美國
證券交易委員會
華盛頓特區20549
表格
| | 根據1934年證券交易法第13或15(d)節的季度報告 |
截至季度結束日期的財務報告
或者
| | 根據1934年證券交易法第13或15(d)節的轉型報告書 |
過渡期從 到
委託文件編號：001-39866
VERISk ANALYTICS, INC.
(根據其章程規定的註冊人準確名稱)
| | |
| （設立或組織的其他管轄區域） | （納稅人識別號碼） |
| | |
| | |
| | |
| ，（主要行政辦公地址） | (郵政編碼) |
(
(註冊人電話號碼，包括區號)
在法案第12(b)條的規定下注冊的證券：
| 每一類的名稱 | 交易標誌 | 註冊交易所的每個名稱 |
| | | |
請勾選標記，以表明該註冊公司：（1）在過去12個月內（或該公司被要求提交該類報告的較短時間內），已經按照證券交易法案第13條或15（d）條的規定提交了所有所需提交的報告；且（2）在過去90天內一直受到該項提交要求的約束。
請勾選以下內容。申報人是否已在過去12個月內（或申報人需要提交此類文件的時間較短的期間內）逐個以電子方式提交了根據規則405提交的互動數據文件。這章的交易中規定。
用複選標記表示公司是否爲大型加速交易商、加速交易商、非加速交易商或較小的報告公司。參見《交易所法》第120億.2條中對"大型加速交易商"、"加速交易商"、"較小的報告公司"和"新興增長公司"的定義。
| | ☒ | 加速文件申報人 | ☐ | |||
| 非加速文件提交人 | ☐ | 更小的報告公司 | | |||
| 新興成長公司 | |
如果是新興成長公司，請在複覈者處標明勾選符號，說明註冊者是否選擇不使用依據證券交易法第13(a)條規定提供的任何新的或修訂後的財務會計準則的擴展過渡期。 ☐
請勾選以下內容。申報人是否是外殼公司（根據證券交易法規則12b-2定義）。 是
截至2024年10月25日，
第10-Q表的索引
目錄
| 頁碼 |
|
| 第一部分 — 財務信息 |
|
| 1 | |
| 2 | |
| 3 | |
| 4 | |
| 6 | |
| 7 | |
| 29 | |
| 40 | |
| 40 | |
| 第二部分 — 其他信息 |
|
| 41 | |
| 41 | |
| 41 | |
| 42 | |
| 42 | |
| 42 | |
| 42 | |
| 44 | |
| 展品31.1 |
|
| 展覽 31.2 |
|
| 附件32.1 |
|
第一部分 — 財務信息
簡化聯合資產負債表（未經審計）
| 2024年9月30日 | 2023 年 12 月 31 日 | |||||||
| （以百萬計，股票和每股數據除外） | ||||||||
| 資產： | ||||||||
| 流動資產： | ||||||||
| 現金和現金等價物 | $ | $ | ||||||
| 應收賬款，扣除可疑賬款備抵金美元 和 $，分別地 | ||||||||
| 預付費用 | ||||||||
| 應收所得稅 | ||||||||
| 其他流動資產 | ||||||||
| 流動資產總額 | ||||||||
| 非流動資產： | ||||||||
| 固定資產，淨額 | ||||||||
| 經營租賃使用權資產，淨額 | ||||||||
| 無形資產，淨額 | ||||||||
| 善意 | ||||||||
| 遞延所得稅資產 | ||||||||
| 其他非流動資產 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債和股東權益 | ||||||||
| 流動負債： | ||||||||
| 應付賬款和應計負債 | $ | $ | ||||||
| 短期債務和長期債務的流動部分 | ||||||||
| 遞延收入 | ||||||||
| 經營租賃負債 | ||||||||
| 應繳所得稅 | ||||||||
| 流動負債總額 | ||||||||
| 非流動負債： | ||||||||
| 長期債務 | ||||||||
| 遞延所得稅負債 | ||||||||
| 經營租賃負債 | ||||||||
| 其他非流動負債 | ||||||||
| 負債總額 | ||||||||
| 承付款和或有開支（注16） | ||||||||
| 股東權益： | ||||||||
| 普通股，$ 面值； 已獲授權的股份； 已發行的股票； 和 分別已發行股份 | ||||||||
| 額外的實收資本 | ||||||||
| 庫存股，按成本計算， 和 分別是股票 | ( | ) | ( | ) | ||||
| 留存收益 | ||||||||
| 累計其他綜合收益 | ||||||||
| Verisk 股東權益總額 | ||||||||
| 非控股權益 | ||||||||
| 股東權益總額 | ||||||||
| 負債和股東權益總額 | $ | $ | ||||||
隨附說明是這些簡明合併財務報表的一部分。
簡要的綜合收入表（未經審計）
| 截至9月30日的三個月 | 截至9月30日的九個月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (以百萬爲單位，除了份額和每股數據) | ||||||||||||||||
| 收入 | $ | $ | $ | $ | ||||||||||||
| 營業費用： | ||||||||||||||||
| 營業成本（不包括單獨列示的項目） | ||||||||||||||||
| 銷售、一般及行政費用 | ||||||||||||||||
| 固定資產折舊和攤銷 | ||||||||||||||||
| 無形資產攤銷 | ||||||||||||||||
| 淨營業費用 | ||||||||||||||||
| 營業利潤 | ||||||||||||||||
| 其他收入（支出）： | ||||||||||||||||
| 債務提前償還的淨收益 | ||||||||||||||||
| 投資收益（損失） | ( | ) | ( | ) | ||||||||||||
| 利息費用，淨額 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 總其他(收益)費用，淨額 | ( | ) | ( | ) | ( | ) | ||||||||||
| 未來營業收入淨額 | ||||||||||||||||
| 所得稅費用 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 持續經營業務收入 | ||||||||||||||||
| 停止經營業務淨稅後損失爲$, $, $重新分類調整，淨稅後，包括納入「其他收入（費用），淨額」的損失（收益）$)，分別爲（附註7） | ( | ) | ||||||||||||||
| 淨收入 | ||||||||||||||||
| 減：非控制權益淨虧損 | ||||||||||||||||
| 淨利潤歸屬於Verisk | $ | $ | $ | $ | ||||||||||||
| 每股基本淨利潤歸屬於Verisk： | ||||||||||||||||
| 持續經營業務收入 | $ | $ | $ | $ | ||||||||||||
| 來自終止經營的損失 | ( | ) | ||||||||||||||
| 每股基本淨利潤歸屬於Verisk： | $ | $ | $ | $ | ||||||||||||
| 每股稀釋淨利潤歸屬於Verisk： | ||||||||||||||||
| 持續經營業務收入 | $ | $ | $ | $ | ||||||||||||
| 來自終止經營的損失 | ( | ) | ||||||||||||||
| 歸屬於Verisk的每股攤薄淨利潤： | $ | $ | $ | $ | ||||||||||||
| | ||||||||||||||||
| 基本 | ||||||||||||||||
| 稀釋的 | ||||||||||||||||
隨附說明是這些簡明合併財務報表的一部分。
綜合收益簡明綜合財務報表（未經審計）
| 截至9月30日的三個月 |
截至9月30日的九個月 |
|||||||||||||||
| 2024 |
2023 |
2024 |
2023 |
|||||||||||||
| 淨收入 |
$ | $ | $ | $ | ||||||||||||
| 其他綜合收益(損失), 淨額(稅後): |
||||||||||||||||
| 外幣翻譯調整 |
( |
) | ||||||||||||||
| 養老金和退休責任調整 |
||||||||||||||||
| 其他綜合收益（損失）總額 |
( |
) | ||||||||||||||
| 綜合收益 |
||||||||||||||||
| 非控股利益歸屬的全面(收益)損失減少 |
( |
) | ( |
) | ||||||||||||
| 歸屬於Verisk的綜合收益 |
$ | $ | $ | $ | ||||||||||||
隨附說明是這些簡明合併財務報表的一部分。
股東權益簡明合併變動表（未經審計）
截至2024年和2023年9月30日三個月結束
| 普通股發行 | 票面價值 | 股本外溢價 | 庫存股 | 未分配利潤 | 累計其他全面收益/(損失) | Verisk股東權益總計 | 非控制權益 | 股東權益合計 | ||||||||||||||||||||||||||||
| （以百萬人民幣表示，除普通股數據外） | ||||||||||||||||||||||||||||||||||||
| 2024年7月1日餘額 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
|
| — | ( | ) | |||||||||||||||||||||||||||||||||
| 其他綜合（損失）收益 | — | |||||||||||||||||||||||||||||||||||
| 非控制權益投資 | — | |||||||||||||||||||||||||||||||||||
| 普通股股息 (1) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 購入庫藏股 (股） | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 回購但尚未結算的庫存股份 | — | ( | ) | |||||||||||||||||||||||||||||||||
| 與股份回購相關的消費稅 | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 股票期權行權（從庫存股票轉讓）， 從庫存股份中轉移的股份 | — | |||||||||||||||||||||||||||||||||||
| 受限股（「RSA」）到期（ 從庫存股份中轉移的股份) | — | ( | ) | |||||||||||||||||||||||||||||||||
| 股票補償費用 | — | |||||||||||||||||||||||||||||||||||
| 淨RSAs股份結算（ 股份用於代扣稅款) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 其他股份發行（ 股份從庫存股轉入) | — | |||||||||||||||||||||||||||||||||||
| 2024年9月30日餘額 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| 2023年7月1日餘額 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| 淨收入 | — | |||||||||||||||||||||||||||||||||||
| 其他綜合損失 | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| 對非控股權益的投資 | — | |||||||||||||||||||||||||||||||||||
| 普通股股息 (1) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 已收購的庫存股股） | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 與股票回購相關的消費稅 | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 股票期權行權（從庫存股票轉讓）， 從庫存股中轉移的股份) | — | |||||||||||||||||||||||||||||||||||
| 已過期的限制性股票獎勵 從庫存股中轉移的股份） | — | |||||||||||||||||||||||||||||||||||
| 股票補償費用 | ||||||||||||||||||||||||||||||||||||
| 來自RSAs的淨份額結算（ 用於稅務結算的扣留股份） | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| 其他股票發行（ 從庫存股中轉移的股份） | — | |||||||||||||||||||||||||||||||||||
| 2023年9月30日餘額 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
_______________
(1) 請參閱 注11股東權益，有關每股宣佈的季度現金分紅討論。
隨附說明是這些簡明合併財務報表的一部分。
VERISk ANALYTICS，INC。
股東權益變動總表（未經審核）
截至2024年和2023年9月30日止九個月
| 普通股發行 | 帳面價值 | 資本公積金 | 庫藏股 | 保留收益 | 累積其他全面收益/(虧損) | Verisk股東權益總額 | 非控制權益 | 股東權益總計 | ||||||||||||||||||||||||||||
| （以百萬為單位，除股票資料外） | ||||||||||||||||||||||||||||||||||||
| 2024年1月1日的餘額 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| 凈利潤 | — | ( | ) | |||||||||||||||||||||||||||||||||
| 其他綜合（損失）收益 | — | |||||||||||||||||||||||||||||||||||
| 投資於非控股權益 | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| 普通股股利 (1) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 購回庫藏股 ( ）股份 | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 已回購但尚未結算的庫藏股股份 | ( | ) | ||||||||||||||||||||||||||||||||||
| 與股份回購相關的消費稅 | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 已行使的股期權 (股份由庫藏股轉讓) 已行使的股期權 (股份由庫藏股轉讓) | — | |||||||||||||||||||||||||||||||||||
| 已放棄的績效單位 (股份由庫藏股轉讓) 已放棄的績效單位 (股份由庫藏股轉讓) | — | ( | ) | |||||||||||||||||||||||||||||||||
| 已放棄的限制性股份 (股份由庫藏股轉讓) 從庫存股中轉移的股份) | — | ( | ) | |||||||||||||||||||||||||||||||||
| 以股份為基礎之報酬支出 | — | |||||||||||||||||||||||||||||||||||
| 來自RSAs的凈股份結算( 扣除用於稅務結算的股份) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 其他股票發行( 從庫存股中轉移的股份) | — | |||||||||||||||||||||||||||||||||||
| 2024年9月30日結餘 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| 2023年1月1日的結餘 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| 凈利潤 | — | |||||||||||||||||||||||||||||||||||
| 其他綜合收益 | — | ( | ) | |||||||||||||||||||||||||||||||||
| 投資於非控股權益 | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| 普通股股息 (1) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 已購回庫藏股（ 股） | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 與股份回購相關的特稅 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| 通過加速股份回購計劃回購的股份尚未結算 | ( | ) | ||||||||||||||||||||||||||||||||||
| 期權行使（ 股份移入庫藏股） | — | |||||||||||||||||||||||||||||||||||
| PSUs失效（ 股份移入庫藏股） | — | ( | ) | |||||||||||||||||||||||||||||||||
| RSAs失效（ 股份移入庫藏股） | — | ( | ) | |||||||||||||||||||||||||||||||||
| 以股份為基礎之報酬支出 | — | |||||||||||||||||||||||||||||||||||
| RSAs的淨股份解決（ 股份被扣留以進行稅務解決。) | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| 其他股票發行 ( 股份從庫藏股中轉讓) | — | |||||||||||||||||||||||||||||||||||
| 2023年9月30日的餘額 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
______________
(1) 參照 附註11有關季度每股宣布的現金股息的股東權益討論
相關附註是這些基本報表的一個不可或缺的部分。
未經審核的縮短合併現金流量表
| 截至9月30日的三個月 | 截至9月30日的九個月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (以百萬為單位) | ||||||||||||||||
| 經營活動現金流量： | ||||||||||||||||
| 凈利潤 | $ | $ | $ | $ | ||||||||||||
| 調整淨利潤以達經營活動所提供之淨現金流量： | ||||||||||||||||
| 固定資產折舊和攤銷 | ||||||||||||||||
| 營業無形資產攤銷 | ||||||||||||||||
| 折舊債務發行成本和原始發行折讓，減去原始發行溢價 | ||||||||||||||||
| 呆帳費用 | ||||||||||||||||
| 提早償債而產生的淨收益 | ( | ) | ||||||||||||||
| 資產出售損失 | ||||||||||||||||
| 損失負擔基於成本的投資 | ||||||||||||||||
| 以股份為基礎之報酬支出 | ||||||||||||||||
| 在非公開公司投資解決時的淨收益 | ( | ) | ||||||||||||||
| 推延所得稅 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 處置固定資產損失 | ||||||||||||||||
| 租約修改收益 | ( | ) | ( | ) | ||||||||||||
| 收購相關負債調整 | ( | ) | ||||||||||||||
| 資產和負債變動，扣除收購影響： | ||||||||||||||||
| 應收帳款 | ( | ) | ( | ) | ||||||||||||
| 預付費用及其他資產 | ( | ) | ||||||||||||||
| 營運租賃權利資產，淨額 | ||||||||||||||||
| 所得稅 | ( | ) | ||||||||||||||
| 應付款及應計費用 | ( | ) | ||||||||||||||
| 透過租賃取得的收益 | ( | ) | ( | ) | ||||||||||||
| 營業租賃負債 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他負債 | ( | ) | ( | ) | ( | ) | ||||||||||
| 經營活動產生的淨現金流量 | ||||||||||||||||
| 投資活動之現金流量: | ||||||||||||||||
| Acquisitions and purchase of additional controlling interest, net of cash acquired of $, $, $。、分別 | ( | ) | ( | ) | ||||||||||||
| 資產出售收益 | ||||||||||||||||
| 非上市公司的投資 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 收到的非上市公司投資結算款項 | ||||||||||||||||
| 資本支出 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 與收購相關的托管釋放（資金） | ( | ) | ||||||||||||||
| 其他投資活動，淨額 | ( | ) | ( | ) | ||||||||||||
| 投資活動提供的淨現金流量（使用） | ( | ) | ( | ) | ( | ) | ||||||||||
| 來自籌資活動的現金流量: | ||||||||||||||||
| 長期債務發行所得款項，扣除原發行折扣後淨額 | ||||||||||||||||
| 發行債務成本支付 | ( | ) | ( | ) | ||||||||||||
| 提前償還債務付款 | ( | ) | ||||||||||||||
| 償還短期債務 | ( | ) | ||||||||||||||
| 偿还原始期限超过三个月的短期债务 | ( | ) | ||||||||||||||
| 購回普通股 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 尚未结算的股份回购 | ( | ) | ( | ) | ( | ) | ||||||||||
| 支付與收購相關的條件負債 | ( | ) | ||||||||||||||
| 行使股票期權的收益 | ||||||||||||||||
| 限制股票和績效股權獎勵稅款的淨股份償還 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 分紅派息 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他籌資活動，淨額 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 籌集資金的淨現金流量 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 匯率變動的影響 | ||||||||||||||||
| 現金及現金等價物的淨（減少）增加額 | ( | ) | ||||||||||||||
| 期初現金及現金等價物 | ||||||||||||||||
| 現金及現金等價物期末餘額 | $ | $ | $ | $ | ||||||||||||
| 補充揭露： | ||||||||||||||||
| 所得稅已支付金額 | $ | $ | $ | $ | ||||||||||||
| 支付利息 | $ | $ | $ | $ | ||||||||||||
| 非現金投資和籌資活動： | ||||||||||||||||
| 收購日確立的递延税（資產）負債 | $ | $ | ( | ) | $ | $ | ||||||||||
| 作為處分的一部分出售的淨資產 | $ | $ | $ | $ | ||||||||||||
| 融資租賃增加 | $ | $ | $ | $ | ||||||||||||
| 營運租賃（終止）增加，淨額 | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| 固定資產並入應付帳款和應計負債 | $ | $ | ( | ) | $ | $ | ||||||||||
相關附註是這些基本報表的一個不可或缺的部分。
簡明綜合財務報表註釋（未經查核）
（金額以百萬為單位，除非另有說明，股份和每股數據除外）
全球保險業的戰略數據分析和科技合作夥伴Verisk Analytics, Inc.（以下簡稱「公司」），助力客戶提升運營效率，改善核保和理賠結果，打擊欺詐，並對全球風險，包括氣候變化，極端事件，可持續性和政治問題做出明智決策。通過先進的數據分析，軟件，科學研究和深厚的行業知識，我們幫助構建個人，社區和企業的全球韌性。我們在納斯達克全球精選市場以逐筆明細“VRSK”進行交易。
我們附屬的未經審計的綜合財務報表是根據美國通行的會計準則（"美國公認會計原則"）編製的。按照這些會計原則編制財務報表需要管理層進行估計和假設，這些估計和假設影響了資產和負債的報告金額，以及於財務報表日期披露的應收賬款和應付賬款的金額，以及在報告期間所報表的收入和費用金額。重要的估計包括收購購買價格分配、商譽和無形資產的公允價值、递延所得稅資產和負債的實現、與收購相關的負債、股票期權和績效股份單的公允價值的股票報酬，以及養老金和退休福利的資產和負債。實際結果最終有可能與這些估計不同。 可能 最終結果可能與這些估計有所不同。
我們的簡明綜合基本報表截至 2024年9月30日 和所包含的三 和 九 結束於幾個月前 2024年9月30日 及 2023根據管理層的意見，基本報表會包括所有調整，包括正常經常性項目，以公正地呈現我們的財務狀況、營運成果和現金流量。 我們的營運結果為 三 和 九 結束於幾個月前 2024年9月30日並不一定代表本年度預期成果。 不 並不必然代表整年預期結果。我們的簡明綜合基本報表及相關附註截至及適用於 三 和 九 結束於幾個月前 2024年9月30日應根據相同基礎編製，並應與我們的年度報告適用的表格一同閱讀 10年終日期為 2023 年 12月 31日。 2024年6月30日、2023年12月31日截至，我們沒有任何合約資產。所有板塊所需的基本報表和腳註披露通常按照美國通用會計原則編製，其中的某些信息和腳註已根據證券交易委員會的規定進行簡化或省略。我們認為所做的披露足以保持所呈現的信息不會引導誤解。
在2023年2月1日，我們完成了能源業務的出售。我們確定能源業務的出售符合金融會計準則委員會(“FASB”)會計標準法典(“ASC”) 20，“已停用業務”的標準，因為它相對較小且具有戰略合理性。按照ASC 20的要求，所有期間的合併資產負債表、合併綜合損益表和合併財務報表附注均重構以反映能源業務的停止營運。除非另有說明，這些合併財務報表的附注中的討論僅與我們的持續業務有關。 2023年2月1日，我們完成了對我們的能源業務的出售。我們確定根據財務會計標準委員會（“FASB”）會計標準編碼（“ASC”）的規定，我們對能源業務的出售符合“停業營業”標準。 205-20, 在2062年第四季度開始，公司停用能源業務。 (ASC 205-20”由於其相對規模和戰略合理性。合並資產負債表、合並營運報表和合並財政報表附註已重新調整，在ASC所述的所有期限內以反映能源業務的停業。 205-20. 除非另有說明，本合並財務報表附註中的討論僅與我們的持續業務有關。
最近會計宣告
| 會計標準 | 描述 | 生效日期 | 對合併基本報表或其他重大事項的影響 |
| 分部報告（主題 280）在 在2023年12月15日之后開始的財政年度， 財務會計準則委員會發布了會計準則更新"ASU" 的修改主要是針對匯率調整和所得稅已付信息改進所得稅披露，以回應投資者對所得稅信息更多的透明度要求。 2023-07, 關於報告段披露的改進（「ASU 的修改主要是針對匯率調整和所得稅已付信息改進所得稅披露，以回應投資者對所得稅信息更多的透明度要求。 2023-07") | 此更新修改了報告段披露要求，要求加強揭示重要段成本的信息。要求公眾實體揭示定期提供給首席營運決策人的重要段成本，並披露報告的段利潤或虧損如何用於評估段表現和分配資源。 | ASU 的修改主要是針對匯率調整和所得稅已付信息改進所得稅披露，以回應投資者對所得稅信息更多的透明度要求。 2023-07 對於開始於其後的財政年度生效 提前採用是允許的。 和该之后的财务年度的中期在开始之后开始的财务年度， 2024年12月15日之後開始的上市公司財政年度。 可以允許早期採納。 | 預計採納這項指引 不 預計對我們的合併基本報表產生實質影響。我們計劃在我們 2024年12月31日 表格 10-K. |
| 所得稅（主題 740）在 2023年12月，FASB發布了《會計標準更新》ASU 財務會計準則委員會發布的會計準則更新"ASU" 的修改主要是針對匯率調整和所得稅已付信息改進所得稅披露，以回應投資者對所得稅信息更多的透明度要求。 2023-09, 稅收披露改進（ASU 的修改主要是針對匯率調整和所得稅已付信息改進所得稅披露，以回應投資者對所得稅信息更多的透明度要求。 2023-09) | ASU中的修正 的修改主要是針對匯率調整和所得稅已付信息改進所得稅披露，以回應投資者對所得稅信息更多的透明度要求。 2023-09 地址投資者對於更透明的所得稅相關資訊的要求，主要通過改進基於比率協調和已支付所得稅資訊的所得稅披露。此更新還包括某些其他修訂，以提高所得稅披露的效力。 | 對於開始於 2024年12月15日之後的財政年度的上市公司生效。 允許提前採納。 | 採納此指引的 不 對我們的基本報表沒有實質影響。 |
以下提供了根據服務類型和國家進行分解的收入。三 和 九 結束於幾個月前 2024年9月30日 及 2023. 沒有 美國以外的個人客戶或國家 佔我們綜合收入的更大比例 10.0% 或 更多三 和 九 結束於幾個月前 2024年9月30日 或 2023.
| 截至9月30日的三個月 | 截至9月30日的九個月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 保險： | ||||||||||||||||
| 承保 | $ | $ | $ | $ | ||||||||||||
| 索賠 | ||||||||||||||||
| 總收益 | $ | $ | $ | $ | ||||||||||||
| 截至九月三十日止三個月， | 截至九月三十日止九個月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 收入： | ||||||||||||||||
| 美国 | $ | $ | $ | $ | ||||||||||||
| 英国 | ||||||||||||||||
| 其他國家 | ||||||||||||||||
| 總收入 | $ | $ | $ | $ | ||||||||||||
C合同資產定義為實體在向客戶轉讓貨物或服務後，若該資產的權利取得是取決於除時間流逝以外的其他條件時，實體為之交換。至於 2024年9月30日 和 2024年6月30日、2023年12月31日截至，我們沒有任何合約資產。截至我們於該期結束的財務資料中，我們擁有
以下是合同負債變動摘要 2024年6月30日、2023年12月31日截至，我們沒有任何合約資產。 記錄2023年12月31日至2024年6月30日合同負債的變化摘要如下： 2024年9月30日:
| 2023年12月31日的合同負債 | $ | |||
| 合同負債的增加 | ||||
| 營業收入 | ( | ) | ||
| 外幣兌換調整 | ( | ) | ||
| 2024年9月30日的合同負債 | $ |
我們最重要的剩餘履約義務涉及向客戶提供使用和更新線上內容的權利，在剩餘的合約期限內。我們對履行履約義務的時間披露是基於與客戶的合約要求。然而，這些合約偶爾會受到修改，影響履行履約義務的時間。 可能 這些預計在一年內履行的履約義務，約占當 一年。 年餘額的
如果我們預期這些費用的效益將超過一年，我們會對與客戶簽訂合同的附加成本確認為資產。 一年。 年。截至 2024年9月30日 和 2024年6月30日、2023年12月31日截至，我們沒有任何合約資產。，我們推遲了
我們的附屬簡明合併資產負債表中報告了特定按公平價值計量的資產和負債。為增強按公平價值計量的資產和負債的一致性和可比性，ASC 820-10, 公允價值衡量設立了一個 三級別的公平價值層級以優先考量用於測量公平價值的估值技術的輸入。ASC 820-10 要求披露公司按照何種程度以公平價值計量資產和負債的方法和假設用於測量公平價值及公平價值計量對收入的影響。按照ASC 820-10, 我們應用了以下公平價值層級：
| 水平 1 - | 在積極交易所上交易的資產或負債，如公開交易的工具。 |
| 水平 2 - | 根據可觀察市場數據對類似工具進行估值的資產或負債。 |
| 水平 3 - | 對於存在顯著估值假設的資產或負債 不 在市場上容易觀察到的資產或負債； 基於最佳可用數據估值的工具，其中一些是內部開發的，並考慮市場參與者所需的風險溢價。 |
現金及現金等價物、應收賬款、應付賬款和應計負債的公允值近似其攜帶金額，因為這些工具的短期性質。及所擁有的股份數乘積，度量基準為公允值的等級資產。 1 $。
我們選擇 不 以公允價值記錄我們的長期債務。長期債務的攜帶金額代表攤銷成本，包括未攤銷的溢價，減去未攤銷的折扣和發行債務成本。我們根據我們可用的類似特徵的金融工具利率期貨估計、我們目前的信用評級和適用於我們的利差評估這些金融工具的公允價值。以下表格總結了這些金融工具的攜帶金額和估計公允價值截至 2024年9月30日 和 2024年6月30日、2023年12月31日截至，我們沒有任何合約資產。的這些金融工具的攜帶價值和估計公允價值:
| 2024年9月30日 | 2023年12月31日 | ||||||||||||||||
| 合理價值 | 攜帶 | 估價 | 攜帶 | 估價 | |||||||||||||
| 層級 | 價值 | 合理價值 | 價值 | 合理價值 | |||||||||||||
| 未按公允價值計量的金融工具： | |||||||||||||||||
| 債券（附註10） | 第二級 | $ | $ | $ | $ | ||||||||||||
截至 2024年9月30日 和 2024年6月30日、2023年12月31日截至，我們沒有任何合約資產。我們擁有的證券，無法輕易確定市值，價值分別為$。
我們為公司辦公室、數據中心和特定設備設有經營和金融租賃，按照ASC標準計算。 842, 租賃（"ASC 842").
以下表格呈現了用於財務租賃和營運租賃租賃負債測量中包含的合併租金成本和現金支付金額。 三 和 九 結束於幾個月前 2024年9月30日 及 2023的這些金融工具的攜帶價值和估計公允價值:
| 截至9月30日的三個月 | 截至9月30日的九個月 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 租賃成本： | ||||||||||||||||
| 經營租賃成本 (1) | $ | $ | $ | $ | ||||||||||||
| 次租收入 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 融資租賃成本： | ||||||||||||||||
| 財務租賃資產的折舊 (2) | ||||||||||||||||
| (3) | ||||||||||||||||
| 租賃成本總額 | $ | $ | $ | $ | ||||||||||||
| 其他資訊： | ||||||||||||||||
| 支付租賃負債的現金 | ||||||||||||||||
| 經營租賃的經營現金流出 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 自融資租賃的營運現金流出 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 自融資租賃的融資現金流出 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
_______________
(1) 計入我們附屬簡明綜合營業業績表中的「營業成本」和「銷售、一般及管理」費用。
(2) 包含在我們附屬簡明綜合損益表中的「固定資產折舊和攤提」項目中
(3) 包括在我們隨附的簡明綜合獲利及損失表中的「利息費用」
以下表格顯示截至目前的綜合財務和營運租賃的加權平均剩餘租賃期限和加權平均折扣率。 2024年9月30日 及 2023的這些金融工具的攜帶價值和估計公允價值:
| 九月三十日， | ||||||||
| 2024 | 2023 | |||||||
| 運營租賃的加權平均剩餘租賃期限（年） | ||||||||
| 金融租賃的加權平均剩餘租賃期限（年） | ||||||||
| 經營租賃加權平均貼現率 | % | % | ||||||
| 金融租賃的加權平均折扣率 | % | % | ||||||
我們的使用權（'ROU'）資產和租賃負債分別為$融資租賃，就
2024年7月31日，trane technologies plc發布新聞稿宣布其2024年第一季度的業績。 2024年8月16日， 我們提前脫離了澤西市辦公室。
剩餘期間內的租賃負債到期日為2024 和年份的租賃負債到期日為 2029及之後各年的租賃負債到期日如下：
| 2024年9月30日 | ||||||||
| 年終日期 | 營運租賃 | 財務租賃 | ||||||
| 2024 | $ | $ | ||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029年及之後 | ||||||||
| 租約支付總額 | ||||||||
| 减：利息費用 | ( | ) | ( | ) | ||||
| 總租金支付現值 | $ | $ | ||||||
2024收購
On 2024年1月8日，我們完成了對Rocket Enterprise Solutions GmbH（“Rocket”）的收購。
For the three and nine months ended September 30, 2024, we incurred transaction costs of $
Acquisition Escrows and Related Liabilities
Pursuant to the related acquisition agreements, we have funded various escrow accounts to satisfy pre-acquisition indemnity and tax claims arising subsequent to the applicable acquisition dates. At September 30, 2024 and December 31, 2023, the current portion of the escrows amounted to $
As of September 30, 2024, the acquisition of Krug Sachverständigen GmbH ('Krug'), Mavera Holding AB ('Mavera'), and Morning Data Limited ('Morning Data') included acquisition-related contingent payments, for which the sellers of these acquisitions could receive additional payments by achieving the specific predetermined revenue, EBITDA, and/or EBITDA margin earn-out targets for exceptional performance. We believe that the liabilities recorded as of September 30, 2024 and December 31, 2023 reflect the best estimate of acquisition-related contingent payments. The associated current portion of the contingent payments were $
7. Dispositions and Discontinued Operations:
On February 1, 2023, we completed the sale of our Energy business to Planet Jersey Buyer Ltd, an entity that was formed on behalf of, and is controlled by, The Veritas Capital Fund VIII, L.P. and its affiliated funds and entities (“Veritas Capital”), for a net cash sale price of $
The Energy business, which was part of our Energy and Specialized Markets segment, was classified as discontinued operations per ASC 205-20 as we determined, qualitatively and quantitatively, that this transaction represented a strategic shift that had a major effect on our operations and financial results. Accordingly, all results of the Energy business have been removed from continuing operations and presented as discontinued operations in our consolidated statements of operations for all periods presented. Additionally, all assets and liabilities of the Energy business were classified as assets and liabilities held for sale within our consolidated balance sheet as of December 31, 2022. In connection with the held for sale classification, we recognized an impairment of $
The following table presents the financial results from discontinued operations, net of income taxes in our consolidated statement of income for the periods indicated:
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenues (exclusive of items shown separately below) | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Depreciation and amortization of fixed assets | ||||||||||||||||
| Amortization of intangible assets | ||||||||||||||||
| Other operating loss, net | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ||||||||||||||
| Other expense: | ||||||||||||||||
| Investment loss and others, net | ( | ) | ||||||||||||||
| Loss from discontinued operations before income taxes | ( | ) | ||||||||||||||
| Income tax expense | ( | ) | ||||||||||||||
| Loss from discontinued operations | $ | $ | $ | $ | ( | ) | ||||||||||
The consolidated statements of cash flows have not been adjusted to separately disclose cash flows related to discontinued operations. The following table presents selected cash flow information associated with our discontinued operations:
| Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Significant non-cash operating activities: | ||||||||||||||||
| Depreciation and amortization of fixed assets | $ | $ | $ | $ | ||||||||||||
| Amortization of intangible assets | ||||||||||||||||
| Operating lease right-of-use assets, net | ||||||||||||||||
| Investing activities: | ||||||||||||||||
| Capital expenditures | ( | ) | ||||||||||||||
| Supplemental disclosures: | ||||||||||||||||
| Fixed assets included in accounts payable and accrued liabilities | ||||||||||||||||
8. Goodwill and Intangible Assets:
The following is a summary of the change in goodwill from December 31, 2023 through September 30, 2024, for our Insurance operating segment:
| Insurance | ||||
| Goodwill at December 31, 2023 | $ | |||
| Acquisitions(1) | ||||
| Purchase accounting reclassifications | ||||
| Foreign currency translation adjustment | ||||
| Goodwill at September 30, 2024 | $ | |||
_______________
(1) See Note 6. Acquisitions for more information.
Goodwill and intangible assets with indefinite lives are subject to impairment testing annually as of June 30, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. When evaluating goodwill for impairment, we may decide to first perform a qualitative assessment, or “Step Zero” impairment test, to determine whether it is more likely than not that impairment has occurred. The qualitative assessment includes a review of macroeconomic conditions, industry and market considerations, internal cost factors, and our own overall financial and share price performance, among other factors. If we do not perform a qualitative assessment, or if we determine that it is more likely than not that the carrying amounts of our reporting units exceeds their fair value, we perform a quantitative assessment and calculate the estimated fair value of the respective reporting unit. If the carrying amount of a reporting unit’s goodwill exceeds the fair value of that goodwill, an impairment loss is recognized. As of June 30, 2024, we completed our step zero impairment test at the reporting unit level and determined it was not more likely than not that the carrying values of our reporting units exceeded their fair values. We did not recognize any additional impairment charges related to our goodwill and indefinite-lived intangible assets. During the three months ended September 30, 2024, we continued to monitor these reporting units for events that would trigger an interim impairment test; we did not identify any such events.
Our intangible assets and related accumulated amortization consisted of the following:
| Weighted Average Useful Life (in years) | Cost | Accumulated Amortization | Net | |||||||||||||
| September 30, 2024 | ||||||||||||||||
| Technology-based | $ | $ | ( | ) | $ | |||||||||||
| Marketing-related | ( | ) | ||||||||||||||
| Contract-based | ( | ) | ||||||||||||||
| Customer-related | ( | ) | ||||||||||||||
| Database-based | ( | ) | ||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | |||||||||||
| December 31, 2023 | ||||||||||||||||
| Technology-based | $ | $ | ( | ) | $ | |||||||||||
| Marketing-related | ( | ) | ||||||||||||||
| Contract-based | ( | ) | ||||||||||||||
| Customer-related | ( | ) | ||||||||||||||
| Database-based | ( | ) | ||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | |||||||||||
Amortization expense related to intangible assets for the three months ended September 30, 2024 and 2023 was $
| Years Ending | Amount | |||
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 and thereafter | ||||
| Total | $ | |||
Our effective tax rate for the three and nine months ended September 30, 2024 was
A number of jurisdictions have begun to enact legislation to implement the Organization for Economic Co-operation and Development’s 15% global minimum tax regime with effect from January 1, 2024. These changes do not have a material impact on our condensed consolidated financial statements.
The following table presents short-term and long-term debt by issuance as of September 30, 2024 and December 31, 2023:
| Issuance Date | Maturity Date | 2024 | 2023 | |||||||
| Short-term debt and current portion of long-term debt: | ||||||||||
| Credit Facilities: | ||||||||||
| Syndicated revolving credit facility | Various | Various | $ | $ | ||||||
| Senior notes: | ||||||||||
| % senior notes, less unamortized discount and debt issuance costs of $() | 5/15/2015 | 6/15/2025 | ||||||||
| Finance lease liabilities (1) | Various | Various | ||||||||
| Short-term debt and current portion of long-term debt | ||||||||||
| Long-term debt: | ||||||||||
| Senior notes: | ||||||||||
| % senior notes, less unamortized discount and debt issuance costs of $() | 5/15/2015 | 6/15/2025 | ||||||||
| % senior notes, inclusive of unamortized premium, net of unamortized discount and debt issuance costs, of $ and $, respectively | 3/6/2019 | 3/15/2029 | ||||||||
| % senior notes, less unamortized discount and debt issuance costs of $() and $(), respectively | 5/15/2015 | 6/15/2045 | ||||||||
| % senior notes, less unamortized discount and debt issuance costs of $() and $(), respectively | 5/13/2020 | 5/15/2050 | ||||||||
| % senior notes, less unamortized discount and debt issuance costs of $() and $(), respectively | 3/3/2023 | 4/1/2033 | ||||||||
| % senior notes, less unamortized discount and debt issuance costs of $() | 6/5/2024 | 6/5/2034 | ||||||||
| Finance lease liabilities (1) | Various | Various | ||||||||
| Syndicated revolving credit facility debt issuance costs | Various | Various | ( | ) | ( | ) | ||||
| Long-term debt | ||||||||||
| Total debt | $ | $ | ||||||||
_______________
(1) Refer to Note 5. Leases
Senior Notes
As of September 30, 2024 and December 31, 2023, we had senior notes with an aggregate principal amount of $
On June 5, 2024, we completed an issuance of $
On June 7, 2024, we completed a cash tender offer for $
Credit Facilities
We have a syndicated revolving credit facility ("Syndicated Revolving Credit Facility") with a borrowing capacity of $
We have
We have
On February 14, 2024, April 24, 2024, and July 24, 2024, our Board approved a cash dividend of $
On October 23, 2024, our Board of Directors approved a cash dividend of cents per share of common stock issued and outstanding. The dividend is payable on December 31, 2024, to holders of record as of December 13, 2024.
Share Repurchase Program
In December 2023, March 2024, and June 2024, we entered into Accelerated Share Repurchase ("ASR") agreements (the "December 2023 ASR Agreement", "March 2024 ASR Agreement", and "June 2024 ASR Agreement") to repurchase shares of our common stock for an aggregate purchase price of $
In August 2024, we entered into an additional ASR agreement (the "August 2024 ASR Agreement") to repurchase shares of our common stock for an aggregate purchase price of $
We utilized cash received from operations for these repurchases. As of September 30, 2024, we had $
Through the third quarter of 2024, we recorded total excise tax of $
Treasury Stock
As of September 30, 2024, our treasury stock consisted of
Earnings Per Share
Basic EPS is computed by dividing net income attributable to Verisk by the weighted average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding, using the treasury stock method, if the dilutive potential common shares, including vested and nonvested stock options, nonvested restricted stock awards, nonvested restricted stock units, nonvested performance share units ("PSU"), and nonvested deferred stock units, had been issued.
The following is a presentation of the numerators and denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2024 and 2023:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Numerator used in basic and diluted EPS: | ||||||||||||||||
| Income from continuing operations | $ | $ | $ | $ | ||||||||||||
| Less: Net income attributable to noncontrolling interests | ||||||||||||||||
| Loss from discontinued operations, net of tax | ( | ) | ||||||||||||||
| Net income attributable to Verisk | $ | $ | $ | $ | ||||||||||||
| Denominator: | ||||||||||||||||
| Weighted average number of common shares used in basic EPS | ||||||||||||||||
| Effect of dilutive shares: | ||||||||||||||||
| Potential common shares issuable from stock options and stock awards | ||||||||||||||||
| Weighted average number of common shares and dilutive potential common shares used in diluted EPS | ||||||||||||||||
The potential shares of common stock that were excluded from diluted EPS were
Accumulated Other Comprehensive Income
The following is a summary of accumulated other comprehensive income as of September 30, 2024 and December 31, 2023:
| 2024 | 2023 | |||||||
| Foreign currency translation adjustment | $ | $ | ||||||
| Pension and postretirement adjustment, net of tax | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | $ | $ | ||||||
The before-tax and after-tax amounts of other comprehensive income (loss) income for the three and nine months ended September 30, 2024 and 2023 are summarized below:
| Before Tax | Tax (Expense) Benefit | After Tax | ||||||||||
| For the Three Months Ended September 30, 2024 | ||||||||||||
| Foreign currency translation adjustment attributable to Verisk | $ | $ | $ | |||||||||
| Foreign currency translation adjustment attributable to noncontrolling interests | ||||||||||||
| Foreign currency translation adjustment | ||||||||||||
| Pension and postretirement adjustment before reclassifications | ( | ) | ||||||||||
| Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1) | ( | ) | ( | ) | ||||||||
| Pension and postretirement adjustment | ( | ) | ||||||||||
| Total other comprehensive income | $ | $ | ( | ) | $ | |||||||
| For the Three Months Ended September 30, 2023 | ||||||||||||
| Foreign currency translation adjustment attributable to Verisk | $ | ( | ) | $ | $ | ( | ) | |||||
| Foreign currency translation adjustment attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||
| Pension and postretirement adjustment before reclassifications | ( | ) | ||||||||||
| Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1) | ( | ) | ( | ) | ||||||||
| Pension and postretirement adjustment | ( | ) | ||||||||||
| Total other comprehensive income | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Before Tax | Tax (Expense) Benefit | After Tax | ||||||||||
| For the Nine Months Ended September 30, 2024 | ||||||||||||
| Foreign currency translation adjustment attributable to Verisk | $ | $ | $ | |||||||||
| Foreign currency translation adjustment attributable to noncontrolling interests | ||||||||||||
| Foreign currency translation adjustment | ||||||||||||
| Pension and postretirement adjustment before reclassifications | ( | ) | ||||||||||
| Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1) | ( | ) | ( | ) | ||||||||
| Pension and postretirement adjustment | ( | ) | ||||||||||
| Total other comprehensive income | $ | $ | ( | ) | $ | |||||||
| For the Nine Months Ended September 30, 2023 | ||||||||||||
| Foreign currency translation adjustment attributable to Verisk | $ | $ | $ | |||||||||
| Foreign currency translation adjustment attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||
| Cumulative translation adjustment recognized upon deconsolidation of the Energy business | ||||||||||||
| Foreign currency translation adjustment | ||||||||||||
| Pension and postretirement adjustment before reclassifications | ( | ) | ||||||||||
| Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1) | ( | ) | ( | ) | ||||||||
| Pension and postretirement adjustment | ( | ) | ||||||||||
| Total other comprehensive income | $ | $ | ( | ) | $ | |||||||
___________
| (1) | These accumulated other comprehensive loss components, before tax, are included under "Cost of revenues" and "Selling, general and administrative" in our accompanying condensed consolidated statements of operations. These components are also included in the computation of net periodic (benefit) cost (see Note 13. Pension and Postretirement Benefits for additional details). |
12. Equity Compensation Plans:
All of our outstanding stock options, restricted stock awards, deferred stock units, and PSUs are covered under our 2021 Incentive Plan or our 2013 Incentive Plan. Awards under our 2021 Incentive Plan may include one or more of the following types: (i) stock options (both nonqualified and incentive stock options), (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) performance awards, (vi) other share-based awards, and (vii) cash. Employees, non-employee directors, and consultants are eligible for awards under our 2021 Incentive Plan. We transferred common stock under these plans from our treasury shares. As of September 30, 2024, there were
We grant equity awards to our key employees. The nonqualified stock options have an exercise price equal to the adjusted closing price of our common stock on the grant date, with a -year contractual term. The fair value of the restricted stock is determined using the closing price of our common stock on the grant date. The restricted stock is not assignable or transferable until it becomes vested. PSUs vest at the end of a -year performance period, subject to the recipient’s continued service. Each PSU represents the right to receive share of our common stock and the ultimate realization is based on our achievement of certain market and financial performance criteria and may range from
In January 2024, we granted
A summary of the status of the stock options, restricted stock, and PSUs awarded under our 2021 and 2013 Incentive Plans as of December 31, 2023 and September 30, 2024 and changes during the interim period are presented below:
| Stock Option | Restricted Stock | PSU | ||||||||||||||||||||||||||
| Number of Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value | Number of Shares | Weighted Average Grant Date Fair Value Per Share | Number of Shares | Weighted Average Grant Date Fair Value Per Share | ||||||||||||||||||||||
| Outstanding at December 31, 2023 | $ | $ | $ | $ | ||||||||||||||||||||||||
| Granted | $ | $ | $ | |||||||||||||||||||||||||
| Dividend reinvestment | $ | $ | N/A | |||||||||||||||||||||||||
| Exercised or lapsed | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | 210.07 | |||||||||||||||||
| Canceled, expired or forfeited | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Outstanding at September 30, 2024 | $ | $ | $ | $ | ||||||||||||||||||||||||
| Exercisable at September 30, 2024 | $ | $ | ||||||||||||||||||||||||||
| Exercisable at December 31, 2023 | $ | $ | ||||||||||||||||||||||||||
| Nonvested at September 30, 2024 | ||||||||||||||||||||||||||||
| Expected to vest at September 30, 2024 | (1) | |||||||||||||||||||||||||||
| (1) | Includes estimated performance achievement |
The fair value of the stock options granted was estimated using a Black-Scholes valuation model that uses the weighted average assumptions noted in the following table for the nine months ended September 30, 2024 and 2023:
| 2024 | 2023 | |||||||
| Option pricing model | Black-Scholes | Black-Scholes | ||||||
| Weighted average grant price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free interest rate | % | % | ||||||
| Expected term in years | ||||||||
| Dividend yield | % | % | ||||||
| Weighted average grant date fair value per stock option | $ | $ | ||||||
The expected term for the stock options granted was estimated based on studies of historical experience and projected exercise behavior. However, for certain awards granted, for which no historical exercise pattern exists, the expected term was estimated using the simplified method. The risk-free interest rate is based on the yield of U.S. Treasury zero coupon securities with a maturity equal to the expected term of the equity award. The volatility factor is calculated using historical daily closing prices over the most recent period commensurate with the expected term of the stock option awards. The expected dividend yield was based on our expected annual dividend rate on the date of grant.
Intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the adjusted closing price of our common stock as of the reporting date. Excess tax benefits from stock-based compensation were recorded as income tax benefit in our condensed consolidated statements of operations. This tax benefit is calculated as the excess of the intrinsic value of options exercised and restricted stock lapsed in excess of compensation recognized for financial reporting purposes. The weighted average remaining contractual terms were
For the nine months ended September 30, 2024, there was $
Our U.K. Sharesave Plan offers qualifying employees in the United Kingdom the opportunity to own shares of our common stock. Employees who elect to participate are granted stock options, of which the exercise price is equal to the average of the closing price on the five trading days immediately preceding the plan invitation date discounted by
Our ESPP offers eligible employees the opportunity to purchase shares of our common stock at a discount of its fair market value at the time of purchase. During the nine months ended September 30, 2024 and 2023, we issued
13. Pension and Postretirement Benefits:
We maintain a frozen qualified defined benefit pension plan for certain employees through membership in our Pension Plan for Insurance Organizations (the "Pension Plan"), a multiple-employer trust. We also apply a cash balance formula to determine future benefits. Under the cash balance formula, each participant has an account, which is credited annually based on the interest earned on the previous year-end cash balance. We also have a frozen non-qualified supplemental cash balance plan ("SERP") for certain employees. The SERP is funded from our general assets. During the first quarter of 2024 and as of December 31, 2023, the investment guidelines on our Pension Plan assets targeted an investment allocation of
The components of net periodic (benefit) cost for the three and nine months ended September 30, 2024 and 2023 are summarized below:
| Pension Plan and SERP | Postretirement Plan | |||||||||||||||
| For the Three Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Interest cost | $ | $ | $ | $ | ||||||||||||
| Expected return on plan assets | ( | ) | ( | ) | ||||||||||||
| Amortization of prior service cost | ||||||||||||||||
| Amortization of net actuarial loss | ||||||||||||||||
| Net periodic (benefit) cost | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
| Employer contributions, net | $ | $ | $ | $ | ||||||||||||
| Pension Plan and SERP | Postretirement Plan | |||||||||||||||
| For the Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Interest cost | $ | $ | $ | $ | ||||||||||||
| Expected return on plan assets | ( | ) | ( | ) | ( | ) | ||||||||||
| Amortization of prior service cost | ||||||||||||||||
| Amortization of net actuarial loss | ||||||||||||||||
| Net periodic (benefit) cost | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
| Employer contributions, net | $ | $ | $ | $ | ||||||||||||
The expected contributions to the Pension Plan, SERP, and Postretirement Plan for the year ending December 31, 2024 are consistent with the amounts previously disclosed as of December 31, 2023.
ASC 280-10, Disclosures About Segments of an Enterprise and Related Information (“ASC 280-10”), establishes standards for reporting information about operating segments. ASC 280-10 requires that a public business enterprise reports financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our President and Chief Executive Officer ("CEO") is identified as the CODM as defined by ASC 280-10.
Each of the reportable segments, Insurance, and Energy and Specialized Markets, has a portion of its revenue from more than one of the three revenue types described within our revenue recognition policy. Below is the overview of the solutions offered within each reportable segment.
Insurance: We are the leading provider of statistical, actuarial, and underwriting data for the U.S. P&C insurance industry. Our databases include cleansed and standardized records describing premiums and losses in insurance transactions, casualty and property risk attributes for commercial buildings and their occupants, and fire suppression capabilities of municipalities. We use this data to create policy language and proprietary risk classifications that are industry standards and to generate prospective loss cost estimates used to price insurance policies, which are accessed via a hosted platform. We also develop solutions that our customers use to analyze key processes in managing risk. Our combination of algorithms and analytic methods incorporates our proprietary data to generate solutions. We also help businesses and governments better anticipate and manage climate and weather-related risks. In most cases, our customers integrate the solutions into their models, formulas, or underwriting criteria in order to predict potential loss events, ranging from hurricanes to earthquakes. We develop catastrophe and extreme event models and offer solutions covering natural and man-made risks, including acts of terrorism. We further develop solutions that allow customers to quantify costs after loss events occur. Our multitier, multispectral terrestrial imagery and data acquisition, processing, analytics, and distribution system using the remote sensing and machine learning technologies help gather, store, process, and deliver geographic and spatially referenced information that supports uses in many markets. Additionally, we offer fraud-detection solutions including review of data on claim histories, analysis of claims to find emerging patterns of fraud, and identification of suspicious claims in the insurance sector. Our underwriting, insurance anti-fraud claims, catastrophe modeling, and loss quantification solutions are included in this segment.
Energy and Specialized Markets: On February 1, 2023, we completed the sale of our Energy segment. We determined that the transaction met the criteria to be classified as discontinued operations. As a result, the financial operations of Energy are excluded from the segment disclosure. See Note 7. Dispositions and Discontinued Operations for further discussion. Prior to the sale, we were a leading provider of data analytics via hosted platform for the global energy, chemicals, and metals and mining industries. Our research and consulting solutions focused on exploration strategies and screening, asset development and acquisition, commodity markets, and corporate analysis in the areas of business environment, business improvement, business strategies, commercial advisory, and transaction support. We gathered and managed proprietary information, insight, and analysis on oil and gas fields, mines, refineries, and other assets across the interconnected global energy sectors to advise customers in making asset investment and portfolio allocation decisions. Our analytical tools measured and observed environmental properties and translated those measurements into actionable information based on customer needs. In addition, we provided market and cost intelligence to energy companies to optimize financial results.
As of February 1, 2023, we have determined that we have one operating segment and one reportable segment, Insurance, on a prospective basis. The segment is based on financial information that is utilized by the Company’s CODM, who is the Company’s CEO, to assess performance and allocate resources on a consolidated basis. We have included the results of our disposed of segments below for comparability purposes. We use EBITDA as the profitability measure for making decisions regarding ongoing operations. EBITDA is net income before interest expense, provision for income taxes, depreciation and amortization of fixed and intangible assets. EBITDA is the measure of operating results used to assess corporate performance and optimal utilization of debt and acquisitions. Operating expenses consist of direct and indirect costs principally related to personnel, facilities, software license fees, consulting, travel, and third-party information services. We do not allocate interest expense and provision for income taxes, since these items are not considered in evaluating the segment’s overall operating performance. In addition, our CODM does not evaluate the financial performance of each segment based on assets. See Note 3. Revenues for information on disaggregated revenues by type of service and by country.
The following tables provide our revenue and EBITDA by reportable segment for the three and nine months ended September 30, 2024 and 2023, and the reconciliation of EBITDA to income before income taxes as shown in our accompanying condensed consolidated statements of operations:
| For the Three Months Ended | ||||||||||||||||
| September 30, 2024 | September 30, 2023 | |||||||||||||||
| Insurance | Total | Insurance | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Expenses: | ||||||||||||||||
| Cost of revenues (exclusive of items shown separately below) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Selling, general and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Investment gain (loss) | ( | ) | ( | ) | ||||||||||||
| EBITDA | $ | $ | $ | $ | ||||||||||||
| Depreciation and amortization of fixed assets | ( | ) | ( | ) | ||||||||||||
| Amortization of intangible assets | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Income before income taxes | $ | $ | ||||||||||||||
| For the Nine Months Ended | ||||||||||||||||
| September 30, 2024 | September 30, 2023 | |||||||||||||||
| Insurance | Total | Insurance | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Expenses: | ||||||||||||||||
| Cost of revenues (exclusive of items shown separately below) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Selling, general and administrative | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net gain on the early extinguishment of debt | ||||||||||||||||
| Investment gain (loss) | ( | ) | ( | ) | ||||||||||||
| EBITDA | $ | $ | $ | |||||||||||||
| Depreciation and amortization of fixed assets | ( | ) | ( | ) | ||||||||||||
| Amortization of intangible assets | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Income before income taxes | $ | $ | ||||||||||||||
Long-lived assets by country are provided below:
| September 30, 2024 | December 31, 2023 | |||||||
| Long-lived assets: | ||||||||
| U.S. | $ | $ | ||||||
| U.K. | ||||||||
| Other countries | ||||||||
| Total long-lived assets | $ | $ | ||||||
We consider our stockholders that own more than 5.0% of the outstanding stock within the class to be related parties as defined within ASC 850, Related Party Disclosures. For the nine months ended September 30, 2024 and 2023, we had
16. Commitments and Contingencies:
We are a party to legal proceedings, investigations, examinations, subpoenas, third party requests, government requests, regulatory proceedings and other claims with respect to a variety of matters in the ordinary course of business, including the matters described below (collectively, “Ongoing Matters”). With respect to Ongoing Matters, we are unable, at the present time, to determine the ultimate resolution of or provide a reasonable estimate of the range of possible loss attributable to Ongoing Matters or the impact these matters may have on our results of operations, financial position, or cash flows. Although we believe we have strong defenses and have appealed adverse rulings to us, we could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations, financial position, or cash flows.
Telematics Litigation
As of April 19, 2024, various Plaintiffs filed a total of 20 separate putative class action lawsuits, sixteen against General Motors LLC (“GM”), OnStar LLC (“OnStar”), LexisNexis Risk Solutions, Inc. (“LexisNexis”) and Verisk in the United States District Courts for the Northern District of Georgia, the Eastern District of Michigan, Central District of California, District of New Jersey, Southern District of New York, Northern District of Alabama, Northern District of Illinois and District of South Carolina, and four against Hyundai Motor America (“Hyundai”) and Verisk in the Central District of California and District of New Jersey, three of which have been dismissed to date. The Complaints generally allege that the auto manufacturer Defendants collected consumers’ driver behavior data through vehicle software, transmitted it to LexisNexis and Verisk, and that LexisNexis and Verisk shared the data with auto insurance companies, without the individuals’ knowledge or consent. Plaintiffs seek certification of both nationwide classes of individuals and subclasses of various state residents who had their vehicle’s driving data collected by Defendants and shared with a third party without their consent. The Plaintiffs also seek actual, statutory and punitive damages, injunctive relief, as well as reasonable attorney’s fees and other costs. On June 7, the Judicial Panel on Multidistrict Litigation transferred all GM-related lawsuits to the U.S. District Court for the Northern District of Georgia (In Re: Consumer Vehicle Driving Data Tracking Litigation, MDL Case No. 1:24-md-03115-TWT). All discovery proceedings have been stayed. At this time, it is not possible to reasonably estimate the liability related to these matters, as they are still in their early stages.
Indemnification Claim
In December 2023, we received a Notice of Indemnification claim from the current owner of our former healthcare data analytics subsidiary, which was divested in 2016, relating to an ongoing tax investigation by the Nepalese tax authorities. Pursuant to the 2016 sale agreement, we are subject to indemnification obligations with respect to certain pre-closing tax liabilities of the divested entity. At this time, it is not possible to reasonably estimate the liability related to this matter, as it is still in its early stages.
Commercial Litigation
On February 12, 2024, Plaintiffs filed a lawsuit, DDS Striker Holdings LLC and Data Driven Holdings LLC against Verisk Analytics, Inc. and Insurance Service Office, in the Superior Court of Delaware, Case No. N24C-02-130 VLM CCLD. Plaintiffs allege claims for breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent inducement, common law fraud, and civil conspiracy in connection with their inability to meet the post-closing earn-out targets negotiated as part of our acquisition of Data Driven Safety, LLC. Plaintiffs seek rescissory, out-of-pocket and punitive damages, as well as attorney’s fees, costs and other expenses. We filed a motion to dismiss Plaintiffs’ claims, which was fully briefed as of June 21, 2024, and was partially denied on August 29, 2024. At this time, it is not possible to reasonably estimate the liability related to this matter, as the case is still in its early stages.
Data Privacy Litigation
On or about February 8, 2023, Plaintiffs filed a lawsuit, Atlas Data Privacy Corp., et al. v. Verisk Analytics, Inc., et al., in the Superior Court of New Jersey, Middlesex County, Case No. MID-L-000903-24, alleging violations of Daniel’s Law. Atlas claims to be an “assignee” of claims of approximately 19,640 individuals who are “covered persons” under Daniel’s Law, allegedly enacted to provide judicial and law enforcement officers and their family members with the right to prevent disclosure of their personal information and to enforce those rights against uncooperative data brokers. It is alleged that Defendants have violated Daniel’s Law by failing to respond and comply with their written request to Defendants to cease publicly disclosing or re-disclosing their protected information. Plaintiffs seek actual damages in the amount of $
On January 30, 2023, Plaintiffs Justin Ahringer and Michael Donner filed a putative class action lawsuit in the United States District Court, Central District of California, titled Ahringer et al. v. LoanDepot, Inc. and Verisk Analytics, Inc. d/b/a Jornaya, Case No.: 8:23-cv-00186. Plaintiffs assert violations of California’s Invasion of Privacy Act, Unfair Competition Law, and a violation of class members’ privacy rights under the California Constitution. Plaintiffs allege that the Defendants recorded visitors’ electronic communications without their consent. Plaintiffs seek to certify a nationwide class of individuals who visited LoanDepot.com and provided personal information on the website’s forms to receive a quote or apply for a loan. They allege that the aggregate claims of all members of the proposed class exceeds $
On June 27, 2022, Plaintiff Loretta Williams brought a putative class action against Lead Intelligence, Inc. d/b/a Jornaya (“we,” “our,” or “us”) in the United States District Court for the Northern District of California, titled Williams v. DDR Media, LLC and Lead Intelligence, Inc. d/b/a Jornaya, Civil Action No. 3:22-cv-03789. The Complaint alleges that the Defendants violated the California Invasion of Privacy Act, Cal. Penal Code 631 (“CIPA”) and invaded Plaintiff’s and class members’ privacy rights when Defendants purportedly recorded visitors’ visits to the scrappyrent2own.com website without prior express consent. It is further alleged that this conduct constitutes a violation of the California Unfair Competition Law, Cal. Bus. Prof. Code Section 17200 et seq. and the California Constitution. The Complaint seeks class certification, injunctive relief, statutory damages in the amount of $
On December 15, 2021, Plaintiff Jillian Cantinieri brought a putative class action against Verisk Analytics, Insurance Services Office and ISO Claims Services, Inc. (“we,” “our,” or “us”) in the United States District Court for the Eastern District of New York, titled Cantinieri v. Verisk Analytics Inc., et al., Civil Action No. 2:21-cv-6911. The Complaint alleges that we failed to safeguard the personally identifiable information (PII) of Plaintiff and the members of the proposed classes from a purported breach of our databases by unauthorized entities. Plaintiff and class members allege actual and imminent injuries, including theft of their PII, fraudulent activity on their financial accounts, lowered credit scores, and costs associated with detection and prevention of identity theft and fraud. They seek to recover compensatory, statutory and punitive damages, disgorgement of earnings and profits, and attorney’s fees and costs. We filed our motion to dismiss Plaintiff’s claims on April 22, 2022. On March 30, 2023, the court denied our motion to dismiss without prejudice, allowing us an opportunity to re-file the motion once limited jurisdictional discovery has been completed. Our renewed motion to dismiss was fully briefed on February 16, 2024. At this time, it is not possible to reasonably estimate the liability related to this matter, as the case is still in its early stages.
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The following discussion should be read in conjunction with our historical financial statements and the related notes included in our annual report on Form 10-K ("2023 10-K") dated and filed with the Securities and Exchange Commission on February 21, 2024. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in or implied by any of the forward-looking statements as a result of various factors, including but not limited to those listed under "Risk Factors" and "Special Note Regarding Forward Looking Statements" in our 2023 Form 10-K and those listed under Item 1A in Part II of this quarterly report on Form 10-Q.
We are a leading data analytics provider serving clients in the insurance markets. Using advanced technologies to collect and analyze billions of records, we draw on unique data assets and deep domain expertise to provide innovations that may be integrated into client workflows. We offer predictive analytics and decision support solutions to clients in rating, underwriting, claims, catastrophe and weather risk, global risk analytics, and many other fields. In the U.S., and around the world, we help clients protect people, property, and financial assets.
Our clients use our solutions to make better decisions about risk and opportunities with greater efficiency and discipline. We refer to these products and services as “solutions” due to the integration among our services and the flexibility that enables our clients to purchase components or the comprehensive package. These solutions take various forms, including data, statistical models, or tailored analytics, all designed to allow our clients to make more logical decisions. We believe our solutions for analyzing risk positively impact our clients’ revenues and help them better manage their costs.
On February 1, 2023, we completed the sale of our Energy business. The Energy business was classified as discontinued operations per the guidance in ASC 205-20 in the fourth quarter of 2022, as we determined that this transaction represented a strategic shift that had a major effect on our operations and financial results. Accordingly, all results of the Energy business have been removed from continuing operations and presented as discontinued operations in our consolidated statements of operations and assets and liabilities held for sale for all periods presented. See Note 7. Dispositions and Discontinued Operations for further discussion.
Executive Summary
Key Performance Metrics
Revenue growth. We use year-over-year revenue growth as a key performance metric. We assess revenue growth based on our ability to generate increased revenue through increased sales to existing customers, sales to new customers, sales of new or expanded solutions to existing and new customers, and strategic acquisitions of new businesses.
We use year-over-year EBITDA growth as metrics to measure our performance. EBITDA and EBITDA margin are non-GAAP financial measures. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization of fixed and intangible assets. We calculate EBITDA margin as EBITDA divided by revenues. The respective nearest applicable GAAP financial measures are net income and net income margin. Although EBITDA is a non-GAAP financial measure, EBITDA is frequently used by securities analysts, lenders, and others in their evaluation of companies; EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for an analysis of our operating income, net income, or cash flow from operating activities reported under GAAP. Management uses EBITDA and EBITDA margin in conjunction with traditional GAAP operating performance measures as part of its overall assessment company performance. We believe these measures are useful and meaningful because they help us allocate resources, make business decisions, allow for greater transparency regarding our operating performance, and facilitate period-to-period comparisons. Some of these limitations involved in the use of EBITDA are:
• EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments.
• EBITDA does not reflect changes in, or cash requirements for, our working capital needs.
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future and EBITDA does not reflect any cash requirements for such replacements.
• Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.
EBITDA growth. We use EBITDA growth as a measure of our ability to balance the size of revenue growth with cost management and investing for future growth. EBITDA growth allows for greater transparency regarding our operating performance and facilitate period-to-period comparison.
EBITDA margin. We use EBITDA margin as a performance measure to assess segment performance and scalability of our business. We assess EBITDA margin based on our ability to increase revenues while controlling expense growth.
Revenues
We earn revenues through agreements for hosted subscriptions, advisory/consulting services, and for transactional solutions, recurring and non-recurring. Subscriptions for our solutions are generally paid in advance of rendering services either quarterly or in full upon commencement of the subscription period, which is usually for one year and automatically renewed each year. As a result, the timing of our cash flows generally precedes our recognition of revenues and income and our cash flow from operations tends to be higher in the first quarter as we receive subscription payments. Examples of these arrangements include subscriptions that allow our customers to access our standardized coverage language, our claims fraud database, or our actuarial services throughout the subscription period. In general, we experience minimal revenue seasonality within the business. For the nine months ended September 30, 2024 and 2023, approximately 81% and 80% of our insurance revenues were derived from hosted subscriptions through agreements (generally one to five years) for our solutions, respectively.
We also provide advisory/consulting services, which help our customers get more value out of our analytics and their subscriptions. In addition, certain of our solutions are paid for by our customers on a transactional basis, recurring and non-recurring. For example, we have solutions that allow our customers to access property-specific rating and underwriting information to price a policy on a commercial building, or compare a P&C insurance or a workers' compensation claim with information in our databases, or use our repair cost estimation solutions on a case-by-case basis. For the nine months ended September 30, 2024 and 2023, approximately 19% and 20% of our insurance revenues were derived from providing transactional and advisory/consulting solutions, respectively.
Operating Costs and Expenses
Personnel expenses are the major component of both our cost of revenues and selling, general and administrative expenses. Personnel expenses, which represented approximately 57% and 59% of our total operating expenses (excluding gains/losses related to dispositions) for the nine months ended September 30, 2024 and 2023, respectively, include salaries, benefits, incentive compensation, equity compensation costs, sales commissions, employment taxes, recruiting costs, and outsourced temporary agency costs.
We assign personnel expenses between two categories, cost of revenues and selling, general and administrative expense, based on the actual costs associated with each employee. We categorize employees who maintain our solutions as cost of revenues, and all other personnel, including executive managers, salespeople, marketing, business development, finance, legal, human resources, and administrative services, as selling, general and administrative expenses. A significant portion of our other operating costs, such as facilities and communications, is also either captured within cost of revenues or selling, general and administrative expenses based on the nature of the work being performed.
While we expect to grow our headcount over time to take advantage of our market opportunities, we believe that the economies of scale in our operating model will allow us to grow our personnel expenses at a lower rate than revenues. Historically, our EBITDA margin has improved because we have been able to increase revenues without a proportionate corresponding increase in expenses. However, part of our corporate strategy is to invest in new solutions and new businesses, which may offset margin expansion.
Cost of Revenues. Our cost of revenues consists primarily of personnel expenses. Cost of revenues also includes the expenses associated with the acquisition, disposition and verification of data, the maintenance of our existing solutions, and the development and enhancement of our next-generation solutions. Our cost of revenues excludes depreciation and amortization.
Selling, General and Administrative Expenses. Our selling, general and administrative expenses consist primarily of personnel costs. A portion of the other costs such as facilities, insurance, and communications are also allocated to selling, general and administrative expenses based on the nature of the work being performed by the employee. Our selling, general and administrative expenses exclude depreciation and amortization.
Condensed Consolidated Results of Operations
| Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||
| September 30, |
Percentage |
September 30, |
Percentage |
|||||||||||||||||||||
| 2024 |
2023 |
Change |
2024 |
2023 |
Change |
|||||||||||||||||||
| (in millions, except for share and per share data) |
||||||||||||||||||||||||
| Statement of income data: |
||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| Insurance |
$ | 725.3 | $ | 677.6 | 7.0 | % | $ | 2,146.1 | $ | 2,004.2 | 7.1 | % | ||||||||||||
| Operating expenses: |
||||||||||||||||||||||||
| Cost of revenues (exclusive of items shown separately below) |
223.4 | 217.2 | 2.9 | % | 670.6 | 650.3 | 3.1 | % | ||||||||||||||||
| Selling, general and administrative |
114.0 | 111.6 | 2.2 | % | 308.4 | 277.4 | 11.2 | % | ||||||||||||||||
| Depreciation and amortization of fixed assets |
58.1 | 48.1 | 20.8 | % | 174.5 | 139.2 | 25.4 | % | ||||||||||||||||
| Amortization of intangible assets |
18.3 | 19.6 | (6.6 | )% | 55.0 | 56.1 | (2.0 | )% | ||||||||||||||||
| Total operating expenses, net |
413.8 | 396.5 | 4.4 | % | 1,208.5 | 1,123.0 | 7.6 | % | ||||||||||||||||
| Operating income |
311.5 | 281.1 | 10.8 | % | 937.6 | 881.2 | 6.4 | % | ||||||||||||||||
| Other income (expense): |
||||||||||||||||||||||||
| Net gain on early extinguishment of debt |
— | — | — | % | 3.6 | — | 100.0 | % | ||||||||||||||||
| Investment gain (loss) |
5.9 | (2.0 | ) | 395.0 | % | 102.4 | (9.3 | ) | 1,201.1 | % | ||||||||||||||
| Interest expense, net |
(32.1 | ) | (29.4 | ) | 9.2 | % | (90.1 | ) | (87.4 | ) | 3.1 | % | ||||||||||||
| Total other (expense) income, net |
(26.2 | ) | (31.4 | ) | (16.6 | )% | 15.9 | (96.7 | ) | (116.4 | )% | |||||||||||||
| Income from continuing operations before income taxes |
285.3 | 249.7 | 14.3 | % | 953.5 | 784.5 | 21.5 | % | ||||||||||||||||
| Provision for income taxes |
(65.3 | ) | (62.3 | ) | 4.8 | % | (206.3 | ) | (198.4 | ) | 4.0 | % | ||||||||||||
| Income from continuing operations |
220.0 | 187.4 | 17.4 | % | 747.2 | 586.1 | 27.5 | % | ||||||||||||||||
| Loss from discontinued operations net of tax expense of $0.0, $0.0, $0.0, and $0.2, respectively (Note 7) |
— | — | — | % | — | (145.5 | ) | (100.0 | )% | |||||||||||||||
| Net income |
220.0 | 187.4 | 17.4 | % | 747.2 | 440.6 | 69.6 | % | ||||||||||||||||
| Less: Net loss attributable to noncontrolling interests |
0.1 | — | — | % | 0.6 | — | — | % | ||||||||||||||||
| Net income attributable to Verisk |
$ | 220.1 | $ | 187.4 | 17.4 | % | $ | 747.8 | $ | 440.6 | 69.7 | % | ||||||||||||
| Basic net income per share attributable to Verisk: |
||||||||||||||||||||||||
| Income from continuing operations |
$ | 1.55 | $ | 1.29 | 20.2 | % | $ | 5.24 | $ | 3.98 | 31.7 | % | ||||||||||||
| Loss from discontinued operations |
— | — | — | % | — | (0.99 | ) | (100.0 | )% | |||||||||||||||
| Basic net income per share attributable to Verisk: |
$ | 1.55 | $ | 1.29 | 20.2 | % | $ | 5.24 | $ | 2.99 | 75.3 | % | ||||||||||||
| Diluted net income per share attributable to Verisk: |
||||||||||||||||||||||||
| Income from continuing operations |
$ | 1.54 | $ | 1.29 | 19.4 | % | $ | 5.22 | $ | 3.96 | 31.8 | % | ||||||||||||
| Loss income from discontinued operations |
- | - | — | % | $ | — | $ | (0.98 | ) | (100.0 | )% | |||||||||||||
| Diluted net income per share attributable to Verisk: |
$ | 1.54 | $ | 1.29 | 19.4 | % | $ | 5.22 | $ | 2.98 | 75.2 | % | ||||||||||||
| Cash dividends declared per share (1): |
$ | 0.39 | $ | 0.34 | 14.7 | % | $ | 1.17 | $ | 1.02 | 14.7 | % | ||||||||||||
| Weighted average shares outstanding: |
||||||||||||||||||||||||
| Basic |
141,778,551 | 145,011,020 | (2.2 | )% | 142,594,074 | 147,292,590 | (3.2 | )% | ||||||||||||||||
| Diluted |
142,511,476 | 145,742,519 | (2.2 | )% | 143,259,411 | 147,983,986 | (3.2 | )% | ||||||||||||||||
| The financial operating data below sets forth the information we believe is useful for investors in evaluating our overall financial performance: |
||||||||||||||||||||||||
| Other data: |
||||||||||||||||||||||||
| EBITDA(2) |
$ | 393.8 | $ | 346.8 | 13.6 | % | $ | 1,273.1 | $ | 1,067.2 | 19.3 | % | ||||||||||||
| The following is a reconciliation of net income to EBITDA: |
||||||||||||||||||||||||
| Net income |
$ | 220.0 | $ | 187.4 | 17.4 | % | $ | 747.2 | $ | 440.6 | 69.6 | % | ||||||||||||
| Less: Loss from discontinued operations |
— | — | — | % | — | 145.5 | (100.0 | )% | ||||||||||||||||
| Income from continuing operations |
220.0 | 187.4 | 17.4 | % | 747.2 | 586.1 | 27.5 | % | ||||||||||||||||
| Depreciation and amortization of fixed assets and intangible assets |
76.4 | 67.7 | 12.9 | % | 229.5 | 195.3 | 17.5 | % | ||||||||||||||||
| Interest expense |
32.1 | 29.4 | 9.2 | % | 90.1 | 87.4 | 3.1 | % | ||||||||||||||||
| Provision for income taxes |
65.3 | 62.3 | 4.8 | % | 206.3 | 198.4 | 4.0 | % | ||||||||||||||||
| EBITDA |
$ | 393.8 | $ | 346.8 | 13.6 | % | $ | 1,273.1 | $ | 1,067.2 | 19.3 | % | ||||||||||||
| (1) |
Cash dividends declared per share is calculated by the aggregate cash dividends declared in a fiscal quarter divided by the shares issued and outstanding. See Note 11. of our condensed consolidated financial statements included in this interim report on Form 10-Q. |
| (2) | EBITDA is a financial measure that management uses to evaluate the performance of our segments. "EBITDA" is defined as net income before interest expense, provision for income taxes, and depreciation and amortization of fixed and intangible assets. See Note 14. of our condensed consolidated financial statements included in this quarterly report on Form 10-Q.
Although EBITDA is a non-GAAP financial measure, EBITDA is frequently used by securities analysts, lenders, and others in their evaluation of companies. EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for an analysis of our operating income, net income, or cash flows from operating activities reported under GAAP. Management uses EBITDA in conjunction with GAAP operating performance measures as part of its overall assessment of company performance. Some of these limitations are: |
| • |
EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; |
| • |
EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
| • |
Although depreciation and amortization are noncash charges, the assets being depreciated and amortized often will have to be replaced in the future and EBITDA does not reflect any cash requirements for such replacements; and |
| • |
Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Consolidated Results of Continuing Operations
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
| Three Months Ended September 30, |
Percentage |
Percentage change excluding |
||||||||||||||
| 2024 |
2023 |
change |
recent acquisitions |
|||||||||||||
| (in millions) |
||||||||||||||||
| Underwriting |
$ | 506.9 | $ | 475.2 | 6.7 | % | 6.7 | % | ||||||||
| Claims |
218.4 | 202.4 | 7.9 | % | 7.6 | % | ||||||||||
| Total Insurance |
$ | 725.3 | $ | 677.6 | 7.0 | % | 7.0 | % | ||||||||
Our recent acquisition (Rocket within the claims category of the Insurance segment) contributed net revenues of $0.6 million, while the remaining Insurance revenues increased $47.1 million or 7.0%. Our underwriting revenue increased $31.8 million or 6.7%, primarily due to an annual increase in prices derived from continued enhancements to the models and content of the solutions within our forms, rules and loss cost services, as well as selling expanded solutions to new and existing customers within extreme event solutions. In addition, specialty business and life solutions contributed to the growth. Our claims revenue increased $15.3 million or 7.6%, primarily due to solid growth in anti-fraud solutions and property estimating solutions.
Cost of Revenues
Cost of revenues was $223.4 million for the three months ended September 30, 2024 compared to $217.2 million for the three months ended September 30, 2023, an increase of $6.2 million or 2.9%. Our recent acquisition accounted for an increase of $0.4 million in cost of revenues. The remaining increase of $5.8 million or 2.7% was primarily due to increase in salaries and employee benefits of $5.1 million, professional consulting fees of $4.0 million, information technology expenses of $2.8 million, travel expenses of $0.6 million, and bad debt expense of $0.3 million, partially offset by a reduction in data costs of $2.5 million, $1.5 million gain primarily related to our Jersey City lease modification, office expense of $0.6 million, and other operating costs of $2.4 million.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $114.0 million for the three months ended September 30, 2024 compared to $111.6 million for the three months ended September 30, 2023, an increase of $2.4 million or 2.2%. Our recent acquisition accounted for an increase of $0.3 million in selling, general, and administrative expenses. The remaining increase of $2.1 million or 2.0% was primarily due to professional consulting fees of $8.1 million, a $6.9 million loss on the disposal of assets primarily due to a write-off of leasehold improvements related to our lease modification, salaries and employee benefits of $3.0 million, data costs of $1.5 million, travel expenses of $1.0 million, rent expense of $0.8 million, bad debt expense of $0.5 million, and other operating costs of $0.4 million, partially offset by a prior year litigation reserve expense of $19.2 million related to our former Financial Services segment, and a decrease in information technology expenses of $0.9 million.
Depreciation and Amortization of Fixed Assets
Depreciation and amortization of fixed assets were $58.1 million for the three months ended September 30, 2024 compared to $48.1 million for the three months ended September 30, 2023, an increase of $10.0 million or 20.8%. The increase was primarily due to the timing of certain large internally developed software projects that were completed and placed into service in the prior year.
Amortization of Intangible Assets
Amortization of intangible assets was $18.3 million for the three months ended September 30, 2024 compared to $19.6 million for the three months ended September 30, 2023, a decrease of $1.3 million or 6.6%. The decrease was primarily due to intangible assets that were fully amortized, partially offset by an increase due to our recent acquisition of $0.3 million.
Investment Gain (Loss)
Investment gain was $5.9 million for the three months ended September 30, 2024 compared to a loss of $2.0 million for the three months ended September 30, 2023, an increase of $7.9 million. The increase was primarily driven by the impact of foreign currencies associated with transactions in the normal course of business.
Interest Expense, net
Interest expense, net was $32.1 million for the three months ended September 30, 2024 compared to $29.4 million for the three months ended September 30, 2023, an increase of $2.7 million or 9.2%. The increase in interest expense was primarily related to the issuance of our 2034 Senior Notes, offset by the cash tender that was completed on June 7, 2024.
Provision for Income Taxes
The provision for income taxes was $65.3 million for the three months ended September 30, 2024, compared to $62.3 million for the three months ended September 30, 2023, an increase of $3.0 million or 4.6%. The effective tax rate was 22.9% for the three months ended September 30, 2024 compared to 25.0% for the three months ended September 30, 2023. The effective tax rate for the three months ended September 30, 2024 was lower than the effective tax rate for the three months ended September 30, 2023 primarily due to nondeductible litigation accruals recorded in the prior period. The difference between statutory tax rates and our effective tax rate is primarily due to state and local taxes, partially offset by tax benefits attributable to equity compensation.
Net Income Margin
The net income margin was 30.3% for the three months ended September 30, 2024 compared to 27.7% for the three months ended September 30, 2023. The increase in net income margin was primarily driven by revenue growth, cost discipline, a decrease in our effective tax rate, discussed above, and a litigation reserve expense of $19.2 million recognized in the prior year.
EBITDA Margin [1]
EBITDA was $393.8 million for the three months ended September 30, 2024 compared to $346.8 million for the three months ended September 30, 2023. The EBITDA margin for our consolidated results was 54.3% for the three months ended September 30, 2024 compared to 51.2% for the three months ended September 30, 2023. The increase in EBITDA margin was primarily driven by revenue growth, cost discipline, a decrease in our effective tax rate, discussed above, and a litigation reserve expense of $19.2 million recognized in the prior year.
[1] Note: Consolidated EBITDA margin, a non-GAAP measure, is calculated as a percentage of consolidated revenue. A reconciliation from net income to EBITDA is presented in the table below on p. 37.
Consolidated Results of Continuing Operations
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
| Nine Months Ended September 30, |
Percentage |
Percentage change excluding |
||||||||||||||
| 2024 |
2023 |
change |
recent acquisitions |
|||||||||||||
| (in millions) |
||||||||||||||||
| Underwriting |
$ | 1,512.8 | $ | 1,413.7 | 7.0 | % | 6.9 | % | ||||||||
| Claims |
633.3 | 590.5 | 7.3 | % | 6.1 | % | ||||||||||
| Total Insurance |
$ | 2,146.1 | $ | 2,004.2 | 7.1 | % | 6.7 | % | ||||||||
Our recent acquisitions (Morning Data within the underwriting category of our Insurance segment; Rocket, Mavera and Krug within the claims category of the Insurance segment) contributed net revenues of $8.1 million, while the remaining Insurance revenues increased$133.8 million or 6.7%. Our underwriting revenue increased $98.1 million or 6.9%, primarily due to an annual increase in prices derived from continued enhancements to the models and content of the solutions within our forms, rules and loss cost services, as well as selling expanded solutions to new and existing customers within extreme event solutions, underwriting data and analytic solutions, and specialty business solutions. Our claims revenue increased $35.7 million or 6.1%, primarily due to growth in anti-fraud solutions and property estimating solutions.
Cost of Revenues
Cost of revenues was $670.6 million for the nine months ended September 30, 2024 compared to $650.3 million for the nine months ended September 30, 2023, an increase of $20.3 million or 3.1%. Our recent acquisitions accounted for an increase of $0.4 million in cost of revenues, primarily related to salaries and benefits. The remaining increase related to Insurance of $19.9 million or 3.1% was primarily due to increase in salaries and employee benefits of $18.5 million, professional consulting fees of $5.0 million, information technology expenses of $4.7 million, and bad debt expense of $2.5 million, partially offset by a reduction in data costs of $3.4 million, rent expense of $2.1 million, $1.5 million gain related to our lease modification, fees and membership costs of $0.8 million, office expenses of $0.6 million, and other operating costs of $2.4 million.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $308.4 million for the nine months ended September 30, 2024 compared to $277.4 million for the nine months ended September 30, 2023, an increase of $31.0 million or 11.2%. Our recent acquisitions, inclusive of our acquisition-related costs (earn-outs), accounted for an increase of $20.8 million in selling, general, and administrative expenses. This increase was primarily due to our earn-out credit of $22.0 million in the prior year that did not recur in the current period. The remaining increase of $10.2 million or 3.5% was primarily due to an increase in professional fees of $10.1 million, salaries and employee benefits of $9.9 million, a loss of $6.9 million primarily due to the disposal of certain leasehold improvements related to our lease modification, increases in insurance costs of $1.7 million, data costs of $1.4 million, and travel expenses of $1.0 million, partially offset by a prior year litigation reserve expense of $19.2 million related to our former Financial Services segment, decreases in fees and membership costs of $1.2 million, and other operating costs of $0.4 million.
Depreciation and Amortization of Fixed Assets
Depreciation and amortization of fixed assets were $174.5 million for the nine months ended September 30, 2024 compared to $139.2 million for the nine months ended September 30, 2023, an increase of $35.3 million or 25.4%. The increase was primarily due to the timing of certain large internally developed software projects that were completed and placed into service in the prior year.
Amortization of Intangible Assets
Amortization of intangible assets was $55.0 million for the nine months ended September 30, 2024 compared to $56.1 million for the nine months ended September 30, 2023, an decrease of $1.1 million or 2.0%. The decrease was primarily due to intangible assets that were fully amortized.
Net gain on Early Extinguishment of Debt
Net gain on early extinguishment of debt was $3.6 million for the nine months ended September 30, 2024 due to a cash tender offer of $400.0 million aggregate principal of our 2025 Senior Notes that was completed on June 7, 2024.
Investment Gain (Loss)
Investment gain was $102.4 million for the nine months ended September 30, 2024 compared to a loss of $9.3 million for the nine months ended September 30, 2023, an increase of $111.7 million. The increase was primarily driven by net gains associated with the settlement of retained interests related to the prior sales of our healthcare business in 2016 and our specialized markets business in 2022 and the impact of foreign currencies.
Interest Expense, net
Interest expense, net was $90.1 million for the nine months ended September 30, 2024 compared to $87.4 million for the nine months ended September 30, 2023, an increase of $2.7 million or 3.1%. The increase in interest expense was primarily related to the issuance of our 2034 Senior Notes, offset by the cash tender that was completed on June 7, 2024.
Provision for Income Taxes
The provision for income taxes was $206.3 million for the nine months ended September 30, 2024, compared to $198.4 million for the nine months ended September 30, 2023, an increase of $7.9 million or 3.9%. The effective tax rate was 21.6% for the nine months ended September 30, 2024 compared to 25.3% for the nine months ended September 30, 2023. The effective tax rate for the nine months ended September 30, 2024 was lower than the effective tax rate for the nine months ended September 30, 2023 primarily due to tax charges incurred in structuring the sale of our Energy business in the prior year, as well as additional tax benefits resulting from the Company's recognition of capital gains arising from the settlement of our investment in non-public companies in the second quarter. The difference between statutory tax rates and our effective tax rate is primarily due to state and local taxes, partially offset by tax benefits attributable to equity compensation.
Net Income Margin
The net income margin was 34.8% for the nine months ended September 30, 2024 compared to 22.0% for the nine months ended September 30, 2023. The increase in net income margin was primarily driven by net gains associated with the settlement of retained interests related to the prior sales of our healthcare business in 2016 and our specialized markets business in 2022, the early extinguishment of debt, discussed above, and a prior year litigation reserve expense related to our former Financial Services segment. The net income margin for September 30, 2023 included a loss from discontinued operations of $145.5 million, which negatively impacted our net income margin by 7.3%.
EBITDA Margin [1]
EBITDA was $1,273.1 million for the nine months ended September 30, 2024 compared to $1,067.2 million for the nine months ended September 30, 2023. The EBITDA margin for our consolidated results was 59.3% for the nine months ended September 30, 2024 compared to 53.3% for the nine months ended September 30, 2023.
[1] Note: Consolidated EBITDA margin, a non-GAAP measure, is calculated as a percentage of consolidated revenue. A reconciliation from net income to EBITDA is presented in the table below.
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2024 |
2023 |
2024 |
2023 |
|||||||||||||
| Total |
Total |
Total |
Total |
|||||||||||||
| Net income |
$ | 220.0 | $ | 187.4 | $ | 747.2 | $ | 440.6 | ||||||||
| Less: Loss from discontinued operations |
— | - | — | 145.5 | ||||||||||||
| Income from continuing operations |
220.0 | 187.4 | 747.2 | 586.1 | ||||||||||||
| Depreciation and amortization of fixed assets |
58.1 | 48.1 | 174.5 | 139.2 | ||||||||||||
| Amortization of intangible assets |
18.3 | 19.6 | 55.0 | 56.1 | ||||||||||||
| Interest expense |
32.1 | 29.4 | 90.1 | 87.4 | ||||||||||||
| Provision for income taxes |
65.3 | 62.3 | 206.3 | 198.4 | ||||||||||||
| EBITDA |
$ | 393.8 | $ | 346.8 | $ | 1,273.1 | $ | 1,067.2 | ||||||||
| Revenue |
$ | 725.3 | $ | 677.6 | $ | 2,146.1 | $ | 2,004.2 | ||||||||
| EBITDA Margin |
54.3 | % | 51.2 | % | 59.3 | % | 53.3 | % | ||||||||
Energy and Specialized Markets
The Energy business within the "Energy and Specialized Markets" segment was classified as discontinued operations per the guidance in ASC 205-20. Accordingly, all results of the Energy business have been removed from continuing operations and presented as discontinued operations in our consolidated statements of operations for all periods presented. On February 1, 2023, we completed the sale of our Energy business.
As a result of these sale transactions, we have excluded the Energy and Specialized Markets from our management's discussion and analysis of the results of operations by segment.
Liquidity and Capital Resources
As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents and available-for-sale securities totaling $459.2 million and $303.9 million, respectively. We maintain our cash and cash equivalents in higher credit quality financial institutions in order to limit the amount of credit exposure. As of September 30, 2024 and December 31, 2023, a vast majority of our domestic cash and cash equivalents is with TD Bank, N.A., and JPMorgan Chase N.A. Subscriptions for our solutions are billed and generally paid in advance of rendering services either quarterly or in full upon commencement of the subscription period, which is usually for one year. Subscriptions are automatically renewed at the beginning of each calendar year. We have historically generated significant cash flows from operations. As a result of this factor, as well as the availability of funds under our Credit Facility, we expect that we will have sufficient cash to meet our working capital and capital expenditure needs and to fuel our future growth plans.
We have historically managed the business with a working capital deficit due to the fact that, as described above, we offer our solutions and services primarily through annual subscriptions or long-term contracts, which are generally prepaid quarterly or annually in advance of the services being rendered. When cash is received for prepayment of invoices, we record an asset (cash and cash equivalents) on our balance sheet with the offset recorded as a current liability (deferred revenues). This current liability is deferred revenue that does not require a direct cash outflow since our customers have prepaid and are obligated to purchase the services. In most businesses, growth in revenue typically leads to an increase in the accounts receivable balance causing a use of cash as a company grows. Unlike these businesses, our cash position is favorably affected by revenue growth, which results in a source of cash due to our customers prepaying for most of our services.
We have also historically used a portion of our cash for repurchases of our common stock from our stockholders. During the nine months ended September 30, 2024 and 2023, we repurchased $750.0 million (inclusive of $60.0 million in treasury stock not yet settled) and $2,549.8 million (inclusive of$500.0 million in treasury stock then not yet settled), respectively, of our common stock. The repurchase of our common stock in the third quarter of 2024 was funded using cash from operations. For the nine months ended September 30, 2024 and 2023, we also paid dividends of $166.6 million and $147.9 million, respectively.
Financing and Financing Capacity
We had total debt, excluding finance lease liabilities, unamortized discounts and premium, and debt issuance costs of $3,050.0 million and $2,850.0 million at September 30, 2024 and December 31, 2023, respectively, and we were in compliance with our financial and other covenants. The debt at September 30, 2024, primarily consists of senior notes issued in 2024, 2023, 2020, 2019, and 2015. Interest on the senior notes is payable semi-annually each year. The unamortized discount and debt issuance costs were recorded as "Long-term debt" in the accompanying consolidated balance sheets, and will be amortized to "Interest expense" in the accompanying consolidated statements of operations within this Form 10-Q over the life of the respective senior note. The indenture governing the senior notes restricts our ability to, among other things, create certain liens, enter into sale/leaseback transactions, and consolidate with, sell, lease, convey, or otherwise transfer all or substantially all of our assets, or merge with or into, any other person or entity. We have made, and may from time to time in the future make, optional repayments on our debt obligations, which may include repurchases or exchanges of our outstanding notes, depending on various factors, such as market conditions. Any such repurchases may be effected through privately negotiated transactions, market transactions, tender offers, redemptions or otherwise. See Note 10. for additional information on our financing activities.
We have a $1,000.0 million Syndicated Revolving Credit Facility with Bank of America N.A., HSBC Bank USA, N.A., JP Morgan Chase Bank, N.A., Wells Fargo Bank, N.A., Citibank, N.A., Morgan Stanley Bank, N.A., TD Bank, N.A., Goldman Sachs Bank USA, and the Northern Trust Company with a maturity date of April 5, 2028. Borrowing under the facility is payable at an interest rate of SOFR plus 100.0 to 162.5 basis points, depending on the public debt rating. The financial covenants require that, at the end of any fiscal quarter, we have a consolidated funded debt leverage ratio of less than 3.75 to 1.0. At our election, the maximum consolidated funded debt leverage ratio could be permitted to increase to 4.50 to 1.0 (no more than once) and to 4.25 to 1.0 (no more than once) in connection with the closing of a permitted acquisition. The Syndicated Credit Facility may be used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividend payments, and the Repurchase Program. As of September 30, 2024, we were in compliance with all financial and other debt covenants under the Syndicated Credit Facility. As of September 30, 2024 and December 31, 2023, the available capacity under the Syndicated Revolving Credit Facility was $995.5 million and $995.4 million, which takes into account outstanding letters of credit of $4.5 million and $4.6 million, respectively.
Cash Flow
The following table summarizes our cash flow data:
| Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||
| September 30, |
September 30, |
|||||||||||||||||||||||
| 2024 |
2023 |
Percentage change |
2024 |
2023 |
Percentage change |
|||||||||||||||||||
| (in millions) |
(in millions) |
|||||||||||||||||||||||
| Net cash provided by operating activities |
$ | 296.2 | $ | 250.1 | 18.4 | % | $ | 888.6 | $ | 808.3 | 9.9 | % | ||||||||||||
| Net cash (used in) provided by investing activities |
$ | (52.6 | ) | $ | (55.3 | ) | 4.9 | % | $ | (76.4 | ) | $ | 2,803.5 | (102.7 | )% | |||||||||
| Net cash used in financing activities |
$ | (421.3 | ) | $ | (89.6 | ) | 370.2 | % | $ | (658.2 | ) | $ | (3,491.4 | ) | 81.1 | % | ||||||||
Operating Activities
Net cash provided by operating activities was $296.2 million for the three months ended September 30, 2024, compared to $250.1 million for the three months ended September 30, 2023, an increase of $46.1 million or 18.4%. The increase in operating cash flow was due to an increase in operating profit.
Net cash provided by operating activities was $888.6 million for the nine months ended September 30, 2024, compared to $808.3 million for the nine months ended September 30, 2023, an increase of $80.3 million or 9.9%. The increase in operating cash flow was due to an increase in operating profit, partially offset by a $37.0 million payment to settle the inquiry by the Department of Justice.
Investing Activities
Net cash used in investing activities of $52.6 million for the three months ended September 30, 2024 was primarily related to capital expenditures of $55.5 million, and investments in non-public companies of $0.9 million, partially offset by an escrow release associated with acquisitions of $3.8 million. Net cash used in investing activities of $55.3 million for the three months ended September 30, 2023 was primarily related to capital expenditures of $54.3 million as well as investments in nonpublic companies of $0.9 million.
Net cash used in investing activities of $76.4 million for the nine months ended September 30, 2024 was primarily related to capital expenditures of $168.5 million, and acquisitions and a purchase of an additional controlling interest totaling $23.4 million, partially offset by proceeds received upon settlement of our retained interests related to the prior sales of our healthcare business in 2016 and our specialized markets business in 2022 of $112.1 million, and an escrow release associated with acquisitions of $3.8 million. Net cash provided by investing activities of $2,803.5 million for the nine months ended September 30, 2023 was primarily related to proceeds from the sale of our Energy business of $3,066.4 million, partially offset by capital expenditures of $173.7 million and acquisitions, including escrow funding, of $87.1 million.
Net cash used in financing activities of $421.3 million for the three months ended September 30, 2024 was primarily driven by the funding of a $400.0 million accelerated share repurchase program and dividends paid of $55.3 million, partially offset by proceeds from stock options exercised of $47.4 million. Net cash used in financing activities of $89.6 million for the three months ended September 30, 2023 was primarily driven by the repurchase of common stock of $49.8 million and dividends paid of $49.2 million, partially offset by proceeds from stock options exercised of $19.4 million.
Net cash used in financing activities of $658.2 million for the nine months ended September 30, 2024 was primarily driven by the funding of $750.0 million of accelerated share repurchase programs, the payment on the early extinguishment of debt of $396.4 million, and dividends paid of $166.6 million, partially offset by proceeds from the issuance of long-term debt, net of original discount, of $590.2 million, and proceeds from stock options exercised of $110.6 million. Net cash used in financing activities of $3,491.4 million for the nine months ended September 30, 2023 was primarily driven by the funding of $2,549.8 million in share repurchases, repayments of debt under our revolving credit and bilateral credit facilities of $1,265.0 million, and dividend payments of $147.9 million, partially offset by the proceeds from the issuance of our 2033 Senior Notes of $495.2 million, and proceeds from stock options exercised of $134.3 million.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Contractual Obligations
There have been no material changes to our contractual obligations outside the ordinary course of our business from those reported in our annual report on Form 10-K and filed with the Securities and Exchange Commission on February 21, 2024.
Critical Accounting Estimates
Our management’s discussion and analysis of financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements require management to make estimates and judgments that affect reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the dates of the financial statements and revenue and expenses during the reporting periods. These estimates are based on historical experience and on other assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, including those related to acquisition purchase price allocations, revenue recognition, goodwill and intangible assets, pension and other postretirement benefits, stock-based compensation, income taxes, and allowance for doubtful accounts. Actual results may differ from these assumptions or conditions. Some of the judgments that management makes in applying its accounting estimates in these areas are discussed under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K dated and filed with the Securities and Exchange Commission on February 21, 2024. Since the date of our annual report on Form 10-K, there have been no material changes to our critical accounting policies and estimates other than the items noted below.
| Quantitative and Qualitative Disclosures About Market Risk |
Market risks at September 30, 2024 have not materially changed from those discussed under Item 7A in our annual report on Form 10-K dated and filed with the Securities and Exchange Commission on February 21, 2024.
| Controls and Procedures |
Disclosure Controls and Procedures
We are required to maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives at the reasonable assurance level.
Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report on Form 10-Q. Based upon the foregoing assessments, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
During the three months ended September 30, 2024, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| Legal Proceedings |
We are party to legal proceedings with respect to a variety of matters in the ordinary course of business. See Part I Item 1. Note 16 to our condensed consolidated financial statements for the nine months ended September 30, 2024 for a description of our significant current legal proceedings, which is incorporated by reference herein.
| Risk Factors |
There has been no material change in the information provided under the heading “Risk Factors” in our annual report on Form 10-K dated and filed with the Securities and Exchange Commission on February 21, 2024, as supplemented by the information provided under the heading "Risk Factors" in our Form 10-Q for the quarter ended September 30, 2024.
| Unregistered Sales of Equity Securities and Use of Proceeds |
Recent Sales of Unregistered Securities
We did not have any unregistered sales of equity securities during the period covered by this report.
Issuer Purchases of Equity Securities
Under the Repurchase Program, we may repurchase stock in the market or as otherwise determined by us. These authorizations have no expiration dates and may be suspended or terminated at any time. As of September 30, 2024, we had $891.5 million available to repurchase shares. Our share repurchases for the quarter ended September 30, 2024 are set forth below:
| Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
||||||||||||
| (in millions) |
||||||||||||||||
| July 1, 2024 through July 31, 2024 |
68,645 | (1) | $ | 271.54 | 68,645 | $ | 1,291.5 | |||||||||
| August 1, 2024 through August 31, 2024 |
1,302,981 | (2) | $ | 260.94 | 1,302,981 | $ | 891.5 | |||||||||
| September 1, 2024 through September 30, 2024 |
— | $ | — | — | $ | 891.5 | ||||||||||
| 1,371,626 | 1,371,626 | |||||||||||||||
| (1) |
In June 2024, we entered into an additional ASR agreement to repurchase shares of our common stock for an aggregate purchase price of $150.0 million with Citibank, N.A. This ASR agreement is accounted for as a treasury stock transaction and a forward stock purchase agreement indexed to our common stock. Upon payment of the aggregate purchase price on June 13, 2024, we received an initial delivery of 483,761 shares of our common stock at an initial price of $263.56 per share, representing approximately 85 percent of the aggregate purchase price. Upon the final settlement of this ASR agreement in July 2024, we received 68,645 additional shares, as determined based upon the volume weighted average share price of our common stock, less a discount, of $271.54 during the term of this ASR agreement. |
| (2) |
In August 2024, we entered into an additional ASR agreement to repurchase shares of our common stock for an aggregate purchase price of $400.0 million with Goldman Sachs & Co. LLC. This ASR agreement is accounted for as a treasury stock transaction and a forward stock purchase agreement indexed to our common stock. Upon payment of the aggregate purchase price on August 7, 2024, we received an initial delivery of 1,302,981 shares of our common stock at an initial price of $260.94 per share, representing approximately 85 percent of the aggregate purchase price. Upon the final settlement of this ASR agreement in October 2024, we received 212,635 additional shares, as determined based upon the volume weighted average share price of our common stock, less a discount, of $263.92 during the term of this ASR agreement. |
| Defaults Upon Senior Securities |
None.
| Mine Safety Disclosures |
None.
| Other Information |
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the fiscal quarter ended September 30, 2024, the following Section 16 officers and directors adopted, modified or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act):
| ● | , a , a new trading plan on (with the first trade under the new plan scheduled for a date on or after January 7, 2025). The trading plan will be effective until June 30, 2025 to sell shares of common stock. |
There were “non-Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K of the Exchange Act) adopted, modified or terminated during the fiscal quarter ended September 30, 2024 by Section 16 officers and directors. Each of the Rule 10b5-1 trading arrangements is in accordance with our Insider Trading Policy and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section 16 filings with the SEC in accordance with applicable securities laws, rules and regulations.
| Exhibits |
See Exhibit Index.
| Exhibit Number |
Description |
|
| 31.1 |
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| 31.2 |
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| 32.1 |
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| 101.INS |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.* |
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| 101.SCH |
Inline XBRL Taxonomy Extension Schema.* |
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| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase.* |
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| 101.DEF |
Inline XBRL Taxonomy Definition Linkbase.* |
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| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase.* |
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| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase.* |
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| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).* |
| * |
Filed herewith. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Verisk Analytics, Inc. |
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| (Registrant) |
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| Date: October 30, 2024 |
By: |
/s/ Elizabeth D. Mann |
|
| Elizabeth D. Mann |
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| Chief Financial Officer |
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| (Principal Financial Officer and Duly Authorized Officer) |
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