Verisk Analytics, Inc.VRSK shareholders experienced a downward trajectory in the trading patterns after the company unveiled its fourth-quarter FY23 earnings results.
The company’s revenues exhibited a 7.4% year-over-year (Y/Y) rise and a 6.0% Y/Y increase on an organic constant currency (OCC) basis, reaching $677.2 million, surpassing the consensus of $672.2 million.
The revenue was bolstered by robust growth in underwriting and more moderate growth in claims.
Notably, underwriting revenues surged by 7.8% Y/Y and 7.3% Y/Y on an OCC basis, totaling $479.0 million, high-flying on the back of substantial growth across forms, rules, and loss costs, underwriting data and analytic solutions, extreme event solutions, and life insurance solutions.
Besides, claims revenue expanded by 6.6% Y/Y and 2.8% Y/Y on an OCC basis, landing at $198.2 million, fortified by anti-fraud, casualty, and international growth.
The company witnessed a 9.0% Y/Y surge in adjusted EBITDA, reaching $362.0 million, complemented by robust revenue growth and cost discipline.
However, adjusted EPS experienced a dip of 2.1% Y/Y to $1.40, falling short of the consensus of $1.44.
The operating cash flow stood at $252.4 million, marking a modest 1.4% Y/Y increase, while free cash flow escalated by 15.8% Y/Y, reaching $196.1 million.
Repurchase: The company repurchased $250 million in shares during the quarter and still had $641.5 million remaining under its share repurchase authorization as of December 31, 2023.
On February 14, the Board of Directors sanctioned an additional share repurchase authorization of $1.0 billion.
Dividend: The company disbursed a cash dividend per share of $0.34 in the quarter. On February 14, 2024, the company’s Board of Directors approved a 15% cash dividend per share increase to $0.39, payable on March 29, 2024, to shareholders of record as of March 15, 2024.
FY24 Outlook: Verisk issued FY24 guidance, anticipating revenue of $2.840 billion-$2.900 billion. In contrast, the consensus hovers around $2.87 billion. Additionally, the adjusted EPS is projected to be $6.30-$6.60, slightly below the $6.61 estimate.
Price Action: As of the last check on Wednesday, VRSK shares saw a 4.99% decline, reaching $236.10.
