01—Abstract
Summary
Summary of the 10-Q filed July 31, 2024. Cited figures are marked; the original filing is the authoritative source.
Verisk Analytics, Inc. reported second-quarter 2024 revenues of $716.8 milliona, up from $675.0 million a year earlier, with operating income of $318.7 million versus $306.0 million.
Net income attributable to Verisk was $308.1 millionb, or $2.15 per diluted share, compared with $196.9 million, or $1.35 per diluted share, in the prior-year quarter. Results were boosted by a $99.8 million investment gain, mainly from settlement of retained interests tied to previously sold businesses, and a $3.6 million gain on early debt extinguishment. For the six months, revenues were $1,420.8 million and net income attributable to Verisk was $527.7 million, compared with $253.2 million a year earlier, which included a $145.5 million loss from discontinued operations related to the Energy business sale.
Cash generation remained solid, with net cash provided by operating activities of $592.4 millionc for the six months. The company issued $600.0 million of 5.25% senior notes due 2034 and used $400.0 million of proceeds to tender for 4.00% senior notes due 2025, reducing that series to $500.0 million. Total debt was $3,069.2 million at June 30, 2024, and cash and cash equivalents rose to $632.1 million.
Share repurchases totaled $350.0 milliond across three accelerated share repurchase agreements in the six months, and dividends paid were $111.3 million. The filing also discloses several pending lawsuits, including telematics-related class actions involving General Motors, Hyundai, LexisNexis and Verisk, and a Daniel's Law suit. For each, the company states it is not possible to reasonably estimate the potential liability because the cases are at early stages.
02—Key points
Key Highlights
- Q2 2024 revenues rose to $716.8 million from $675.0 million, with underwriting up $29.4 million and claims up $12.4 million.
- Q2 2024 net income attributable to Verisk was $308.1 million ($2.15 diluted EPS), versus $196.9 million ($1.35 diluted EPS) in Q2 2023, helped by a $99.8 million investment gain.
- Six-month net cash provided by operating activities was $592.4 million, compared with $558.2 million a year earlier, including a $37.0 million payment to settle a Department of Justice inquiry.
- Issued $600.0 million of 5.25% senior notes due 2034 and tendered $400.0 million of 4.00% senior notes due 2025, reducing that series to $500.0 million; a $3.6 million net gain on extinguishment was recognized.
- Repurchased $350.0 million of common stock in the first half of 2024 through accelerated share repurchase agreements, with $1,291.5 million still available under the repurchase program at June 30, 2024.
- Total debt stood at $3,069.2 million at June 30, 2024, against $2,866.7 million at December 31, 2023, and the $1,000.0 million revolving credit facility had $995.5 million of available capacity.
- Multiple pending lawsuits, including telematics class actions involving General Motors, Hyundai, LexisNexis and Verisk, are at early stages, and the company states it cannot reasonably estimate potential liability.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Verisk Analytics kept $0.43.
- Revenue$716.8M100.0%
- Cost of revenue−$219.4M30.6%
- Gross profit$497.4M69.4%
- Operating costs−$178.7M24.9%
- Operating income$318.7M44.5%
- Interest, other & tax−$10.6M1.5%
- Net income$308.1M43.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 31, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $716.80M$675.00M | +6.2% |
| Cost of Revenue | $219.40M$216.90M | +1.2% |
| Gross Profit | $497.40M$458.10M | +8.6% |
| SG&A Expenses | $101.50M$86.80M | +16.9% |
| Operating Expenses | $398.10M$369.00M | +7.9% |
| Operating Income | $318.70M$306.00M | +4.2% |
| Interest Expense | $29.10M$31.60M | −7.9% |
| Net Income | $308.10M$196.90M | +56.5% |
| EPS (Basic) | $2.16$1.36 | +58.8% |
| EPS (Diluted) | $2.15$1.35 | +59.3% |
| Shares Outstanding (Basic) | 142.71M144.83M | −1.5% |
| Shares Outstanding (Diluted) | 143.29M145.50M | −1.5% |
05—Questions
Frequently Asked Questions
What drove the increase in net income in the second quarter of 2024?
Net income attributable to Verisk rose to $308.1 million from $196.9 million. The main drivers were an investment gain of $99.8 million, tied mainly to settlement of retained interests from prior business sales, and revenue growth of $41.8 million, with operating income up to $318.7 million from $306.0 million.
How did Verisk manage its debt in the first half of 2024?
Verisk issued $600.0 million of 5.25% senior notes due 2034 on June 5, 2024, and used the proceeds to tender $400.0 million of its 4.00% senior notes due 2025 at $987.09 per $1,000 principal. This reduced the 2025 notes outstanding to $500.0 million and produced a $3.6 million net gain on early extinguishment. Total debt was $3,069.2 million at June 30, 2024.
What did Verisk do with shareholder capital in 2024?
In the six months ended June 30, 2024, Verisk repurchased $350.0 million of common stock through accelerated share repurchase agreements and paid $111.3 million in dividends. Cash dividends declared were $0.39 per share in the second quarter, up from $0.34 a year earlier. At June 30, 2024, $1,291.5 million remained available under the repurchase program.
What are the main legal risks disclosed in the filing?
The filing describes several pending matters, including 19 telematics-related putative class actions against GM, OnStar, Hyundai, LexisNexis and Verisk, consolidated in a multidistrict proceeding, and a Nepalese tax indemnification claim. The company says it cannot reasonably estimate potential liability for these matters because they are at early stages. It also notes that the ERISA class action settlement became effective June 21, 2024.
How did the Energy business sale affect the prior-year results?
The Energy business was sold on February 1, 2023, for a net cash price of $3,066.4 million and is reported as discontinued operations. For the six months ended June 30, 2023, the loss from discontinued operations was $145.5 million, which largely reflects a $135.3 million loss on sale of assets and related charges, so year-over-year net income comparisons are distorted.
06—Continue