Verisk (NASDAQ: VRSK) adjusted EPS jumps 14.0% but free cash flow falls

What happened

Verisk Analytics, Inc. (NASDAQ: VRSK) reported third-quarter revenue of $809 million, up 5.3% from a year earlier, while net income fell 2.8%. Organic constant currency (OCC) revenue, which strips out currency moves, acquisitions and dispositions, rose 7.4%. The company left its 2026 outlook unchanged.

Adjusted EBITDA, a non-GAAP measure, reached $459 million. That is up 7.0% reported and 7.5% on the OCC basis. By OptimistFi's calculation, revenue added $40.7 million and adjusted EBITDA added $29.9 million against the third quarter of 2025.

Diluted adjusted EPS, also non-GAAP, rose 14.0% to $1.96. GAAP diluted EPS rose 5.6% to $1.70. The results came out Nov. 5 for the quarter ended Sept. 30.

Key numbers

Metric	Latest	Change	Source
Revenue	$809 million	from $768 million, +5.3%	SEC 8-K Exhibit 99.1
Adjusted EBITDA (non-GAAP)	$459 million	from $429 million, +7.0%	SEC 8-K Exhibit 99.1
Diluted adjusted EPS (non-GAAP)	$1.96	from $1.72, +14.0%	SEC 8-K Exhibit 99.1
Net income	$219 million	from $226 million, -2.8%	SEC 8-K Exhibit 99.1
Free cash flow (non-GAAP)	$200 million	from $336 million, -40.5%	SEC 8-K Exhibit 99.1
Share repurchases funded, first nine months of 2026	$1.9 billion		SEC 8-K Exhibit 99.1

Read more: Verisk Analytics (VRSK) company research

Where the growth came from

Underwriting revenue was $568 million, up 4.8% reported and 7.7% on the OCC basis. Verisk credits an annual price increase tied to enhancements in its forms, rules and loss cost services. It also cites expanded catastrophe and risk solutions sold to new and existing customers.

Claims revenue was $241 million, up 6.6% and 6.7% on the OCC basis. The company points to strong pricing, adoption of new anti-fraud analytics and growth in property and restoration solutions.

CFO Elizabeth Mann said OCC subscription revenue grew 8.2% and transactional revenue grew 3.2%. Adjusted EBITDA margin was 56.7%, against 55.8% a year earlier.

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Why profit and cash flow lagged

Net income was $219 million, against $226 million a year earlier. The company says losses on cost-based investments and higher net interest expense drove the decline, partly offset by operating leverage and cost discipline. Net interest expense rose 25.6%, by OptimistFi's calculation. The investment line swung to a $17.5 million loss from a $1.6 million loss.

Adjusted EBITDA and adjusted EPS add back a $16.7 million cost-based investment adjustment and $10.4 million of acquisition-related fees. GAAP net income still absorbs those items.

Net cash from operating activities fell 33.8% to $267 million. Free cash flow fell 40.5% to $200 million. The company cites higher cash tax payments, more interest paid and poor timing of cash collections. It also names a prior-year tax refund that did not recur. Interest paid in the quarter was $75.2 million, against $24.9 million a year earlier. Free cash flow over nine months was $824 million, down 10.0%.

Buybacks, debt and guidance

Verisk funded $1.9 billion of share repurchases in the first nine months. It received about 10.5 million shares at an average price, less a discount, of $185.46. In the third quarter it executed a $100.0 million accelerated share repurchase program and settled earlier ones, receiving 2.0 million shares at $181.76. The authorization has $700.0 million left.

The company says its lower share count helped lift EPS. Weighted-average diluted shares were 129.2 million, against 139.9 million a year earlier.

Cash and cash equivalents were $556.8 million on Sept. 30, down from $2.18 billion at Dec. 31, 2025. Long-term debt rose to $4.23 billion from $3.23 billion. Total stockholders' equity of $309.8 million became a deficit of $1.11 billion.

The 2026 outlook calls for revenue of $3.19 billion to $3.24 billion and adjusted EBITDA of $1.79 billion to $1.83 billion. It also calls for a margin of 56.0% to 56.5% and diluted adjusted EPS of $7.45 to $7.75. Through nine months, revenue was $2.40 billion, adjusted EBITDA was $1.36 billion and diluted adjusted EPS was $5.76. The nine-month margin is above the guided range.

Why it matters

OptimistFi has argued that Verisk's value rests on insurers continuing to rely on its proprietary data, models and workflow technology. Price increases and new solutions drove growth in both underwriting and claims, and subscription revenue grew fastest. That fits the view.

The caveats are in the cash and the balance sheet. Net income, operating cash flow and free cash flow all fell. The company ties the cash decline to collection timing, interest payments and a refund that did not recur. Cash dropped and debt rose over nine months of heavy buybacks. The quarter leaves the case mixed.

What's next

The Board approved a 50 cent dividend on Nov. 2, payable Dec. 31 to holders of record as of Dec. 15. The 2026 outlook assumes a dividend of $2.00 per share for the year.

The next test is Verisk's report for fourth-quarter and full-year 2026. Results inside the guided ranges for revenue and diluted adjusted EPS would support the case. Another sharp drop in free cash flow would strengthen the caveat.

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