Verisk's second quarter results met Wall Street’s revenue expectations, but the market responded negatively, with shares trading down sharply post-release. Management attributed operating momentum to broad-based subscription growth, disciplined cost management, and healthy margin expansion across its insurance analytics businesses. CEO Lee Shavel highlighted the company’s continued transformation into an integrated technology network, with new AI-powered solutions and expanded data offerings playing a central role. However, management acknowledged persistent headwinds in the auto and sustainability segments, as well as tougher year-over-year comparisons due to strong prior performance. CFO Elizabeth Mann noted that some competitive pressures and government contract reductions also impacted transactional revenue growth.
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Verisk (VRSK) Q2 CY2025 Highlights:
- Revenue: $772.6 million vs analyst estimates of $769.4 million (7.8% year-on-year growth, in line)
- Adjusted EPS: $1.88 vs analyst estimates of $1.77 (6.1% beat)
- Adjusted EBITDA: $444.8 million vs analyst estimates of $430.5 million (57.6% margin, 3.3% beat)
- The company lifted its revenue guidance for the full year to $3.11 billion at the midpoint from $3.06 billion, a 1.8% increase
- Management lowered its full-year Adjusted EPS guidance to $6.90 at the midpoint, a 0.7% decrease
- EBITDA guidance for the full year is $1.72 billion at the midpoint, in line with analyst expectations
- Operating Margin: 45.9%, up from 44.5% in the same quarter last year
- Constant Currency Revenue rose 7.9% year on year (6% in the same quarter last year)
- Market Capitalization: $37.36 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 Q2 Earnings Call
- Manav Shiv Patnaik (Barclays) asked about the strategic fit and synergy potential of AccuLynx, to which CEO Lee Shavel responded that high customer overlap and network effects offer immediate cross-sell opportunities, with further data and workflow integration benefits expected.
- Alexander Kramm (UBS) questioned the limited revenue guidance increase despite a strong first half. CFO Elizabeth Mann explained that tough comparisons, government contract reductions, and specific headwinds in the auto and sustainability businesses tempered the outlook for the rest of the year.
- Wenting Zhu (Autonomous Research) sought details on competitive pressures in the auto segment. Shavel acknowledged a large competitor poses challenges and that Verisk is focusing on enhancing value through data integration to offset market share risks.
- Faiza Alwy (Deutsche Bank) inquired about adoption and pricing for new AI tools. CTO Saurabh Khemka reported strong early adoption, especially for the Premium Audit Advisory Service AI and Mozart AI, which have driven measurable efficiency gains for clients.
- David Motemaden (Evercore) asked if AccuLynx’s growth could influence Verisk’s long-term organic growth target. Mann answered that AccuLynx is additive to growth, but its smaller size means the overall target will be reevaluated once fully integrated.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace and success of AccuLynx and SuranceBay integrations, (2) adoption rates and client feedback on new AI-driven product features, and (3) stabilization in transactional revenue streams—especially in the auto and sustainability segments. Execution on these fronts, as well as the ability to manage acquisition-related costs and leverage, will be key to assessing Verisk’s progress toward its strategic objectives.
Verisk currently trades at $267.42, down from $294.11 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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