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    VRSK
    Earnings call· Mar 2026(Q1 FY26)

    Verisk Analytics Q1 FY26 earnings call VRSK

    Apr 29, 2026 Source

    Executive summary

    Verisk Q1 FY26 — Solid Start with Strong Subscription Growth and AI Innovation

    Verisk delivered a solid Q1 FY26, marked by resilient subscription revenue growth and margin expansion, despite temporary headwinds from weather, prior-year comparisons, and a government contract issue. The company is actively leveraging its proprietary data and AI investments to drive innovation and client engagement, positioning for improved growth throughout the year and reaffirming its long-term targets. Management noted increased complexity in contracting for AI solutions, leading to extended sales cycles, but views this as part of a growing opportunity.

    Highlights

    5

    • Organic constant currency revenue grew 4.7% in Q1 FY26.

    • Subscription revenues grew 7% on an organic constant currency basis, comprising 84% of total revenues.

    • Organic constant currency adjusted EBITDA grew 5.9%, leading to 60 basis points of margin expansion.

    • Strong price realization on multi-year renewals, averaging 4-5 year contract terms.

    • Catastrophe and Risk Solutions delivered double-digit growth, driven by contract expansions and new client wins.

    Concerns

    4

    • Organic constant currency revenue growth of 4.7% was modestly below typical levels due to low weather activity, tough prior-year renewal comparisons, and a federal government contract work stoppage.

    • Transactional revenues declined 6.1% on an organic constant currency basis, primarily due to lower volumes in property and restoration solutions from low weather events.

    • Net cash from operating activities decreased 12% to $390 million, and free cash flow decreased 17% to $326 million, mainly due to a non-recurring prior-year tax refund and higher interest payments.

    • Extended sales cycles for some AI solutions due to increased complexity in contracting for AI governance and compliance.

    Guidance & targets

    9
    CategoryTargetConfidence
    Consolidated Revenue
    $3.19 billion to $3.24 billion
    high materiality
    High
    Adjusted EBITDA
    $1.79 billion and $1.83 billion
    high materiality
    High
    Adjusted EBITDA Margin
    56% to 56.5%
    high materiality
    High
    Net Interest Expense
    $190 million to $200 million
    medium materiality
    High
    Effective Tax Rate
    23% to 26%
    medium materiality
    High
    Adjusted Earnings Per Share
    $7.45 to $7.75
    high materiality
    High
    Organic Constant Currency Revenue Growth Rate
    gradual improvement
    high materiality
    High
    Q2 FY26 Organic Constant Currency Revenue Growth Rate
    falling below our long-term guidance range
    medium materiality
    Medium
    Q2 FY26 Reported Margins
    not expect to recur
    low materiality
    High

    Operational metrics

    24
    Organic constant currency revenue growth
    4.7%
    Q1 FY26

    Growth across both underwriting and claims.

    Subscription revenue growth
    7%
    Q1 FY26

    On an OCC basis, compounding on top of a 10.6% OCC increase from Q1 FY25.

    Transactional revenue decline
    6.1%
    Q1 FY26

    On an OCC basis, primarily driven by lower volumes in property and restoration solutions due to low weather activity.

    Organic constant currency adjusted EBITDA growth
    5.9%
    Q1 FY26

    Drove 60 basis points of margin expansion.

    Total Adjusted EBITDA margin
    55.9%up 60 bps from prior year
    Q1 FY26

    Reflects operational leverage and ongoing commitment to cost discipline, offset by increased investment in AI and technology.

    Cash dividend per share
    $0.5011% increase from prior year
    Q1 FY26

    Totaling $66 million paid in Q1 FY26.

    Shares repurchased
    7.6 million
    Q1 FY26

    Retired through accelerated share repurchase program and open market repurchases.

    Share repurchase authorization remaining
    $1 billion
    as of Q1 FY26 end

    Remaining under current authorization.

    Leverage ratio (debt to adjusted EBITDA)
    2.4x
    as of Q1 FY26 end

    Well within targeted range of 2 to 3x.

    Net interest expense
    $43 millioncompared to $36 million in prior year period
    Q1 FY26

    Due to higher debt balances and higher interest rates.

    Reported effective tax rate
    24.1%compared to 21.6% in prior year quarter
    Q1 FY26

    Increase driven by lower tax benefits from employee stock option exercise activity.

    Adjusted Net Income
    $246 millionincreased 0.6% YoY
    Q1 FY26

    Driven by solid revenue growth, strong margin expansion, and lower average share count, partially offset by higher interest expense and tax rate.

    Diluted Adjusted EPS
    $1.82increased 5.2% YoY
    Q1 FY26

    Driven by solid revenue growth, strong margin expansion, and lower average share count, partially offset by higher interest expense and tax rate.

    Underwriting OCC revenue growth
    5.3%
    Q1 FY26

    Part of consolidated OCC revenue growth.

    Claims OCC revenue growth
    3.4%
    Q1 FY26

    Part of consolidated OCC revenue growth.

    Catastrophe and Risk Solutions growth
    double-digit
    Q1 FY26

    Driven by expansion of contracts with existing clients, competitive wins, and new logos.

    Life business organic revenue growth
    double-digit
    Q1 FY26

    Driven by new client wins and expansion of relationships with existing clients.

    Aerial imagery offerings revenue growth
    30%
    last 2 years

    Client adoption has been strong with enhanced aerial imagery offerings.

    New client-facing modules released
    7
    Q1 FY26

    Released as part of the Core Lines Reimagine initiative.

    New client-facing modules anticipated
    25
    FY26

    Anticipated total releases for 2026.

    New data contributors (core lines)
    4
    Q1 FY26

    Continuing to onboard new data contributors.

    New data contributors (E&S lines)
    $15 billion
    Q1 FY26

    Contributions representing more than $15 billion in premium in the new excess and surplus lines contributory data program.

    Digital media forensics client adoption
    6th
    Q1 FY26

    On-boarded the sixth top 10 carrier to the digital media forensics platform this quarter.

    Verisk Marketing Solutions divestiture revenue impact
    $68 million
    FY25

    Contributed $68 million in revenue in 2025, representing an $0.11 headwind to earnings per share for 2026 guidance.

    Product announcements

    3
    ProductTypeDetails
    Digital Media Forensicsexpansion
    Wind and Hail Peril Scores and Remaining Life Analyticslaunch
    Updated U.S. Tropical Cyclone Model & Verisk Energy Studioupdate

    Deals & partnerships

    2
    Global insurance firmStrategic partnership to support the creation of a next-generation digitally native underwriting entity.

    Verisk will contribute its established data, actuarial, and analytics capabilities alongside a growing suite of AI-driven platforms and marketplace solutions to co-develop the operating model. This opportunity reflects continued momentum in commercializing Verisk's multiyear investments in agentic technologies.

    Major life and annuity carrierFirst combined Fast Insurance Bay deal.

    Recently closed the first combined Fast Insurance Bay deal with a major life and annuity carrier.

    Risks & headwinds

    7
    Lower weather activityQ1 FY26, carryover impact

    Impacted Q1 FY26 revenue growth, particularly transactional revenues in property and restoration solutions.

    Mitigation: Expect gradual improvement in revenue growth as short-term factors resolve.

    Tougher comparisons from strong renewals last yearQ1 FY26, carryover impact into H1 FY26

    Impacted Q1 FY26 revenue growth.

    Mitigation: Expect gradual improvement in revenue growth as short-term factors resolve.

    Work stoppage in a federal government contractQ1 FY26, carryover impact

    Impacted Q1 FY26 revenue growth.

    Mitigation: Expect gradual improvement in revenue growth as short-term factors resolve.

    Extended sales cycles for AI solutions

    Increased complexity in contracting for AI governance and compliance.

    Mitigation: Verisk's expertise in data governance, security, and privacy helps resolve these issues; growing pipeline of opportunities suggests long-term potential despite near-term delays.

    Higher interest expenseQ1 FY26 and ongoing

    Net interest expense was $43 million in Q1 FY26, compared to $36 million in Q1 FY25. Anticipate higher run rate quarterly interest expense.

    Mitigation: Leverage stands at 2.4x debt to adjusted EBITDA, well within the targeted range of 2 to 3x.

    Higher effective tax rateQ1 FY26

    Reported effective tax rate was 24.1% in Q1 FY26, compared to 21.6% in Q1 FY25.

    Mitigation: Company expects full-year tax rate to be in the 23% to 26% range.

    Divestiture of Verisk Marketing SolutionsFY26

    Contributed $68 million in revenue in 2025, representing an $0.11 headwind to earnings per share for 2026.

    Mitigation: Impact is already factored into 2026 guidance.

    What to watch in Q2 FY26

    5

    Organic Constant Currency Revenue Growth

    Q2 FY26
    Current4.7%
    TargetGradual improvement, potentially still below long-term range in Q2

    Why it matters

    Key indicator of core business health and recovery from temporary headwind📎s.

    we expect the first quarter of 2026 to be a trough, both in terms of organic constant currency revenue growth rate as absolute dollars, and forecast a gradual improvement as we move through the year.

    Q&A highlights

    6

    How are AWPs impacting pricing, and how is pricing achieved on non-indiscernible contracts?

    Management noted consistent stronger price increases on multi-year renewals, averaging 4-5 year terms, reflecting the criticality of their data. Annual increases also reflect greater value provided through the Core Lines Reimagine initiative.

    “both at our large client multiyear renewals, we have seen a consistent trend of our ability to achieve stronger price increases on an annualized basis for those multiyear contracts, as well as either similar terms or longer terms, reflecting the criticality of the data, the importance, particularly in this AI environment.”

    asked by Ashish Sabadra · answered by Lee Shavel

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 Performance & Outlook

    Verisk reported a solid start to 2026 with 4.7% organic constant currency (OCC) revenue growth and 5.9% OCC adjusted EBITDA growth, leading to 60 basis points of margin expansion. This performance was slightly ahead of expectations despite temporary headwind📎s from unusually low weather activity, tough comparisons from strong prior-year renewals, and a federal government contract work stoppage. Management expressed confidence that these short-term factors will resolve, leading to gradual improvement in revenue growth throughout the year and enabling the company to meet its long-term growth targets.

    02

    Strategic Initiatives & Investor Day

    The company reiterated its strategy to drive compounding growth through four key initiatives: strengthening client relationships, expanding proprietary data advantage, delivering continuous innovation, and expanding networks. These initiatives, along with 3-year growth targets and detailed divisional overviews, were presented at a recent Investor Day. Verisk's business model is characterized by consistent growth across varying macroeconomic and industry environments, supported by the mission-critical nature of its solutions and diversified offerings.

    03

    AI Innovation & Client Engagement

    Verisk is actively investing in new technologies, particularly AI, to support clients in understanding risk. Innovations include enhanced aerial imagery offerings (growing revenue >30% over two years) and digital media forensics, an AI-powered solution for fraud detection, which recently onboarded its sixth top 10 carrier. Client engagement is high, with record attendance at industry events (IFM, VIC) where AI-driven product innovation was a prominent topic. Verisk was selected as a strategic partner by a global insurance firm to co-develop a next-generation digitally native underwriting entity, leveraging its data, analytics, and AI platforms.

    04

    Subscription Revenue Strength

    Subscription revenues, which constitute 84% of total revenues, grew 7% on an OCC basis, building on a 10.6% increase in the prior year. This growth reflects strong price realization in renewals, enhanced value from the Core Lines Reimagine initiative, and the release of 7 new client-facing modules in Q1 (with 25 anticipated for 2026). The company also added 4 new carriers to its core lines contributory data program and now has contributions representing over $15 billion in premium for its new excess and surplus lines program.

    05

    Cash Flow & Capital Allocation

    Net cash from operating activities decreased 12% to $390 million, and free cash flow decreased 17% to $326 million, primarily due to a non-recurring📎 tax refund in the prior year and higher interest payments. Despite this, Verisk remains committed to returning capital to shareholders, paying a cash dividend of $0.50 per share (an 11% increase) and initiating a $1.5 billion accelerated share repurchase program. The company repurchased 7.6 million shares in Q1 FY26 and has approximately $1 billion remaining under its share repurchase authorization, maintaining a leverage ratio of 2.4x debt to adjusted EBITDA, within its target range.

    AI-generated summary of the company’s earnings call. Not investment advice.