Driven by a Strong Performance From Health-Care Vertical, Verisk Reports Solid Third-Quarter Results

Aided by a strong performance from its health-care vertical, Verisk VRSK reported solid third-quarter results. The company's revenue rose 17.3% year over year to $399 million while EBITDA grew 21.1% to $183 million. Importantly, the company's organic growth rate came in at 8.5%, up from 6.4% in the last quarter and 7.6% the year before. With demand for analytics growing rapidly in health-care vertical, we think Verisk is in a sweet spot. The company decision analytics also benefited from a steady performance from the insurance vertical, whose revenue grew 8.3% compared with last year. Mortgage and financial services continues to be a laggard but we expect Verisk to absorb it as revenue contribution from this line of business declines. Revenue from risk assessment business increased 2.8% year over year to $144 million. Benefiting from inherent operating leverage in the business, Verisk reported 150 basis points of expansion in EBITDA margin to 45.9%. The company's results exceeded our expectations in recent quarters and we plan to reassess long-term growth and margin assumptions. There's a strong possibility that we will be raising our fair value estimate. Management rescheduled the conference call to discuss third-quarter results to Nov. 2, and we plan to provide another update after the call.