Verisk Analytics : First Quarter 2024 Earnings Presentation

1Q2024 Earnings Presentation

May 1, 2024

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1Q2024 Earnings Presentation

Forward-Looking Statements, Safe Harbor, and Non-GAAP Financial Measures

Forward-Looking Statements

This release contains forward-looking statements about Verisk's future performance, including those related to our financial guidance. These statements relate to

future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. This includes, but is not limited to, our expectation and ability to pay a cash dividend on our common stock in the future, subject to the determination by our Board of Directors and based on an evaluation of our earnings, financial condition and requirements, business conditions, capital allocation determinations, and other factors, risks, and uncertainties. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "target," "seek," "anticipate," "believe," "estimate," "predict," "potential," or "continue" or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements, because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements.

Other factors that could materially affect actual results, levels of activity, performance, or achievements can be found in our quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K filed with the Securities and Exchange Commission. If any of these risks or uncertainties materialize or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement in this release reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. We assume no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise except as required by applicable securities laws.

Notes Regarding the Use of Non-GAAP Financial Measures

We have provided certain non-GAAP financial information as supplemental information regarding our operating results. These measures are not in accordance with, or an alternative for, U.S. GAAP and may be different from non-GAAP measures reported by other companies. We believe that our presentation of non-GAAP measures provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. In addition, our management uses these measures for reviewing our financial results, for budgeting and planning purposes, and for evaluating the performance of senior management.

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1Q2024 Earnings Presentation

Business and Financial Highlights

• Organic constant currency (OCC) revenue grew 6.9%, with 7.8% growth in Underwriting and 4.7% growth in Claims.
• OCC subscription revenue grew 7.8%, with broad-based growth across most of our businesses including forms, rules and loss costs, anti-fraud, extreme event solutions, and property estimating solutions.
• OCC transactional revenue grew a modest 3.1%, driven by strength in underwriting data analytics solutions, life insurance, and securitizations. This growth was tempered by continued effect of the shift to subscriptions revenues in anti-fraud and softer weather-related transaction volume in property estimating solutions.
• OCC adjusted EBITDA growth of 10.6% was driven by leverage on the strong revenue growth and cost discipline, offset in part by continued investment in our technological transformation.
• Adjusted EBITDA margins expanded 180 basis points to 54.0% reflecting operational leverage and strong cost discipline.
• Paid $56 million in dividends and initiated a new $200 million ASR that settled in 2Q24.

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1Q2024 Earnings Presentation

Financial Summary

Three Months ended Mar 31,

	2024	20231	% change
Revenue	$704M	$652M	8.0%
Net income	219	194	12.9
Adjusted net income	234	196	19.1
Adjusted EBITDA	380	340	11.8
Adjusted EBITDA margin	54.0%	52.2%	180 bps
Diluted GAAP EPS	$1.52	$1.27	19.7
Diluted adjusted EPS	$1.63	$1.29	26.4
Wtd-Avg Diluted Shares Out	144	153	(5.7)
Free cash flow2	317	304	4.2

1. Continuing Ops view excludes results from disposition of Energy business
2. Cash flow measures follow GAAP view and includes results from discontinued operations in prior period

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Subscription/Long-Term Revenue

80% 80%

1Q20241Q2023

International Revenue

17%15%

1Q20241Q2023

4

1Q2024 Earnings Presentation

2023 Revenue Contribution

New Growth Vectors1 9%

Underwriting Data Analytics

Solutions

14%

Underwriting

71%

Forms, Rules, and Loss Costs

32%

Extreme Event Solutions

13%

Specialty Business Solutions

3%

Property Estimating Solutions

15%

$2.7B revenue

Anti-Fraud	Claims
9%
Casualty	29%
3%
Claims International
2%

1. x

1. New Growth Vectors includes Life, Marketing and Underwriting Solutions International

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Financial Results

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1Q2024 Earnings Presentation

Subscription vs. Transactional Growth - Insurance Only

Organic Constant Currency (OCC)

OCC Growth	Subscription	Transactional	Total
FY21	7.1%	6.0%	6.9%
FY22	6.9%	4.5%	6.5%
1Q23	8.7%	14.4%	9.8%
2Q23	9.1%	12.4%	9.8%
3Q23	9.3%	10.2%	9.4%
4Q23	7.3%	0.8%	6.0%

1Q24 Highlights

• Subscription revenue growth of 7.8% reflects strong contribution from:
• • forms, rules, and loss costs
  • anti-fraudanalytics
  • extreme event solutions
• Transactional revenue growth of 3.1% reflects strong performance in:
• • Underwriting data analytics solutions
  • Life insurance
  • Securitizations

Offset by:

FY23	8.6%	9.2%	8.7%
1Q24	7.8%	3.1%	6.9%

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• anti-frauddue to conversion to subscription revenue from our Claims Essentials bundle
• property estimating solutions due to tougher compare and lower weather-related transaction volume

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1Q2024 Earnings Presentation

Insurance Performance1 - Pro Forma

Revenue (Pro Forma)

9.8% 9.8% 9.4%

6.0% 6.9%

FY Revenue & Adjusted EBITDA (Pro Forma)

OCC Revenue growth	6.5%	OCC Revenue growth	8.7%
OCC Adj. EBITDA growth	8.0%	OCC Adj. EBITDA growth	11.5%
Adj. EBITDA Margin	52.0%	Adj. EBITDA Margin	53.5%

652

675 678 677

704

2,437		2,681
	1,266	1,434

1Q23	2Q23	3Q23	4Q23	1Q24
			Revenue		OCC Growth

Adjusted EBITDA (Pro Forma)

15.7%	12.6%
	11.8%		10.6%
			6.5%
340	365	366	362	380

1Q23	2Q23	3Q23	4Q23	1Q24
			Adj. EBITDA		OCC Growth

1. See the Appendix for reconciliation to all non-GAAP measures

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FY22		FY23
		Revenue		Adj. EBITDA

Total Adjusted EBITDA Margin (Pro Forma)

54.1%	54.0%	53.4%	54.0%
52.2%
		TTM Adj. EBITDA Margin: 53.9%

1Q23

2Q23

3Q23

4Q23

1Q24

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1Q2024 Earnings Presentation

Underwriting - Revenue

Industry-leading data analytics and insights

Underwriting Solutions

(incl. Forms, Rules, and Loss Costs

• Underwriting Data Analytics Solutions)
  Industry-standard insurance programs, property-specific underwriting & rating information, and underwriting data solutions.

Extreme Event Solutions

Catastrophe and extreme event models and data covering natural and man- made risks such as terrorism.

Life

Power for simplified automation, decisions, and processes across the life insurance value chain, driven by an unparalleled array of data sources.

Specialty Business Solutions

Integrated suite of software that provides full, end-to-end management of all insurance and reinsurance business.

Marketing

Identity resolution and consumer intelligence to humanize marketing interactions while upholding the highest data security and privacy standards.

International

A growing, global array of data and analytic solutions for risk assessment, underwriting, claims, and more.

Historical Performance

Reported growth	11.5%		9.1%
OCC growth	6.6%		8.5%
						1,893
				1,735
	1,555
	FY21		FY22	FY23
			Revenue

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Business Highlights

• Underwriting OCC revenue grew 7.8% driven by strong performance across most business units
• • Strong contribution from forms, rules, and loss costs, extreme event solutions, and underwriting data analytics solutions
  • Strong double-digit growth delivered by our International businesses
  • Marketing solutions experienced continued weakness

OCC Growth

9.1% 9.3%

8.3%

7.8%

7.3%

1Q23

2Q23

3Q23

4Q23

1Q24

9

1Q2024 Earnings Presentation

Claims - Revenue

Industry-leading data analytics and insights

Property Estimating Solutions

Loss quantification and repair cost estimating for professionals involved in all phases of building and repair.

Anti-Fraud Solutions

Unmatched industry data and leading analytics in a comprehensive suite of anti-fraud solutions.

Casualty Solutions

Broad claims compliance solutions and proven analytics to improve workers' comp and liability claims management.

International

A growing, global array of data and analytic solutions for risk assessment, underwriting, claims, and more.

Historical Performance

Business Highlights

OCC Growth

•	Claims OCC revenue grew 4.7%, primarily driven
	by:

11.4% 11.2%

12.2%

Reported growth

OCC growth

652

7.8%

6.1%

703

12.3%

9.3%

789

-	Strong growth in Anti-fraud solutions,
	supported by the ongoing shift from
	transactional customers to subscription
	models.
-	Growth in Property Estimating Solutions was
	negatively impacted by lower weather-related
	transactional volumes

4.7%

2.8%

FY21 FY22 FY23

Revenue

1Q23

2Q23

3Q23

4Q23

1Q24

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