VRSK · Q3 2025 Earnings

Cautious

Verisk Analytics

Reported October 29, 2025

30-second summary

Verisk delivered 5.9% reported revenue growth to $768M and 5.5% organic constant-currency growth — a step down from Q2's 7.9% OCC — as light severe weather hit transactional claims and the AccuLynx deal got a second FTC request. Management cut FY revenue guidance by $30M at the midpoint and trimmed EBITDA, but held EPS at $6.80–$7.00 by offsetting with a $20M midpoint cut to interest expense and the quietly withdrawn AccuLynx contribution. The defensive posture is new: organic growth is decelerating, the platform M&A thesis is on hold, and management is leaning on subscription resilience (8.7% OCC) and AI upsell anecdotes to bridge investors to 2026.

Headline numbers

EPS

Q3 FY2025

$1.72

Revenue

Q3 FY2025

$0.77B

+5.9% YoY

Free cash flow

Q3 FY2025

$0.34B

Operating margin

Q3 FY2025

45.0%

Key financials

Q3 FY2025

Metric	Q3 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$0.77B	+5.9%	$0.77B	-0.6%
EPS	$1.72	—	$1.88	-8.5%
Operating margin	45.0%	—	45.9%	-90bps
Free cash flow	$0.34B	—	$0.19B	+78.1%

Guidance

Full-year revenue and EBITDA guidance lowered; interest expense cut sharply; acquisition revenue contribution withdrawn; EPS guidance maintained.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2025	$3.09 billion to $3.13 billion	$3.05 billion to $3.08 billion	-$40 to -$50 million; midpoint down $30 million	Lowered
Adjusted EBITDA	FY 2025	$1.70 billion to $1.74 billion	$1.69 billion to $1.72 billion	-$10 to -$20 million; midpoint down $10 million	Lowered
Net Interest Expense	FY 2025	$190 million to $210 million	$165 million to $185 million	-$25 to -$45 million; midpoint down $20 million	Lowered
Acquisition Revenue Contribution	FY 2025	$40 million to $50 million	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Adjusted EBITDA Margin (55.0% to 55.8%), Tax Rate (23% to 25%), Diluted Adjusted EPS ($6.80 to $7.00)

Segment KPIs

Q3 FY2025

Segment	Q3 FY2025	YoY
Underwriting	$0.542B	+6.9%
Claims	$0.226B	+3.6%

Other KPIs

Q3 FY2025

Segment	Q3 FY2025
Adjusted EBITDA	$429 million
Adjusted EBITDA Margin	55.8%
Organic Constant Currency Revenue Growth	5.5%
Organic Constant Currency Adjusted EBITDA Growth	8.8%
Free Cash Flow	$336 million
Operating Cash Flow	$404 million

Management tone

Narrative arc: Platform ambition (Q2) → Defensive operational story with AI proof points (Q3).

Last quarter Verisk was telling a platform/ecosystem story anchored by a $2.35B AccuLynx check; this quarter that story is on regulatory hold and management has pivoted to defending the underlying business. The shift from "raising guidance" rhetoric in Q2 to "we view these factors as temporary" in Q3 is striking. Management's framing — "Beneath the near-term light weather impacts reflected in our current quarter's results is clear and unmistakable evidence that our strategic engagement initiatives... are enhancing the value of our data" — is the language of a company asking investors to look past a disappointing print.

AI moved from roadmap to revenue between Q2 and Q3. Last quarter Underwriting Assistant was sold as workflow transformation; this quarter ExactExpert has "over 40 clients using the solution, including six of the top 10 carriers" and management explicitly says "we have been able to deploy an AI enhancement to their productivity that adds value, and we have been able to realize upsell revenue from that enhancement." This is the first quarter Verisk is naming a deployed AI product with a client count and an upsell mechanic — a credible response to skeptics asking whether the AI narrative will monetize.

The AccuLynx posture has shifted from "closing end of Q3" (Q2 guide assumption) to indefinite. The Q2 brief had AccuLynx as the centerpiece of a strategic repositioning toward network/SaaS; this quarter management retreats to "we continue to believe in the strategic and financial merits of the transaction" while pulling all 2025 contribution from guidance. The deal isn't dead, but the timing slip pushes the 2026 accretion commitment into doubt and removes the M&A growth bridge management had been selling.

Subscription growth is being repositioned as the structural story now that transactional has gone wrong on weather. Q2's framing was balanced — subscription stability plus transactional inflection. Q3's framing leans heavily on subscription resilience as the true health indicator, with management volunteering that AI integration creates "an opportunity for us as we are looking at our subscription contracts where we have the ability to factor that in." Translation: pricing power on renewals is the new bridge to growth re-acceleration.

The auto narrative hardened into a strategic response rather than a fix. Management is now talking about "focusing on areas where we may have a deeper data set and some deeper analytic objects that can build unique value propositions" — i.e., conceding share in commoditized auto and competing only where data depth matters. That's a meaningful product-strategy concession dressed in differentiation language.

Recurring themes management leaned on this quarter:

AI commercialization and upsell opportunity realizationSubscription revenue resilience despite transactional headwindsElevated strategic client engagement driving pipeline and sales momentumProprietary data as competitive moat in AI-driven industryMargin expansion through operational leverage and cost disciplineTemporary weather and government contract headwinds masking underlying business strength

Risks management surfaced:

FTC second request on AccuLinks transaction creating regulatory uncertainty and timing riskExceptionally low severe weather in Q3 impacting transactional claims assignments and property estimating revenueCompetitive pressure in personal lines auto business and non-rate action dealsAI startups attempting to apply large language models to insurance workflows without proprietary data moatsPremium growth normalization from high single digits to mid-single digits reducing potential tailwinds

Answers to last quarter's watch list

Q3 organic CC growth holding above 6% — Missed. OCC came in at 5.5%, below the watch threshold and below the FY 6–8% band's low end. Management attributes this to "light weather impacts" and frames it as temporary, but the print forced the FY revenue guide cut. Status: Resolved negatively

AccuLynx close timing and $40–50M FY M&A revenue contribution — Resolved negatively in dramatic fashion. FTC issued a second request for information; management removed all 2025 AccuLynx contribution from guidance and said "we do not expect to realize any material benefit from the pending transaction in 2025." The end-of-Q3 close assumption was wrong; the deal is now in regulatory limbo with no disclosed close timeline. Status: Resolved negatively

Auto business trajectory and ex-auto disclosure — No segment-level OCC ex-auto disclosure was provided. Management acknowledged continued "competitive pressure in personal lines auto" and pivoted to a differentiation-via-data-depth strategy, implicitly conceding the drag persists. Status: Continue monitoring

Transactional revenue inflection — Reversed. Q2's 1.8% OCC transactional growth did not hold; weather drove transactional weakness this quarter. The Q2 inflection now looks weather-flattered rather than structural. Status: Resolved negatively

Adjusted EBITDA margin trajectory and potential H2 raise — No raise; management trimmed the EBITDA dollar guide and held the margin range at 55.0–55.8%. Q3 margin printed at 55.8%, the top of the band — so the operational leverage is real, but revenue weakness forced the dollar cut. The hypothesis that strong H1 margins would carry into an H2 EBITDA raise was wrong. Status: Resolved negatively

Leverage progress and post-close debt disclosure — The AccuLynx slip materially changes the leverage trajectory in 2025; the $20M midpoint cut to net interest expense guidance (now $165–185M) suggests Verisk is paying down or has refinanced debt rather than carrying acquisition financing. This is a favorable read but for the wrong reason. Status: Continue monitoring

What to watch into next quarter

Q4 organic CC growth — anything below 6% confirms the deceleration is structural rather than weather; above 7% supports the "temporary" framing management is selling.

AccuLynx FTC second-request resolution — watch for any close timeline disclosure or, alternatively, a deal termination. The longer the silence, the more likely the strategic repositioning narrative needs to be rebuilt without AccuLynx.

ExactExpert client count and AI upsell quantification — management named "over 40 clients" and "six of the top 10 carriers." Next quarter should bring either an updated count or a dollar disclosure if the AI commercialization story is real.

Subscription OCC growth — held at 8.7% this quarter on tough 9.1% comp. If this drops below 8% in Q4 the structural story management is now leaning on weakens materially.

Initial 2026 guidance framing — management said three times they have "confidence in our ability to deliver results in line with our long-term targets for this year, for 2026, and beyond." The Q4 call will test that. Long-term targets are 6–8% organic growth; an opening 2026 guide below 6% would be the real bear signal.

Auto Underwriting segment disclosure — management's strategic pivot to differentiation-via-data-depth implies share concession in commoditized auto. Watch for any explicit auto sub-segment metric or the magnitude of the drag on Underwriting OCC.

Sources

Verisk Analytics Q3 2025 earnings press release (Form 8-K exhibit), filed October 29, 2025 — https://www.sec.gov/Archives/edgar/data/1442145/000143774925032072/ex_856088.htm

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