Crawford & Company Q2 Earnings Call Highlights

Crawford & Company NYSE: CRD.A reported second-quarter results marked by stronger operating earnings, improved margins and growth in its Broadspire and International Operations businesses, while consolidated revenue declined slightly from a year earlier. Chief Executive Officer Bruce Swain said the company generated its best overall operating earnings since the third quarter of 2023, citing operational execution and weather-related claims activity in Australia and Asia. He characterized the international weather benefit as episodic and said the related projects are expected to wind down through the second half of the year.

Second-quarter revenue before reimbursements totaled $321.4 million, down slightly year over year. Foreign exchange movements added $7.7 million, or 2.5%, to revenue. Consolidated non-GAAP operating earnings rose to $29.4 million, or 9.2% of revenue, from $22 million, or 6.8% of revenue, in the prior-year quarter. GAAP net income attributable to shareholders was $13.4 million, compared with $7.8 million a year earlier. Diluted GAAP earnings per share were $0.27 for CRD.A shares and $0.28 for CRD.B shares, versus $0.16 for both share classes in the year-earlier period. Non-GAAP diluted earnings per share increased to $0.38 for both share classes from $0.22.

Broadspire, the company’s U.S.-based third-party administration business, reported quarterly revenue of $109.4 million, up 1.2% from the prior-year period. The increase reflected new disability clients and improved medical-management revenue, according to Chief Financial Officer Holly Boudreau. Broadspire’s operating earnings increased 10.8% to $15.7 million, while operating margin expanded 130 basis points. Its quarterly retention rate was 87.5%, improving sequentially from the first quarter.

Swain said Broadspire’s pipeline is weighted toward third-party administration opportunities, including business from alternative-market participants such as managing general agents, managing general underwriters and captives. He said these organizations often seek turnkey claims solutions rather than building their own internal claims operations. The company said Broadspire had made advance hires earlier in the year to prepare for incoming business, and those investments supported revenue growth during the quarter. Swain said Crawford remains bullish on the business over the longer term, though hiring ahead of new client launches could affect quarterly margins.

International Operations revenue rose 4.2% to $138 million. Excluding the exit of Crawford Legal Services and foreign currency movements, revenue increased 1.6%. Operating earnings in the segment rose 48.2%, or $3.5 mill...