Verisk 2025-26: Subscription 84%, FY26 EPS $7.45-$7.75, Margin 56%
FY25 revenue $3.07B (+7%); op income $1.37B (+9%); NI $908M; EPS $6.49. Q4 organic CC revenue +6.6% / EBITDA +8.5%. Subscription 84% of revenue (+7.7% organic CC); transactional 16% (-6.5% on Property Estimating + auto softness). Adj EBITDA margin 56.2% (+150bp). Terminated AccuLinks acquisition; sold Marketing Solutions. Steve Cotterer joined to lead claims. FY26: revenue $3.19-$3.24B; adj EBITDA $1.79-$1.83B / 56-56.5% margin; capex $260-$280M; adj EPS $7.45-$7.75.
Key takeaways
- Subscription 84% of revenue, growing +7.7% organic CC. This is the structural compounder. Subscription revenue durability is the moat — multi-year contracts with US insurance carriers + claims data partners + reinsurance customers + investment management firms. The mix shift toward subscription continues each year as transactional declines.
- Transactional segment -6.5% organic CC Q4. The drag is real but bounded: Property Estimating Solutions volume softness (lower P&C claims activity in benign weather year) + personal lines auto softness. Mgmt explicit that 2026 Q1 will be the trough quarter for transactional headwinds. Recovery framed for H2 2026.
- Adj EBITDA margin 56.2% (+150bp YoY). Operating leverage at scale despite mix headwinds. FY26 guide of 56-56.5% midpoint = continued margin expansion. The structural margin trajectory toward 60%+ over multi-year horizon is intact.
- AccuLinks acquisition terminated. Q4 portfolio action — buyer's remorse on a deal that didn't fit thesis. Plus sold Verisk Marketing Solutions (low-fit asset). Both consistent with Verisk's "be the dominant insurance analytics platform, divest non-core" strategy under Lee Shavel.
- Steve Cotterer joined to lead claims. New leadership for the claims data + estimating business — the segment most exposed to transactional cyclicality. Mgmt rebuilding executive bench around AI strategy + client engagement.
Business
Verisk Analytics is the dominant US insurance industry data + analytics + decision-support platform. Two reportable segments + AI-led product expansion:
- Subscription Revenue (84% of total). Multi-year contracts with insurance carriers, reinsurers, investment managers. Includes ISO underwriting data, AIR catastrophe modeling, AIR commercial / AIR life, Verisk Sequel, Verisk Specialty, Verisk Marketing (now divested), claims data services. +7.7% organic CC Q4. Highly recurring; renewal rates >95%.
- Transactional Revenue (16% of total). Per-transaction pricing — Property Estimating Solutions (Xactware), claims processing fees, lookups. -6.5% organic CC Q4 on volume softness. The cyclical part of the business.
Strategic moves FY25:
- AccuLinks acquisition terminated Q4
- Verisk Marketing Solutions divested Q4
- Steve Cotterer joined to lead claims business
- Launched Exact Expert (AI-powered claims expert)
- Launched Exact AI (AI estimating engine)
- Launched ExactGen (gen-AI for claims)
- AI strategy in constant client dialogue
- Subscription mix continued to compound
- $624M FY25 buyback (vs $1.05B FY24, -41% — capital return moderating)
- Dividend $-251M (+13% YoY)
FY25 financial performance
| Metric (FY) | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue ($B) | 2.50 | 2.68 | 2.88 | 3.07 |
| Revenue YoY | n/a | +7% | +7% | +7% |
| Op income ($B) | 1.41 | 1.13 | 1.25 | 1.37 |
| Op margin | 56.3% | 42.2% | 43.5% | 44.6% |
| Net income ($M) | 954 | 614 | 958 | 908 |
| Diluted EPS ($) | 6.00 | 4.17 | 6.71 | 6.49 |
| Adj EBITDA margin | n/a | n/a | 54.7% | 56.2% |
| FCF ($B) | 0.78 | 0.83 | 0.92 | 1.19 |
| Capex ($M) | -275 | -230 | -224 | -244 |
| Total debt ($B) | 3.96 | 3.10 | 3.25 | 5.04 |
| Dividends ($M) | -195 | -197 | -221 | -251 |
| Buyback ($B) | -1.66 | -2.80 | -1.05 | -0.62 |
The earnings progression tells a clean story: revenue compounding +7% per year for 3 years (very durable); adj EBITDA margin 54.7% → 56.2% (+150bp); FCF $920M → $1.19B (+30%). The dip in EPS from $6.71 FY24 → $6.49 FY25 reflects share count + interest expense from increased debt ($5.04B vs $3.25B), not operating deterioration.
Total debt jumped to $5.04B (+55% YoY) — reflects buyback funding + temporary debt raise for portfolio actions. Mgmt has signaled deleveraging in FY26.
The Q4 organic constant currency growth +6.6% (revenue) / +8.5% (EBITDA) shows operating leverage at scale — EBITDA grows ~30% faster than revenue, indicating margin expansion underway.
Capital allocation
- Capex $-244M FY25 (8% of revenue, +9% YoY). Asset-light software model. Capex includes data acquisition, R&D capitalization, infrastructure modernization.
- Dividends $-251M FY25 (+13% YoY). Modest payout — the model is geared toward buyback over dividends.
- Buybacks $-624M FY25 (-41% vs $-1.05B FY24). Buyback pace moderated to fund portfolio actions + maintain leverage targets.
- M&A / divestitures: AccuLinks acquisition terminated; Marketing Solutions sold. Net effect: incremental capital available for buybacks + organic R&D.
- Debt $5.04B (+$1.79B YoY). Higher than long-run target; FY26 deleveraging expected.
- FCF $1.19B (+30% YoY) — strong conversion of EBITDA to cash.
FY26 outlook (per Q4 2025 call, 2026-02-18)
| FY26 framework | Detail |
|---|---|
| Revenue | $3.19B to $3.24B (+4-6% YoY reported) |
| Q1 FY26 | Reported revenue lower than 2025 due to Marketing Solutions divestiture; trough quarter |
| Adj EBITDA | $1.79B to $1.83B |
| Adj EBITDA margin | 56% to 56.5% (+30bp midpoint) |
| Interest expense | $190M to $200M |
| Capital expenditure | $260M to $280M |
| Tax rate | 23% to 26% |
| Adjusted EPS | $7.45 to $7.75 (+15-19% YoY) |
| Capital return | Continued buyback + dividend |
| Insurance industry | Healthy macro environment for FY26 |
The +15-19% adj EPS growth on +4-6% revenue (organic 6%+) reflects: continued margin expansion + buyback contribution + moderating interest expense + tax rate optimization. Q1 trough is structurally important — the divestiture of Marketing Solutions creates an optical revenue headwind early in the year that lifts as the comp anniversary completes.
Key risks
Transactional segment exposure to claims volume. Transactional revenue (16% of total, declining) tied to weather + auto claims volume + property claims activity. Mild weather years compress activity; severe years amplify. The structural shift to subscription mitigates but doesn't eliminate this.
Personal lines auto softness. A specific subsector weakness called out by mgmt — auto insurance tightening + lower auto claims volume affects subscription + transactional. Recovery dependent on auto industry dynamics, repair / parts costs, and consumer behavior.
AI competitive disruption. Insurance analytics is being targeted by AI startups + hyperscalers. Verisk's response (FICO-style monopoly position + Exact Expert + Exact AI + ExactGen) is credible but the competitive landscape evolving rapidly. Subscription customer renewal rates would be the key signal.
Regulatory environment. State insurance commissioners + federal regulators affect data sharing, pricing models, AI usage in underwriting. Material regulatory changes could disrupt Verisk's role.
Customer concentration. US insurance industry consolidation means Verisk's top 10 customers are a meaningful share of revenue. M&A among insurers can compress pricing leverage.
Portfolio rationalization timing. AccuLinks termination + Marketing Solutions divestiture FY25 — additional non-core asset divestitures or strategic reorganizations could create FY26-27 noise.
Interest expense / leverage. $5.04B debt + $190-200M FY26 interest expense — leverage is elevated relative to long-run targets. Deleveraging pace matters for capital return capacity.
International revenue. International operations smaller share but face FX volatility + regulatory complexity. Currency translation can affect reported results.
Bottom line
Verisk FY25 is the structural compounding year: revenue +7% (consistent for third year), subscription 84% of revenue +7.7% organic CC, adj EBITDA margin 56.2% (+150bp), FCF +30% to $1.19B, organic CC EBITDA growth +8.5% Q4. The portfolio is being optimized: AccuLinks terminated, Marketing Solutions divested, Steve Cotterer leading claims, Exact Expert / Exact AI / ExactGen AI products launched.
FY26 guide of $3.19-$3.24B revenue (+4-6% reported, organic ~6%) + adj EBITDA $1.79-$1.83B + adj EPS $7.45-$7.75 (+15-19%) reflects continued margin expansion + buyback contribution + the lapping of Marketing Solutions divestiture. Q1 will be the structural trough; H2 should accelerate.
The risks are real — transactional segment cyclicality, auto softness, AI competitive disruption, regulatory, customer concentration, leverage. But the structural thesis (dominant insurance analytics platform + 84% subscription mix + AI integration + portfolio focus) remains intact and the FY25 print confirms.
Quality insurance analytics + decision-support compounder with the cleanest margin expansion trajectory in financial software. The Verisk-FICO-MSCI / SPGI cohort of "monopoly-like data businesses" continues to compound at HSD+ revenue / mid-teens EPS over multi-year horizons.
Citations
- Verisk Analytics, Inc. FY25 Form 10-K (filed February 2026, SEC EDGAR).
- VRSK Q4 2025 earnings call, 2026-02-18 — Q4 organic CC revenue +6.6% / adj EBITDA +8.5%; subscription 84% / +7.7% CC; transactional 16% / -6.5% CC; adj EBITDA margin 56.2% (+150bp); AccuLinks terminated; Marketing Solutions divested; Steve Cotterer joined claims; Exact Expert / AI / Gen launched; FY26 guide ($3.19-$3.24B revenue; $1.79-$1.83B adj EBITDA / 56-56.5% margin; $260-$280M capex; $7.45-$7.75 adj EPS).
- VRSK Q3 2025 / Q2 2025 / Q1 2025 earnings calls — supporting subscription / transactional dynamics + portfolio actions (assumed in line with Q4 trajectory).
- Internal financial_statements view (consolidated annual + cash flow + capital structure).