Verisk Analytics, Inc.

Good day, everyone, and welcome to the Verisk first quarter 2025 earnings results conference call. This call is being recorded. Currently, our participants are in the listen only mode. After today's prepared remarks, we will conduct a question and answer session where we will limit participants to one question so that we can allow everyone to ask a question. We will have further instructions for you at that time. For opening remarks and instructions, I would like to turn the call over to Verisk's head of investors, Investor Relations, Ms. Stacey Broadbar. Ms. Broadbar, please go ahead.

Thank you, operator, and good day, everyone. We appreciate you joining us today for a discussion of our first quarter 2025 financial results. On the call today are Lee Shavel, VAERS President and Chief Executive Officer, and Elizabeth Mann, Chief Financial Officer. The earnings release referenced on this call, as well as our traditional quarterly earnings presentation and the associated 10Q, can be found in the investor section of our website, ferris.com. The earnings release has also been attached to an 8K that we have furnished to the SEC. A replay of this call will be available for 30 days on our website and by dial-in. As set forth in more detail in today's earnings release, I will remind everyone today's call may include forward-looking statements about their future performance, including those related to our financial guidance. Actual performance could differ materially from what is suggested by our comments today. Information about the factors that could affect future performance is contained in our recent SEC filing. A reconciliation of reported and historic non-GAAP financial measures discussed on this call is provided in our 8K and today's earnings presentation posted on the investor section of our website, thereisk.com. However, we are not able to provide a reconciliation of projected adjusted EBITDA and adjusted EBITDA margin to the most directly comparable expected GAAP results because of the unreasonable effort and high unpredictability of estimating certain items that are excluded from projected non-GAAP adjusted EBITDA and adjusted EBITDA margins, including, for example, tax consequences, acquisition-related costs, gains and losses from dispositions, and other non-recurring expenses, the effect of which may be significant. And now, I'd like to turn the call over to Lee Schabel.

Thanks, Stacey. Good morning, everyone, and let me welcome you to today's call. I'm very pleased to share that 2025 is off to a positive start at Verisk as we delivered solid first quarter results underscored by double digit subscription growth, strong overall top line growth, healthy margin expansion and profit growth. Organic constant currency revenue growth of 7.9% was driven by 10.6% subscription growth, which was broad based across most of our business units. Our focus on cost discipline delivered 130 basis points of margin expansion, resulting in OCC-adjusted EBITDA growth of 9.5%. Elizabeth will provide the details in her financial review, but these results are a demonstration of our emphasis on delivering consistent and predictable growth and our results-oriented culture. One of the hallmarks of Verisk's business model is that we have delivered consistent levels of growth across varying macroeconomic and insurance-specific operating environments. The current industry backdrop in which we are operating has strengthened as premium increases are better matched to levels of risk, thus driving improved trends. In fact, according to data collected by Verisk and the American Property Casualty Insurance Association, the insurance industry returned to profitability in 2024, recording an underwriting gain of 25 billion, marking the first gain recorded in four years. That said, the industry still faces an uncertain risk environment ahead, as challenges including inflation, regulatory changes, rising reconstruction costs, social inflation, and the potential impact of tariffs and severe weather events are making it more complex to operate. Speaking of severe weather, Last year marked the second worst year for catastrophic losses since 1950, with the vast majority of damages stemming from hurricane and severe convective storms, including the back-to-back hurricanes of Helene and Milton. And that trend has continued in 2025 as the year started with the devastating wildfires in Los Angeles, which have had a profound impact on individuals, businesses, communities, and our insurance industry clients, and which Verisk estimated would result in 28 to 35 billion in insurance losses for the industry. At Verisk, we are focused on supporting our clients with the most advanced data, analytics, and insights to help them better understand risk and navigate through these dynamic times. The changes to our go-to-market strategy that we implemented in 2024 have enabled us to get ever closer to our clients, delivering better service, improved customer satisfaction, and strong sales results for Verisk. We are now taking the learnings from 2024 and applying this improved sales model to a broader group of our business units in 2025, including our new growth vectors. Through our strategic and elevated dialogue with clients, we continue to hear three key resounding areas of need, specifically Our clients are asking for, one, greater and more timely insights, two, connection across our data sets and capabilities, and three, a more efficient and effective ecosystem. Let me spend a few minutes on each and detail how we are leaning in on investment toward invention to create new solutions on behalf of the industry. First is the demand for greater insights. Data and insights that help our clients understand risk across their portfolio is the foundation of the work we do. And through our Core Lines Reimagine project, we are converting data into insights with greater speed and frequency, helping our clients navigate these dynamic market pressures. In particular, the actuarial hub within our Core Lines platform provides insights into lost cost trends 12 months earlier than usual, to help clients address the evolving pricing needs of the market. Additionally, our executive insights reports leverage our statistical data across the six largest lines of insurance to help with benchmark analyses and to evaluate individual client performance measures. We are also delivering more granular insights throughout our underwriting data and analytic solutions as we are incorporating a broader range of data sources including aerial derived analytics, permit data, property records, real estate, and claims data to enhance our property databases and offer a more comprehensive risk profile of buildings and building condition. And finally, our reconstruction cost data is updated monthly to provide granular material and labor cost information and analysis to help our clients estimate costs and align insurance to value. Our comprehensive database includes over 23,000 line item activities assembled from over 14,000 material, equipment, and labor components. Our team of researchers and analysts survey and report pricing for these line items and components at market level for over 470 geographies in North America. In periods of rapid economic change, we often complete bi-monthly updates to our research to ensure we are providing the most up-to-date market information. In today's volatile economic environment, our clients depend on precision to maintain appropriate coverage levels and competitive pricing in the market, and they turn to Verisk as the trusted partner for our commitment to data accuracy and timeliness. We recently published our quarterly reconstruction cost analysis, which provides reconstruction cost trends at the national and state levels. The analysis is derived from building cost research using our property estimating solution. In an effort to support our clients with detailed data to navigate the changing operating environments, this quarter's report includes detailed coverage of cost changes inclusive of recent severe weather and macroeconomic events. The second area of need for our clients that I referenced is better connections across our data sets and capabilities. and we have many active projects here. One such example is our Enterprise Exposure Manager, a cloud native solution that combines the unique capabilities from our specialty business solutions and extreme events businesses. Enterprise Exposure Manager is a scalable solution that enables users to evaluate enterprise-wide risk across billions of locations with performance and stability, providing an improved understanding of global exposures and insights into portfolio-wide risk accumulations to enable better informed business decisions. This solution can utilize and analyze clients' data across insurance and reinsurance to create real-time insights, including identifying the risk of multiple claims from a single event, as well as trend and comparative analytics. This new solution is also creating opportunities for us to address the needs of chief risk officers across our clients, a newer constituent for our services. Another example of our work to connect our data and capabilities is in our extreme events business. We are reimagining the core catastrophe modeling software platform into a fully cloud native, scalable workflow solution we are calling Verisk Synergy Studio, launching in 2026. We recently engaged in more than 100 live one-on-one client demonstrations of Verisk Synergy Studio at our Verisk Insurance Conference last month, and client interest and reception was very strong. Upon release, Verisk Synergy Studio will provide a flexible, fast, and stable platform on which our full global suite of catastrophe models will be deployed at a lower cost of ownership, allowing for a better understanding of the near-present climate risk impacting the global insurance market. Importantly, Verisk Synergy Studio can also serve as a platform to connect the functionality of various products and data sets and serve as an ecosystem hub for all various clients. We are excited about this rollout and are in active dialogue with clients ahead of the launch. The third demand we are addressing is the need for an efficient and effective ecosystem that benefits all parties, namely insurers, reinsurers, brokers, regulators, and ultimately policyholders. The insurance industry is strengthened through the many ecosystem players being linked together and our ability to drive connectivity enables us to support many constituencies through data relationships and partners. Specifically, we are continuing to grow our ecosystem by continually adding new partners to our various platforms across underwriting and claims, including property estimating solutions and anti-fraud. This is driving increased revenues for Verisk, more choice for clients, and more connectivity and interoperability within the industry. We are also creating new platforms to connect different parts of the ecosystem, such as regulatory data exchange, launched in April to regulators. This platform streamlines data sharing between regulators and carriers across multiple jurisdictions. RDX enables regulators to review data elements that have been requested in prior data calls, both in their own and other jurisdictions, in order to make regulatory data calls more consistent, efficient, and less costly to insurers. And finally, just last month, we closed on the strategic acquisition of Simplitium from NASDAQ, a SAS platform that will be part of our extreme events business. Simplitium supports an open ecosystem where specialized model partners make models, hazard data, and analytics available to the industry to help assess the global insurance protection gap. This acquisition will provide our clients with access to over 300 third-party models, providing unique niche views of risk across the globe, supporting the entire risk transfer ecosystem. Now let me turn the call over to Elizabeth to review our detailed financial results for the first quarter.