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    VRSK
    Earnings call· Jun 2026(Q2 FY26)

    Verisk Analytics Q2 FY26 earnings call VRSK

    Jul 29, 2026 Source

    Executive summary

    Verisk Analytics Q2 FY26 — Strong Subscription Growth and AI Innovation Drive Performance

    Verisk delivered solid Q2 FY26 results, marked by sequential revenue acceleration driven by robust subscription growth and strong adjusted EBITDA. The company is actively integrating AI into its offerings, with new product launches and client engagements demonstrating the value of its data and expertise. While transactional revenues faced headwinds, management reaffirmed its full-year guidance, confident in its ability to deliver on Investor Day targets.

    Highlights

    5

    • Organic constant currency revenue growth of 5.8%, demonstrating sequential acceleration.

    • Subscription revenues grew 8% on an OCC basis, comprising 83% of total revenue.

    • Organic constant currency adjusted EBITDA growth of 7.4%, delivering healthy margins.

    • Diluted adjusted EPS grew 5.3% to $1.98 per share, reflecting capital return activity.

    • Net cash from operating activities increased 50% to $366 million, and free cash flow rose 58% to $298 million.

    Concerns

    5

    • Transactional revenues declined 4.2% on an OCC basis, impacted by lower weather events and commercial property volumes.

    • Net income decreased 10% year-over-year due to divestiture, higher tax rate, increased interest expense, and legal fees.

    • Diluted GAAP EPS decreased 3% year-over-year to $1.75.

    • Tough comparisons from strong renewals in the prior year period.

    • Softening markets and price competition, particularly in commercial property, could persist in H2 FY26.

    Guidance & targets

    7
    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 Margins
    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 Growth Rate
    gradual recovery
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Underwriting
    Reported OCC growth of 5.6% in underwriting, showing sequential improvement from Q1.
    		—5.6%——
    Claims
    Reported OCC growth of 6.1% in claims, showing sequential improvement from Q1.
    		—6.1%——

    Operational metrics

    20
    Organic Constant Currency Revenue Growth
    5.8%
    Q2 FY26

    Demonstrating sequential acceleration as previously anticipated.

    Subscription Revenue Growth
    8%compounding 9.3% growth in prior year
    Q2 FY26

    Driven by strength across largest subscription-based businesses, strong price realization, expanded relationships, and new logos.

    Organic Constant Currency Adjusted EBITDA Growth
    7.4%compounding 9.7% growth in prior year
    Q2 FY26

    Driven by efficiency and cost discipline, delivering healthy margins.

    Adjusted EBITDA Margin
    57.5%down 10 bps from prior year
    Q2 FY26

    Prior year benefited from 120 bps foreign currency translation impact.

    Transactional Revenue Decline
    4.2%
    Q2 FY26

    Sequential improvement from the first quarter, offset by strong ILS issuance.

    Net Interest Expense
    $53 millionvs $36 million in prior year
    Q2 FY26

    Due to increased debt balance and higher interest rates.

    Effective Tax Rate
    24.6%vs 22.7% in prior year
    Q2 FY26

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

    Adjusted Net Income
    $259 milliondecreased 1.9%
    Q2 FY26

    Decline due to divestiture and higher below-the-line items (interest expense, tax rate).

    Diluted Adjusted EPS
    $1.98increased 5.3%
    Q2 FY26

    Reflecting capital return activity which reduced weighted average share count by 6.8%.

    Cash Dividend
    $0.5011% increase from prior year
    Q2 FY26

    Paid during the second quarter.

    Accelerated Share Repurchase Program
    $200 million
    Q2 FY26

    Initiated in Q2, in addition to a $1.5 billion program from Q1.

    Shares Retired
    8.5 million
    H1 FY26

    Total shares retired during the first half of 2026 from both ASR programs.

    Remaining Share Repurchase Authorization
    $800 million
    current

    Amount remaining under current share repurchase authorization after Q2 programs concluded.

    Leverage Level
    middle of targeted range
    Q2 FY26

    Current leverage level.

    New Core Lines Contributors
    8
    YTD FY26

    Onboarded so far this year.

    New Excess and Surplus Data Set Contributors
    10
    YTD FY26

    Onboarded so far this year, covering over $18 billion in historical and current premium.

    Global Catastrophe Losses
    below $100 billion markfirst time since 2020
    FY26

    Currently tracking for 2026.

    Verisk MCP Connectors for Claude
    2
    Q2 FY26

    Launched in partnership with Anthropic, with a top 10 carrier already using the MCP.

    Exact AI Users
    nearly 7,000increased nearly 10x since March
    Q2 FY26

    Adoption has accelerated significantly, with strong demand for additional functionality.

    Core Lines Reimagine Releases
    7 new client-facing modules
    Q2 FY26

    Delivering further platform functionality and value to clients.

    Product announcements

    5
    ProductTypeDetails
    Verisk MCP Connectors for Claudelaunch
    Verisk Synergy Studiolaunch
    Reengineered U.S. Tropical Cyclone Modellaunch
    Premium Audit AIupdate
    Exact AIupdate

    Deals & partnerships

    2
    McKenzie Intelligence Services (MIS)Geospatial intelligence and event response company specializing in global real-time catastrophe and conflict event analysis.

    MIS will become part of Verisk catastrophe and risk solutions. Strategic combination of MIS' real-time geospatial intelligence with Verisk's models, analytics, and claims solutions to provide a more complete view of unfolding events.

    AnthropicCollaboration to launch Verisk MCP connectors for Claude, integrating Verisk's data and analytics into conversational AI workflows.

    Launched two MCP connectors for underwriting and claims use cases. Verisk is the first insurance data provider with MCPs available with Claude. The architecture ensures data governance and security, with data not used for model training.

    Risks & headwinds

    6
    Lower weather activity impact on transactional revenueQ2 FY26, potentially H2 FY26

    Transactional revenues declined 4.2% on an OCC basis, partly due to carryover impact from lower weather events in property restoration solutions.

    Mitigation: Focus on subscription revenue stability and value of solutions in all market conditions.

    Tough comparisons from strong renewals in prior yearQ2 FY26

    Contributed to current quarter's performance being modestly ahead of expectations despite tough compares.

    Mitigation: Focus on core growth momentum and resolution of short-term factors.

    Softening markets and price competition in commercial propertyH2 FY26

    Transactional revenues impacted by lower volumes in commercial property, which could persist in H2 FY26.

    Mitigation: Verisk's data sets and analytic insights help clients with underwriting discipline and risk selection in dynamic markets.

    Lower volumes in international travelQ2 FY26

    Contributed to transactional revenue decline.

    Potential for lighter hurricane seasonH2 FY26

    Hurricane season is off to a slower start; if it plays out lighter, it would be a risk on the transactional side.

    Mitigation: Guidance range considers an average year of weather activity; strong subscription base provides stability.

    Elongated sales cycles due to AI discussionsOngoing

    The pattern of elongated sales cycles remains consistent.

    Mitigation: Strong governance on data usage rights, data protection, and IP. Long history of trust with the insurance industry and robust legal team provide a competitive differentiator.

    What to watch in Q3 FY26

    4

    Transactional Revenue Recovery

    Q3 FY26
    CurrentDeclined 4.2% OCC in Q2 FY26
    TargetSequential improvement or stabilization, especially outside of ILS seasonality

    Why it matters

    Transactional revenues are a key variable component of Verisk's revenue, and their recovery is important for overall growth acceleration.

    Second, the transactional revenues in the second quarter benefited from strong ILS activity that will not repeat in the third quarter as this is a seasonal market. Third, while it is still early, the hurricane season is off to a slower start as June and July have had limited storm activity. These factors could continue to exert pressure on transactional revenues in the second half of the year.

    Q&A highlights

    6

    How does Verisk's growth typically play out in soft markets, given decelerating pricing dynamics but potential for cross-sell and new product launches?

    Lee Shavel stated that in soft markets, Verisk's organic constant currency growth rate has historically been approximately 6.8%, well within their Investor Day targets. He emphasized that the value of Verisk's data and AI-driven solutions becomes even more critical for clients in such periods, supporting good pricing decisions and driving value through new offerings like Premium Audit AI and Exact AI.

    “our experience has been in soft markets that we've generally grown at approximately 6.8% organic constant currency growth rate. And again, hard markets 7.3%. So both of those are well within the range that we are -- that we talk about -- that we talked about at Investor Day.”

    asked by Toni Kaplan · answered by Lee Shavel

    2 min read5 chapters

    Detailed Narrative

    01

    AI Strategy and Innovation

    Verisk is actively partnering with the insurance industry to move AI from experimentation to production, focusing on accuracy, efficiency, and ROI. The company is investing in techniques like retrieval augmented generation (RAG) and context engineering to improve AI-driven outputs. Verisk's highly cleansed data sets and industry expertise are leveraged through a semantic layer to make large language models more effective. The goal is to combine advanced AI with proprietary data and established workflows to strengthen Verisk's role as a trusted strategic partner.

    02

    New AI Product Launches and Adoption

    In May, Verisk launched two MCP connectors for Claude in collaboration with Anthropic, bringing regulatory-grade data and analytics into conversational AI workflows for underwriting and claims. These connectors enable natural language interaction with Verisk's insights, with a top 10 carrier already using them. The company is also developing agentic capabilities, including a next-generation underwriting platform with a global insurer and autonomous features for its life solutions. Generative AI solutions like Premium Audit AI and Exact AI are seeing scaled engagement, with Exact AI users increasing nearly 10x to almost 7,000 licensees since March.

    03

    Catastrophe and Risk Solutions Advancements

    Verisk achieved a significant milestone with the on-time launch of its reengineered U.S. tropical cyclone model and Verisk Synergy Studio, a new cloud-native platform. The updated model integrates advances in climate science, hazard modeling, and vulnerability analytics, providing a more accurate view of risk. Synergy Studio offers advanced analytics, high-performance computing, and modern workflows, giving clients immediate access to Verisk's global model suite. Initial client feedback on performance and scalability has been positive, with a robust pipeline for migration.

    04

    Market Dynamics and Client Engagement

    The first half of 2026 continued trends from 2025, with improved combined ratios and robust industry profitability due to unusually low catastrophe losses. This has led to carriers focusing on driving growth, resulting in price competition and softening markets, particularly in commercial property. Verisk's data sets and analytic insights are crucial in this environment, helping clients with underwriting discipline and risk selection. Client engagement remains high, with numerous executive sessions and workshops focused on AI risks, regulations, and company-specific exposures.

    05

    Financial Performance and Capital Allocation

    Verisk delivered 5.8% OCC revenue growth and 7.4% OCC adjusted EBITDA growth in Q2 FY26. Subscription revenues, comprising 83% of total revenue, grew 8% OCC. Transactional revenues declined 4.2% OCC, impacted by lower weather events and commercial property volumes. The company returned capital to shareholders through a cash dividend of $0.50 per share (up 11%) and initiated a $200 million accelerated share repurchase program, in addition to a $1.5 billion program from Q1. In total, 8.5 million shares were retired in H1 FY26, with approximately $800 million remaining under authorization.

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