.11 billion, a 1.4% decrease
- Management reiterated its full-year Adjusted EPS guidance of $6.90 at the midpoint
- EBITDA guidance for the full year is $1.71 billion at the midpoint, below analyst estimates of $1.74 billion
- Operating Margin: 45%, up from 42.9% in the same quarter last year
- Constant Currency Revenue rose 5.5% year on year (6.8% in the same quarter last year)
- Market Capitalization: $30.66 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 Q3 Earnings Call
- Manav Patnaik (Barclays) asked about the implications of the AccuLynx deal delay and the competitive landscape. CFO Elizabeth Mann clarified that the FTC review is ongoing and reiterated that no AccuLynx benefits are included in guidance.
- Toni Kaplan (Morgan Stanley) inquired about competition from AI startups. CEO Lee Shavel emphasized Verisk’s proprietary data and industry expertise as key differentiators, noting ongoing client interest in their AI solutions.
- Faiza Alwy (Deutsche Bank) questioned future pricing opportunities amid slow insurance premium growth. Shavel highlighted that AI product enhancements and integration capabilities are enabling Verisk to realize upsell revenue and maintain strong subscription growth.
- Ashish Sabadra (RBC Capital Markets) sought clarity on weather-related headwinds and whether strong sales momentum would translate into near-term revenue. Mann confirmed that weather impacts are expected to persist in Q4, with new sales more likely to benefit 2026 and beyond.
- Alex Kramm (UBS) asked about M&A strategy beyond AccuLynx. Shavel stated that the company’s primary focus remains on closing and integrating AccuLynx and SuranceBay, though Verisk continues to monitor the market for additive opportunities.
Catalysts in Upcoming Quarters
As we look ahead, the StockStory team will be watching (1) the pace of client adoption for new AI-powered analytics and subscription products, (2) the resolution and timing of the AccuLynx acquisition and any regulatory updates, and (3) signs of stabilization in the Personal Lines Auto segment amid ongoing competitive pressures. Execution on product launches and the ability to convert sales momentum into revenue will also be critical signposts for Verisk’s trajectory.
Verisk currently trades at $225.71, down from $232.21 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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