Verisk (Nasdaq:VRSK), a leading data analytics provider, has announced results for the fourth quarter and fiscal year ended December 31, 2018.

Scott Stephenson, chairman, president, and CEO, said, “We are pleased to deliver another strong quarter of profitable growth at Verisk. Solid growth in our Insurance and Energy and Specialized Markets segments offset some headwinds in Financial Services, demonstrating the durability of our business model. Our engagement with clients and our pace of innovation remain exceptional, and we are well positioned to continue to execute on our strategies to drive profitable growth and create value for our shareholders over the long term. We are particularly pleased to deliver a new source of value to our shareholders with the dividend initiation.”

Lee Shavel, CFO and executive vice president, said, “Normalizing for exceptional storm revenue in the prior-year period, Verisk delivered organic constant currency revenue growth of 6.9% and organic constant currency adjusted EBITDA growth of 7.3%. The dividend underscores the stability of our business and our capital management discipline. We continue to have sufficient capital to support our growth objectives.”

  • Consolidated revenue grew 7.7% to $614 million; organic constant currency revenue growth, a non-GAAP measure, was 5.4%. Normalizing for the revenue associated with exceptional storm activity in the prior-year period, organic constant currency revenue would have grown 6.9%.
  • Net income was $146 million; adjusted EBITDA, a non-GAAP measure, was $289 million.
  • Net income declined 28.5%, reflecting an $89 million tax benefit in the fourth quarter of 2017 due to tax reform. Equalizing the fourth-quarter 2017 effective tax rate, adjusted net income would have increased 5.6%. Organic constant currency adjusted EBITDA growth was 4.2%. Normalizing for the revenue associated with exceptional storm activity, organic constant currency adjusted EBITDA would have grown 7.3%.
  • Diluted GAAP earnings per share (GAAP EPS) were $0.87; diluted adjusted earnings per share (adjusted EPS), a non-GAAP measure, were $1.04.
  • Net cash provided by operating activities was $934 million for 2018; free cash flow, a non-GAAP measure, was $703 million for 2018.
  • The Board of Directors declared a cash dividend of 25 cents per share, the first in the company’s history.
  • The company repurchased $156 million of its shares for the quarter ended December 31, 2018.

Revenue

Total revenue increased 7.7% in fourth-quarter 2018 compared with fourth-quarter 2017. Organic constant currency revenue growth was 5.4%. Excluding the impact of nonrecurring revenue benefit related to extreme weather in the fourth quarter of 2017 discussed below, revenue on an organic constant currency basis would have grown 6.9%.

Insurance segment revenue grew 7.6% in the fourth quarter of 2018 and 6.4% on an organic constant currency basis. Excluding the impact of approximately $8 million in storm-related revenue in the fourth quarter of 2017, Insurance revenue on an organic constant currency basis would have grown 8.5% in the quarter.

  • Underwriting & rating revenue increased 7.4% in the quarter and 7.0% on an organic constant currency basis, resulting primarily from increases within its underwriting and catastrophe modeling solutions revenue.
  • Claims revenue grew 8.0% in the quarter and 5.1% on an organic constant currency basis. Growth was driven by its claims analytics and repair cost estimating solutions revenue. Excluding the impact of approximately $8 million in storm-related revenue in the fourth quarter of 2017, claims revenue on an organic constant currency basis would have grown 11.7% in the quarter.

Energy and Specialized Markets segment revenue increased 11.7% in the quarter and 5.1% on an organic constant currency basis, as the energy business’s end markets have continued to improve. Our consulting and research businesses both experienced growth. The company also had positive contributions from its environmental health and safety services and weather and climate analytics businesses.

Financial Services segment revenue decreased 1.8% in the quarter and 2.2% on an organic constant currency basis. Solid growth in portfolio management solutions and spend informed analytics were offset by headwinds from tough comparisons with prior-year implementation revenues as well as some timing differences.

Consolidated Revenue for the full year of 2018 was US$ 2,391.5 million vs US$ 2,145.2 million up 11.6%

Source: Verisk Earnings Release