Nasdaq:VRSK
Verisk Analytics, Inc.
A dominant player in the data analytics sector providing essential risk assessment and compliance solutions to insurers and utilities worldwide.
Key Metrics
Investment Thesis
Bull Case
The company is well-positioned to capitalize on increasing climate volatility, as insurers and utilities face higher premiums for catastrophe modeling and must upgrade compliance systems. Verisk's recurring revenue model from long-term contracts provides predictable cash flows supported by a low debt-to-equity structure relative to its cash reserves. Analysts view the expansion into new verticals like cybersecurity risk assessment as a promising avenue for sustained top-line growth beyond traditional insurance markets.
Bear Case
Valuation multiples may be stretched given the high revenue concentration in insurance and utilities, sectors currently facing margin pressure from inflation and regulatory headwinds. The company faces intense competition from large tech firms entering the data analytics space, which could threaten its long-term pricing power and market share. High accounts receivable levels relative to cash on hand suggest potential liquidity strains if major clients delay payments during economic downturns.
About Verisk Analytics, Inc.
Verisk Analytics is a leading provider of risk, compliance, and business solutions serving diverse industries including insurance, financial services, and public utilities. The company leverages proprietary data networks and advanced analytics to help clients manage exposure to natural disasters, cyber threats, and regulatory changes across its North American and global markets.
Analysis
Management Discussion
Revenue growth of 7% year-over-year to $3.07B demonstrates strong demand for risk intelligence, driven largely by climate change concerns and regulatory complexity. Operating profit margins remain robust despite increased general and administrative expenses, reflecting efficient scaling of data services. The significant capital expenditures of $244.1M suggest heavy investment in infrastructure and technology upgrades to maintain their data network leadership.
Industry Overview
The risk technology sector is experiencing rapid transformation as climate change accelerates disaster frequency and regulatory bodies demand more sophisticated compliance reporting. Traditional insurers are increasingly outsourcing data analytics to specialized providers to manage their exposure portfolios effectively. Consolidation is expected as smaller players struggle with the cost of acquiring comparable proprietary datasets and building advanced modeling capabilities.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $2.50B | $2.68B | $2.88B | $3.07B |
| Cost of Revenue | $824.6M | $876.5M | $901.1M | $925.5M |
| Gross Profit | $1.67B | $1.80B | $1.98B | $2.15B |
| Operating Expenses | $265.9M | $673.2M | $726.7M | $803.3M |
| Operating Income | $1.41B | $1.13B | $1.25B | $1.34B |
| R&D | $43.1M | $36.8M | $35.3M | $40.9M |
| G&A | $381.5M | $391.8M | $408.7M | $458.2M |
| Stock-Based Comp | $56.5M | $54.0M | $47.9M | $54.2M |
| D&A | $197.1M | $206.8M | $233.6M | $259.2M |
| Amortization | $74.4M | $74.6M | $72.3M | $67.5M |
| Other OpEx | $-158.7M | $244.6M | $282.7M | $304.2M |
| Non-Operating Income | $-144.1M | $-104.5M | $-25.3M | $-172.6M |
| Interest Expense | $138.8M | $115.5M | — | — |
| Pre-Tax Income | $1.26B | $1.03B | $1.23B | $1.17B |
| Income Tax | $220.3M | $258.8M | $277.9M | $263.0M |
| Continuing Ops | $1.04B | $768.4M | $950.7M | $908.3M |
| Discontinued Ops | $-87.8M | $-154.0M | $6.8M | $0 |
| Net Income | $954.3M | $614.4M | $957.5M | $908.3M |
| Minority Interest | $400.0K | $-200.0K | $-700.0K | $0 |
| Net to Common | $953.9M | $614.6M | $958.2M | $908.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $925.1M | $810.1M | $911.6M | $2.77B |
| Cash & Equivalents | $112.5M | $302.7M | $291.2M | $2.18B |
| Accounts Receivable | $290.1M | $334.2M | $434.4M | $422.2M |
| Other Current Assets | $522.5M | $173.2M | $186.0M | $165.0M |
| Long-Term Assets | $6.04B | $3.56B | $3.35B | $3.43B |
| PP&E (Net) | $541.5M | $604.9M | — | — |
| Intangibles | $504.8M | $471.7M | $392.4M | $346.6M |
| Goodwill | $1.68B | $1.76B | $1.73B | $1.88B |
| Operating Leases | $182.0M | $191.7M | $156.0M | $138.9M |
| Other LT Assets | $3.10B | $496.4M | $1.05B | $1.04B |
| Total Assets | $6.96B | $4.37B | $4.26B | $6.20B |
| Current Liabilities | $2.32B | $771.4M | $1.24B | $2.30B |
| Current Leases | $29.5M | $33.1M | $26.0M | $26.3M |
| Deferred Revenue | $321.7M | $375.1M | $447.2M | $444.2M |
| Other Current Liab | $1.97B | $363.2M | $765.7M | $1.83B |
| Long-Term Liabilities | $2.87B | $3.27B | $2.92B | $3.59B |
| LT Operating Leases | $189.9M | $195.6M | $158.7M | $136.9M |
| Other LT Liab | $2.61B | $3.00B | $2.68B | $3.37B |
| Total Liabilities | $5.19B | $4.04B | $4.16B | $5.89B |
| Shareholders' Equity | $1.77B | $322.2M | $105.0M | $309.8M |
| Retained Earnings | $6.00B | $6.42B | $7.15B | $7.81B |
| AOCI | $-731.2M | $58.2M | $15.0M | $107.0M |
| Treasury Stock | $6.24B | — | — | — |
| Total L&E | $6.96B | $4.37B | $4.26B | $6.20B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $954.3M | $614.4M | $957.5M | $908.3M |
| Non-Cash Adjustments | $-1.3M | $239.6M | $69.1M | $479.0M |
| Working Capital Changes | $106.0M | $206.7M | $117.4M | $48.7M |
| Cash from Operations | $1.06B | $1.06B | $1.14B | $1.44B |
| Capital Expenditures | $274.7M | $230.0M | $223.9M | $244.1M |
| Cash from Investing | $301.4M | $2.75B | $-124.8M | $-358.1M |
| Debt Issuances | $0 | $495.2M | $590.2M | $698.3M |
| Share Buybacks | $1.66B | $2.76B | $1.00B | $624.0M |
| Dividends Paid | $195.2M | $196.8M | $221.3M | $251.1M |
| Cash from Financing | $-1.33B | $-3.79B | $-1.03B | $795.2M |
| FX Effect | $-17.8M | $-10.7M | $-2.2M | $13.9M |
| Net Change in Cash | $12.4M | $10.0M | $-11.5M | $1.89B |
| Beginning Cash | $111.9M | $292.7M | $302.7M | $291.2M |
| Ending Cash | $112.5M | $302.7M | $291.2M | $2.18B |
Frequently Asked Questions
How does Verisk Analytics, Inc. make money?
The company generates revenue primarily through specialized data products and services for insurance carriers (property/casualty), financial institutions (credit risk modeling), and public utility companies (catastrophe exposure analysis). Additional streams include regulatory compliance tools for government bodies and proprietary datasets derived from its extensive private information network.
What are the main risks for VRSK?
Investors should consider the potential impact of rising natural disaster frequencies on demand for their core catastrophe modeling products, which could alter revenue recognition cycles. Cybersecurity breaches within the company's extensive data networks or at client sites could trigger significant liability and erode trust in their proprietary information. Regulatory changes regarding data privacy or industry-specific compliance standards could increase operating expenses and limit product offerings.
What is VRSK's competitive advantage?
Verisk possesses an entrenched moat built on a vast, decades-old database of loss history and property records that creates high switching costs for clients. Its deep penetration into North American utility infrastructure provides exclusive access to catastrophe modeling data that is difficult for competitors to replicate. The company benefits from strong pricing power due to the critical nature of its risk assessment tools during periods of climate volatility and regulatory scrutiny.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.