Verisk Analytics, Inc. (NASDAQ:VRSK) Q4 2015 Earnings Conference Call - Final Transcript

Feb 24, 2016 • 08:30 am ET


Verisk Analytics, Inc. (NASDAQ:VRSK) Q4 2015 Earnings Conference Call - Final Transcript


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Good day everyone, and welcome to the Verisk Analytics Fourth Quarter 2015 Earnings Results Conference Call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Verisk's SVP and Treasurer, Ms. Eva Huston. Ms. Huston, please go ahead.

Eva F. Huston

Thank you, Dorothy, and good morning to everyone. We appreciate you joining us today for a discussion of our fourth quarter 2015 and full year '15 financial results.

With me on the call this morning are Scott Stephenson, President and Chief Executive Officer; and Mark Anquillare, Chief Financial Officer. Following comments by Scott and Mark highlighting some key points about our strategic priorities and financial performance, we will open up the call for your questions.

The earnings release referenced on the call, as well as the associated 10-K, can be found in the Investors section of our website at The earnings release has also been attached to an 8-K that we have furnished to the SEC. A replay of this call will be available for 30 days, until March 24, 2016, on our website and by dial-in.

Finally, as set forth in more detail in today's earnings release, I will remind everyone that today's call may include forward-looking statements about Verisk's future performance. Actual performance could differ materially from what is suggested by our comments today. Information about the factors that could affect future performance is contained in our recent SEC filings.

And now I will turn the call over to Scott Stephenson.

Scott G. Stephenson

Thanks, Eva. And good morning, everyone. We reported another year of industry-leading high single-digit organic revenue growth with margin expansion and excellent free cash flow generation.

Fourth quarter results were in line with our expectations, with total revenue growth of about 21% and an increase in diluted adjusted EPS of about 23%. Full year revenue grew 18% and diluted adjusted EPS increased about 29%. We grew the top line, excluding the healthcare analytics business and recent acquisitions, over 5% in the quarter and 7% for the full year. Profitability was strong as adjusted EBITDA excluding acquisitions grew about 7% in the quarter and 14% for the full year. Our adjusted EBITDA margins were 47% in the quarter and 48% for the full year.

We continue to work on our comprehensive review of strategic alternatives for the healthcare analytics business. There is a range of alternatives and not solely limited to a sale of the business. As responsible stewards of shareholder capital, we are being methodical and thoughtful in our approach. The volatility of the equity and leverage markets in the last quarter of 2015 and the beginning of 2016 has contributed to the timing of our efforts. We expect to be able to provide you with an update by the time we report first quarter earnings.

We're always looking to innovate to drive growth at Verisk. For example, in our insurance business one of the solutions which has been contributing to growth in Risk Assessment is the