Crawford & Company

Good morning. My name is John, and I'll be your conference facilitator today. At this time, I would like to welcome everyone to the Crawford and Company First Quarter 2025 Earnings Release Conference Call. In conjunction with this call, a supplementary financial presentation is available on our website at www.proco.com under the Investor Relations section. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. Instructions will follow at that time. Should anyone need assistance at any time during this conference, please press star, then zero, and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today. Tuesday, May 6, 2025. Now, I would like to introduce Tammy Stevenson, Crawford & Company's General Counsel. Please go ahead.

Thank you, John. Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, our continued compliance with financial and other covenants contained in our financing agreements, our long-term capital resource and liquidity requirements, and our ability to pay dividends in the future. The company's actual results achieved in future quarters could differ materially from the results that may be implied by such forward-looking statements. The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the day of the call or to reflect the occurrence of unanticipated events. In addition, you are reminded that the operating results for any historical period are not necessarily indicative of the results to be expected for any future period. For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Form 10-Q for the quarter end of March 31, 2025, filed with the Securities and Exchange Commission, particularly the information under the headings Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as subsequent company filings with the SEC. This presentation also includes certain non-GAAP financial measures as defined under SEC rules. As required, a reconciliation is provided for those measures to the most directly comparable gap measures. I would like now to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit?

Thank you so much, Tammy. Good morning and welcome to our first quarter 2025 earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, and Tammy Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions. We've had a strong start to the year in the first quarter of 2025, continuing the growth and profitability and momentum we achieved in the fourth quarter of 2024. Our diversified business model and disciplined execution resulted in profitable revenue growth and meaningful margin expansion in the quarter, with expanded profit contributions from all four segments. We were especially encouraged by the performance of our non-weather dependent business, which continued to deliver steady growth, and reinforce our position as a market leader across a wide range of claim types. This morning, I'll review our segment operations for the first quarter before handing it over to Bruce for a deeper dive into our financial performance. On this slide, you will see a few of the leading global insurers and organizations that partner with Crawford. Managing over $20 billion in claims annually across 70 countries, Crawford is the largest publicly traded claims management provider in the world. Our reputation as a trusted partner is built on decades of experience, specialized expertise, and our ability to operate in some of the most complex and challenging environments. Backed by a global team of 10,000 professionals, we continue to differentiate ourselves through consistent execution, scale, and a unique ability to support clients wherever and whenever we're needed. Crawford brings a rare combination of global reach, technical capability, and specialized talent, positioning us to grow alongside the evolving needs of our industry. With people plus technology at the core of our identity, our strategy blends innovation and expertise to enhance claims management and deliver superior outcomes for clients across the globe. We see growing demand for expert-led, efficient claim solutions across property, casualty, and specialty lines of business, with their unique complexities and need for expertise. Additionally, we remain well-positioned to meet our clients' needs arising from the increasingly frequent and severe weather events globally. Crawford's deep client relationships across global reach and proven ability to rapidly deploy specialized talent and advanced technology enable us to support both weather and non-weather claims. This balanced capability reinforces our role as a trusted partner and positions as well for sustained growth across diverse risk environments. As the insurance industry faces increasing regulatory demands and cost pressures, More insurers are turning to claims outsourcing to enhance efficiency and scalability. Our comprehensive service offerings, industry expertise, and global reach make us the ideal partner for insurers seeking to streamline operations. Industry consolidation also creates more opportunities for specialized service providers, allowing us to expand our footprint and reinforce key partnerships in an increasingly dynamic and decentralized PNC market. Expanding our strategic partnerships is a top priority for us. Through our knowledge of our clients' operations, we deliver better service and drive stronger outcomes, which improves retention and positions Crawford as a long-term valued partner. Finally, our ability to attract and retain top-tier talent and our InsurTech capabilities are central to our growth strategy. The expertise and efficiency of our adjusters is a distinct competitive advantage and our innovative technology solutions backed by a highly skilled and agile team enable us to drive efficiencies and deliver superior claims outcomes. These components help position Crawford as the go-to partner for insurers navigating a rapidly evolving tech-driven market. And now, our first quarter highlights. In the first quarter, Crawford delivered 3.4% year-over-year growth in consolidated revenue. a 5% growth in constant currency driven by solid performances across North America loss adjusting, international operations, and broadspire. We achieved a $5.7 million increase in operating earnings year-over-year driven by improved profitability in North America loss adjusting, international operations, and platform solutions. Our consolidated operating margin improved by 170 basis points, reflecting our efforts to drive operational efficiencies. Gross profit increased across all segments driven by both high revenue and our focus on improving our operating leverage. Our commitment to returning value to shareholders is reflected in the quarterly dividend of $0.07 per share for CRDA and CRDB, which illustrates our solid financial foundation and our confidence in the future of Crawford. Our balance sheet shows continued strength and liquidity. with a low leverage ratio of 1.9 times EBITDA, providing us the flexibility to navigate market fluctuations and to make strategic investments to fuel our long-term growth. Our balanced revenue model is a core strength of the business. According to NOAA, severe storm reports increased 74% year over year in the first quarter, with March storm reports jumping 215% compared to the same period last year. This uptick in severe weather events provided a late quarter boost to our weather-related business lines, resulting in an almost 6% increase in the first quarter weather-related revenues year over year. Importantly, with our two-prong revenue model, we not only captured the benefits of this increased storm activity, but also maintained strong growth in our non-weather-related business lines. Our non-weather business revenue grew 2.5% or 4.6% in constant currency year-over-year in the first quarter of 2025 and continues to perform well. Our balanced model is a key differentiator for Crawford, allowing us to remain resilient and positioned for sustained growth, regardless of weather volatility. The solid performance from both our weather and non-weather business lines highlights the strength of our diversified portfolio, and the operational flexibility we've built over time. Our capital allocation strategy remains focused on maintaining financial flexibility while driving sustainable growth. We prioritize investments in long-term growth through capital expenditures and strategic acquisitions with a commitment to operational leverage and strengthening our balance sheet. During the first quarter, we maintained strong liquidity and our leverage ratio remains below industry averages. We have consistently returned value to shareholders as demonstrated by our quarterly dividend. The disciplined approach to capital allocation enables us to balance growth initiatives with shareholder return, positioning Crawford for long-term success. With that, let me turn the call over to Bruce for a deeper look at our segment operational and financial performance.