Verisk (VRSK) Q1 FY26 earnings call: guidance and Q&A

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

How will Verisk monetize clients using its data in their internal AI strategies, considering selling data versus software and potential cross-sell limitations?

Monetization will be rooted in providing structured, clean, industry-wide data for AI applications, encouraging broader data use. This will involve realizing more value through pricing arrangements and opening new specific data utilization for AI applications, adapting data for specific purposes.

“I think the monetization opportunity for us is going to be rooted in the fact that the application of AI [indiscernible] come from client developed solutions, frontier model companies, our integration of generative AI, or agentic AI, all driven off of that -- off of the data sets that we are providing on a structured, clean industry-wide basis.”

asked by Toni Kaplan · answered by Lee Shavel

Does the comment on extended sales cycles for AI solutions imply incremental caution for revenue development, or is it solely due to governance/compliance in a risk-focused industry?

Lee Shavel confirmed that AI opportunities add complexity to contract negotiation due to intellectual property, privacy, and governance issues, leading to longer sales cycles. He noted it signals 'a little bit of caution' but is tied to a 'growing opportunity' longer term, leveraging Verisk's expertise in data governance.

“what I am -- what we are signaling is this is an element that is taking a little longer to work through. It goes hand-in-hand with the new opportunity and with what we are seeing is a growing pipeline of opportunities, which is the case, it may take a little longer for us to work those through from a contractual standpoint as we feel this out.”

asked by Jeffrey Meueler · answered by Lee Shavel

Can management provide color on the cadence of gradual improvement in organic revenue growth, considering factors like weather, underwriting overages, and subscription renewal timing?

Elizabeth Mann reiterated that Q1 FY26 is expected to be the trough, with steady improvement in reported revenue throughout the year. She cautioned that Q2 OCC growth might still fall below the long-term guidance range due to tough year-over-year comparisons from H2 2025 headwinds.

“Look, we indicated that we expected 1Q to be the trough, and we continue to expect that with improvement from here. On a reported revenue standpoint, I think we can expect a steady build to the full year amount that we gave in our guidance range as the year progresses. Some of the headwinds that we talked about from a year-over-year perspective will persist into that second quarter. So you could still see from an OCC perspective, the second quarter falling below our long-term guidance range.”

asked by Keen Fai Tong · answered by Elizabeth Mann

Is there a difference in monetization potential or preference for AI product channels (AI native, co-development, frontier model partnerships) considering scalability or investment?

Lee Shavel stated the primary focus is responsiveness to diverse client preferences and needs. He noted that Verisk's data sets are adaptable to various AI applications due to prior investments in standardization, cloud migration, and API-driven access. He does not see significant differentiation in scalability or a clear preference for one channel at this stage.

“I would not say at this stage, that we see differentiation in the scalability of that opportunity. We do see a variety of applications that our clients, or channels that they're pursuing. And our data fortunately has the flexibility to be easily adapted and applied to a wide range. And I wouldn't say that we see a preference at this stage.”

asked by Andrew Nicholas · answered by Lee Shavel

Can management elaborate on the underwriting platform being developed with one client, its revenue model, and if it could become an industry utility or be replicated with other clients?

Lee Shavel explained it's a one-off project with a specific client to restructure their underwriting process by integrating Verisk data and agentic technologies. It reflects a stronger strategic dialogue and expertise, and while specific to this client's needs, it's indicative of broader industry objectives and could be replicated with other clients.

“So this is a -- it is a one-off specific to this customer. But I think it's indicative of our clients' broad objectives to think about how they can restructure their processes and integrate different data sets. And so specifically, as we discussed in the call, the project is to work with them on restructuring, reimagining their underwriting process. Integrating a range of our data sets as well as agentic technologies that we are providing on the underwriting side to be able to improve the efficiency and the effectiveness of that underwriting process.”

asked by Alex Kramm · answered by Lee Shavel