Verisk’s Q3 2025: Cash Flow Soars 40% and EBITDA Margin Hits 55.8% as Growth Targets Stay Intact
Record Free Cash Flow and Solid Margin Expansion Lead the Quarter
Verisk’s third-quarter 2025 financial results underscored both stability and upward momentum in its business model. Free cash flow leapt by nearly 40% to $336 million, outpacing revenue growth and marking the clearest sign of Verisk’s improving operational leverage. EBITDA margin advanced to 55.8%, reflecting cost discipline even as revenue climbed 5.9% to $768 million, with organic constant currency revenue up 5.5%.
Core Financial Highlights: Broad-Based Improvements
| Metric | Q3 2025 | Q3 2024 | % Change |
|---|---|---|---|
| Revenue ($M) | 768 | 725 | 5.9% |
| Adjusted EBITDA ($M) | 429 | 401 | 7.2% |
| Adjusted EBITDA Margin | 55.8% | 55.2% | +0.6 pts |
| Net Income ($M) | 226 | 220 | 2.5% |
| Diluted Adj. EPS | 1.72 | 1.67 | 3.0% |
| Free Cash Flow ($M) | 336 | 241 | 39.6% |
The top-line boost was mainly driven by the Underwriting segment, which posted a 6.9% revenue increase (5.8% on an organic constant currency basis), led by continued demand for forms, rules, and extreme event solutions. Claims solutions delivered a solid 3.6% growth (5% organic constant currency), even after factoring in headwinds from an unusually low severe weather quarter.
Operating Leverage and Cash Generation at the Forefront
Verisk’s EBITDA margin of 55.8% for the quarter set a new benchmark, propelled by strong cost controls and a scalable platform. The margin expansion, up 60 basis points year over year, highlights management’s effective execution on operating efficiency. Adjusted EBITDA rose 8.8% on an organic constant currency basis—outpacing both revenue and net income, a signal of growing operational flexibility.
| Segment | Revenue Q3 2025 ($M) | % Change YoY (Reported) | % Change OCC |
|---|---|---|---|
| Underwriting | 542 | 6.9% | 5.8% |
| Claims | 226 | 3.6% | 5.0% |
Free cash flow not only grew 39.6% but also substantially exceeded net income. This robust cash conversion supports ongoing dividend increases—now up 15.4% to $0.45 per share—and an active share repurchase program, with $1.2 billion still authorized.
Guidance Confirms Consistent Long-Term Targets
Management reaffirmed guidance for 2025, projecting full-year adjusted EBITDA of $1.69-$1.72 billion and diluted adjusted EPS of $6.80-$7.00, with a steady margin outlook of 55.0%-55.8%. Despite minor adjustments to interest expense forecasts, the overall outlook reflects ongoing stability. The recent low in severe weather was cited as a modest drag, yet the team remains confident in hitting long-term growth benchmarks for 2025 and beyond.
| 2025 Outlook | Previous | Updated |
|---|---|---|
| Total Revenue ($M) | 3,090-3,130 | 3,050-3,080 |
| Adjusted EBITDA ($M) | 1,700-1,740 | 1,690-1,720 |
| Adj. EBITDA Margin | 55.0-55.8% | 55.0-55.8% |
| Diluted Adj. EPS | 6.80-7.00 | 6.80-7.00 |
Balance Sheet Bolstered by Cash Infusion and Conservative Leverage
As of September 30, 2025, Verisk’s cash and cash equivalents jumped to $2.11 billion from $291 million at year-end, providing considerable balance sheet flexibility. Net debt remains manageable even after active share buybacks and capital returns. Management continued investing in future growth with capital expenditures at $67.4 million for the quarter.
What’s Next: FTC Review Adds Short-Term Uncertainty to AccuLynx Acquisition
The one external overhang: the Federal Trade Commission issued a “Second Request” as it reviews Verisk’s pending AccuLynx acquisition, injecting some regulatory uncertainty into the M&A pipeline. The core business, however, remains unaffected by this process, according to management.
Key Takeaways: Strength in Cash Generation and Operational Leverage Stand Out
For investors and market watchers, the real headline is Verisk’s strong free cash flow growth and continued margin expansion—even amid minor macro headwinds. While regulatory scrutiny over the AccuLynx deal introduces a note of uncertainty, the fundamentals and disciplined cost structure place Verisk in a strong position heading into year-end. Those following the data analytics sector will want to monitor updates on M&A, cash allocation, and potential impacts of shifting weather patterns on segment performance.
Contact Information:
If you have feedback or concerns about the content, please feel free to reach out to us via email at support@marketchameleon.com.
About the Publisher - Marketchameleon.com:
Marketchameleon is a comprehensive financial research and analysis website specializing in stock and options markets. We leverage extensive data, models, and analytics to provide valuable insights into these markets. Our primary goal is to assist traders in identifying potential market developments and assessing potential risks and rewards.
NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.
Disclosure: This article was generated with the assistance of AI