On Tuesday, Crawford (NYSE:CRD) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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The full earnings call is available at https://events.q4inc.com/attendee/272191784
Summary
Crawford reported first-quarter 2026 revenues of $309.5 million, slightly down from the previous year due to lower property claims activity in the U.S. caused by benign weather conditions.
The company highlighted its new streamlined operating structure, which began in January 2026, aiming to improve efficiency and support scalable growth across its U.S. and international divisions.
Despite the decrease in U.S. property and casualty revenues by 11.3%, international operations showed revenue growth of 4.5%, driven by demand in markets like Australia, Asia, and Canada.
Crawford's non-GAAP EPS was $0.16 for both CRDA and CRDB, down from $0.21 in the prior year, with consolidated operating earnings decreasing by 23.2% year over year.
The company's cash flow from operating activities improved significantly year over year, with a positive $3.3 million in the first quarter of 2026, compared to a use of cash in the same period in 2025.
Crawford maintained its quarterly dividend and engaged in share repurchases, with 1.6 million shares still eligible under its program.
The company expressed optimism about future growth, focusing on resilience, client-centric operations, and leveraging a strong pipeline, particularly in its Broadspire segment.
Full Transcript
Dustin (Conference Operative Facilitator)
My name is Dustin and I will be your conference operative facilitator today. At this time I would like to welcome everyone to The Crawford Company First Quarter 2026 Earnings Release Conference call. In conjunction with this call, the supplementary financial presentation is available on our website at www.procoll.com under the Investor Relations section. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. Instructions will follow at that time. Should anyone need assistance at any time during this conference, please press star then zero and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, May 5, 2026. Now I would like to introduce Tammy Stevenson Crawford and Company's General Counsel.
Tammy Stevenson (General Counsel)
Thank you, Dustin. Some of the matters to be discussed in this conference call and in the Supplementary financial presentation may include forward looking statements that involve risks and uncertainties. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts, receivable financial results from our recently completed acquisitions, our continued compliance with the financial and other covenants contained in our financing agreements, our long term capital resource and liquidity requirements and our ability to pay dividends in the future. The Company's actual results achieved in future quarters could differ materially from the results that may be implied by such forward looking statements. The Company undertakes no obligation to publicly release revisions to any forward looking statements made in this conference call to reflect events or circumstances occurring after the date of the call or to reflect the occurrence of unanticipated events. In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period. For a complete discussion regarding factors which could affect the Company's financial performance, please refer to The Company's Form 10Q for the quarter ended March 31, 2026 filed with the securities and Exchange Commission, particularly the information under the headings Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations as well as subsequent Company filings with the sec. This presentation also includes certain non GAAP financial measures as defined under SEC rules. As required, a reconciliation is provided for those measures to the most directly comparable GAAP measures. I would now like to introduce Mr. Bruce Wayne, Chief Executive Officer of Crawford and Company.
Bruce Wayne (Chief Executive Officer)
Bruce, good morning and welcome to our first quarter 2026 earnings call I'm honored to be speaking with you today as President and CEO of Crawford and Company. Joining me today is Holly Boudreau, our Chief Financial Officer, and Tammy Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions. As a reminder, Crawford is a global provider of claims management and outsourcing solutions serving large insurance carriers and self insured entities with industry leading expertise across the claims landscape. Our purpose is to restore lives, businesses and communities by providing our clients with dependable and comprehensive claim solutions and outcomes. As we mentioned on our fourth quarter call, effective January 1, 2026, we began operating under two divisions U.S. operations comprised of our U.S. property and casualty and broadspire businesses and international operations which includes all service lines outside of the U.S. we believe this streamlined operating model will strengthen execution, improve client outcomes and drive continued growth across the business as we've consistently demonstrated our ability to deliver at scale across more than 70 countries with a team of 10,000 professionals and over $20 billion in claims managed annually sets us apart in a competitive and evolving marketplace. This global reach, combined with over eight decades of deep technical expertise and an unwavering commitment to service excellence and client success, allows us to meet the needs of the world's leading insurers and corporations regardless of the size or complexity of the program. This combination of global presence, technical depth and proven experience positions Crawford Co. As a trusted partner of choice for clients navigating an increasingly complex risk landscape across a variety of geographies and market conditions. Our organic growth opportunities are underpinned by a combination of favorable industry dynamics and core capabilities. First, risk is becoming increasingly complex. As a result, clients are seeking partners with a demonstrated ability to handle high severity claims with speed and efficiency, something that we're uniquely positioned to do globally. Second, as I just touched upon, we streamlined our operating structure at the start of 2026 to further improve efficiency and support continued scalable growth. It's our belief that this strengthened operating model in the US Will allow us to be a more agile and unified organization as we look to provide further value to our clients and partners. Third, our deep expertise and technology capabilities remain a true differentiator. Our ongoing commitment to our people and cutting edge technology translates into service excellence and performance differentiation in the markets we serve. Fourth, natural disasters remain a significant driver of sustained demand for our services, while individual weather events are inherently unpredictable. As we've experienced the last few quarters, the broader trajectory points towards an active and complex loss environment in which Crawford service offerings are increasingly needed. Finally, growing complexity across the claims landscape is prompting more carriers and self insured clients to search for dependable third party administrators. Our global TPA operations have the scope, scale and specialized knowledge required to help clients in today's increasingly challenging claims environment. Let me take a moment to discuss our first quarter 2026 results. We executed well in the quarter despite weather related headwinds in the U.S. that we discussed on our 2025 year end earnings call. First quarter revenues were $309.5 million down slightly compared to last year and reflected the continued trend of lower industry wide property claims activity in the US as we saw a continuation of relatively benign weather conditions to start the year. Importantly, our non weather dependent businesses reflected quarter over quarter growth with Broadspire and International Operations reporting increased revenues compared to the prior year period highlighting the benefit of our diversified operations. Consolidated operating earnings decreased by 23.2% year over year as a result of lower results in our U.S. property and casualty business and higher unallocated and corporate costs partially offset by improved operating earnings in international operations. Our non GAAP EPS was $0.16 for both CRDA and CRDB compared to $0.21 for both share classes in the prior year. Quarter operating cash flow was 3.3 million in the first quarter of 2026, improving by 17.2 million year over year and providing us with continued financial strength and flexibility. We added $24 million in new and enhanced business during the first quarter. Pipeline activity in the quarter was encouraging and we have a continued focus on further sharpening our go to market approach to turn these opportunities into wins. Our leverage ratio was 1.62 times EBITDA, well below industry levels reflecting our disciplined capital management approach. We continue to have a thoughtful approach to capital allocation, strategically investing in our business with an eye towards long term growth while ensuring continued balance sheet and liquidity strength. We maintained our quarterly dividend and opportunistically engaged in share repurchases during the quarter. Beyond organic investment in returning capital to shareholders, we continually evaluate external growth opportunities including targeting acquisitions and acqui hires that can meaningfully broaden our capabilities and strengthen our position in the market. With that, I'll turn the call over to Holly for a deeper look at our first quarter financial performance.
Holly Boudreau (Chief Financial Officer)
Thank you. As Bruce noted earlier, effective 1-1-2026, we streamlined our operating structure and began operating under two divisions U.S. operations, which includes our U.S. property and casualty business and Broadspire and International Operations which is made up of all service lines outside the U.S. in first quarter 2026. U.S. property and casualty, which consists of our U.S. loss adjusting and Networks businesses contributed 23% of revenues. Broadspire, our U.S. based third party administration business represented 34% of revenues and International Operations accounted for 43% of revenues. U.S. property casualty revenues decreased 11.3% year over year reflecting the absence of revenues associated with Hurricanes Helene and Milton recognized in the first quarter of 2025 and continuing the trend of lower industry wide property claims activity in the U.S. Operating earnings in the segment decreased by 2.2 million or 22.1% year over year with operating margin down 150 basis points. Despite the extended trend of benign weather we're seeing, we remain well positioned to serve our clients with a strong pool of high caliber experienced adjusters with expertise serving major and complex claims to drive future growth. Broadspire delivered quarterly revenues of $104.8 million, an increase of 1% from the prior year period reflecting a slow ramp for certain new client wins. A retention rate of 86% is related to the loss of a client in the quarter and it's not indicative of any broader trend. The segment delivered operating earnings of 10.9 million decreasing by 1.1 million or 9.4% year over year with operating margin decreasing by 120 basis points reflecting planned hiring and anticipation of new business wins. International operations. First quarter 2026 revenue increased 4.5% to 131.9 million compared to the prior year. Revenue decreased 1.7% on a constant currency basis due to foreign exchange fluctuations. Operating earnings increased by 1.8 million or 80% with operating margin increasing by 120 basis points. International's first quarter operating performance reflects the strong demand across key markets as Australia and Asia specifically saw an increase in catastrophe related claims events. Additionally, Canada saw margin accretion from cost control initiatives started in 2025. For further context around the ongoing weather cycle, the first quarter of 2026 saw a 16% decline in U.S. severe storms report compared to the prior year, translating into a roughly 6% reduction in weather related revenues to Crawford in the quarter. Notably, our weather related revenues remained stable on a year over year basis, a testament to the balanced nature of our business and the strength of our underlying operation. And now for a look at our consolidated results. In the first quarter of 2026, company wide revenues before reimbursements were 309.5 million, a decrease of 1% compared to the prior year period. Foreign exchange rates increased revenue before reimbursement by 7.8 million or 2.5% GAAP net income attributable to shareholders totaled 4.9 million compared to that income of 6.7 million the same period of 2025. GAAP diluted EPS in the 2026 first quarter was $0.10 for both CRDA and CRDB, a decrease from earnings of $0.13 for both share classes in the 2025 period. On a non GAAP basis, diluted EPS was $0.16 for CRDA and CRDB, decreasing from $0.21 for both share classes in the prior year period. The company's non GAAP operating earnings totaled $13.7 million in the 2026 first quarter, or 4.4% of revenues, compared to $17.8 million or 5.7% of revenues in the prior year period. Consolidated Adjusted EBITDA was $22.4 million in the 2026 first quarter, or 7.2% of revenues, decreasing from 26 point or 8.6% of revenues in the 2025 quarter. The company's cash and cash equivalents as of March 31, 2026 totaled 54.5 million compared to 64.1 million at December 31, 2025. Total receivables were 260.8 million as of March 31, 2026, up 18.2 million from 2025 year end. The company's total debt outstanding as of March 31, 2026 totaling $194.1 million, up $5 million from December 31, 2025. Net debt was approximately $140 million as of March 31, 2026, while our U.S. pension liability was $16.7 million, reflecting a funded ratio of 93.2%. We made no discretionary contributions to our U.S. defined pension benefit plan during the first quarter of 2026. Cash flow provided by operating activities for the first quarter of 2026 was $3.3 million, increasing from a use of cash of $13.9 million in the prior year quarter. Free cash flow was negative $4.6 million in the 2026 first quarter, improving from negative $23.2 million in the first quarter of 2025. Unallocated corporate costs were 8.8 million in the 2026 first quarter compared to cost of 6.1 million in the 2025 period. The variance was driven by an increase in unallocated compensation expense and self insurance reserves. Non service pension costs were 2 million in the 2026 first quarter, a decrease from 2.3 million in the same period of 2025. During the first quarter of 2026, we paid a quarterly dividend of 7 and a half cents a share. The company repurchased over 525,000 shares of CRDA and CRDB during the first quarter of 2026. Approximately 1.6 million shares remain eligible to be repurchased under our existing share purchase program as of March 31, 2026. And now I'll turn the call back over to Bruce.
Bruce Wayne (Chief Executive Officer)
Thank you, Holly. As we conclude the first quarter of 2026, I'm proud of the progress we achieved despite weather related headwinds to start the year. While recent claims activity is tracked below historical norms, our first quarter emphasis has been on building resilience by strengthening our operating foundation, sharpening our go to market approach, and positioning Crawford to be prepared when claim volumes return. As we continue through 2026, our focus remains on execution and creating the right conditions for our teams and ultimately our clients to succeed. We have a strong operational, financial and leadership foundation and I am confident that we're executing against the right priorities to deliver further shareholder value moving forward. Thank you for your time today and for your continued interest in Crawford. We look forward to updating you on our progress throughout 2026. Dustin, please open the call for questions.
Dustin (Conference Operative Facilitator)
Thank you. At this time, if you'd like to ask a question, please press Star, then the number one on your telephone keypad. To withdraw your question, press the pound key. If you're using a speakerphone, please pick up your handset before asking a question. We'll pause for just a moment to compile the Q and A roster. Your first question comes from the line of Mark Hughes from Truist Securities. Please go ahead.
Mark Hughes (Equity Analyst)
Yeah, thank you. Good morning. Hey, good morning, Mark. The Broadspire business up a little bit. I think you talked about kind of a delay in new onboarding and maybe a particular client law. How should that trend through the balance of the year? Are those going to kind of keep it steadied up a little bit or would you expect that to potentially accelerate and then what does that mean from a margin standpoint?
Bruce Wayne (Chief Executive Officer)
Yeah, so for Broadspire, we expect growth this year. So the new business that's coming on, and we brought on a good bit of new business in the first quarter within Broadspire. A little bit, a little bit delayed some with start dates later in the year. But the impact in the first quarter also was due to the loss of that one program that was a little bit larger than normal, which resulted in the 86% retention rate. You know, but for that particular client, our retention rate would have been 93% or so. So you know we, we look at that, that one loss, it's just kind of an outlier related to, you know, relationships that the company had with, with other providers and they had a change in risk management. Those things happen. We win programs that way and sometimes we lose programs that way. That was just kind of an isolated item that we don't think is indicative of any longer term trends in the business. But Broadspire's got a great pipeline and we feel great about that business and look forward to them continuing to grow as they go through 2026.
Mark Hughes (Equity Analyst)
Any observations about the underlying trend and just claims activity, the workers comp claims, the need for claims management, any change there?
Bruce Wayne (Chief Executive Officer)
You know our workers compensation claims year over year held pretty steady. I think, you know, industry wide there's a general decline in comp claims but severity certainly is going up and we're seeing severity increase in, in our book as, as well. So that's what, that's what we're observing.
Mark Hughes (Equity Analyst)
How about the US Property and Casualty, the Global Technical Services? I think outside of the weather related claims look like you held steady in US Property and Casualty. What are you seeing in gts and then how do you think about recruiting? I think you mentioned the word aqua hires.
Bruce Wayne (Chief Executive Officer)
Yeah. What's the prospect in 2026 there? Yeah. So you know a lot of our GTS growth in the US in particular has come from, from acqui hire where we've been recruiting teams and bringing them into, into Crawford to you know, to serve our clients. And typically they bring a book with them as well. So that's really driven a lot of growth in the, in the US we are active in that recruiting or acqui hire initiative across the globe. It's not just centered in the U.S. we're doing it, we're doing it around the globe as well. And we see, you know, global technical services overall, not just within the U.S. but as a global proposition, as one of the key growth drivers for us going forward.
Mark Hughes (Equity Analyst)
And then unallocated corporate, you had, it looks like a bump in self insurance expense. How much was that? I think you referred to a little higher administrative payroll. When you take those into account, how does that trend in the coming quarters?
Bruce Wayne (Chief Executive Officer)
Yes, so that was about 800,000 in the quarter and I think trend in the coming quarters, I think it's probably, you know, no major increase expected. Okay, all right, very good. Thank you very much. Okay, thank you Mark.
Dustin (Conference Operative Facilitator)
Thank you again. If you'd like to ask a question, please press star and the number one on your telephone keypad Our next question comes from the line of Kevin Steinka from Barrington Research. Please go ahead.
Bruce Wayne (Chief Executive Officer)
Thank you. Good morning. Hey, good morning, Kevin.
Kevin Steinka (Equity Analyst)
I wanted to start off by asking about, in your prepared comments, you mentioned encouraging pipeline activity. And I believe you, you kind of tied that to your, the, your updated go to market strategy under the, the new segment operating structure. So maybe just any comments on initial traction you're seeing with the go to market strategy and what sort of opportunities you're seeing in the pipeline?
Bruce Wayne (Chief Executive Officer)
Yeah, so we do have a very strong pipeline and it's a lot of it's related to the change in the operating structure in the US where we've unified our sales organization in the US to be not just related to broadspire or US loss adjusting or networks, but it all comes together into one unified whole. You know, we're in the, we're still in the process of bedding in all of our process changes and organizational changes and go to market strategies and approaches in the business. But we are seeing recognition in the marketplace of the benefits of a unified go to market approach. We're hearing that from our customers who see us as easier to engage and do business with. And it allows us to bring kind of the full strength of our service solutions to our customers in solving their underlying needs and objectives. And that's the whole reason for doing this. So it's going to allow our teams to operate faster and more efficiently in serving our clients and provide a more integrated client experience. And you know, we think that the benefits are just beginning to unfold and are really quite excited about this change in the U.S. we think it's going to deliver, you know, sustained value as we move forward through, you know, this year and into the future.
Kevin Steinka (Equity Analyst)
Okay, that's helpful. And when we think about the pipeline activity as well as the $24 million in new and enhanced business that you won in the quarter, any particular segments that you're really seeing increased activity? Should we think about that as mostly broadspire or is it kind of more broad based across the segments?
Bruce Wayne (Chief Executive Officer)
You know, I would say that our strongest pipeline is within broadspire. The pipeline is building within the US and property and casualty business as well. And we see that continuing to strengthen in terms of the winds, a mix of broad spire WINS, A few U.S. property and casualty wins. And then we had a nice win in our international segment as well. That made up the 24 million.
Kevin Steinka (Equity Analyst)
Okay. And I think the changes you made with go to market were you talked about primarily in the US but have there been any tweaks in the international operations segment as well. You just mentioned a win there internationally. So just wondering if you've kind of changed up the approach at all there as well.
Bruce Wayne (Chief Executive Officer)
Yeah, I mean we're within the realignment that we did. We moved Canada, which was previously in our North America loss adjusting segment, we moved that into international. So now all non US operations are in our international segment. You know, I would say that the go to market approach change has been most pronounced in the U.S. because in the U.S. as you remember, we were operating under as 3 distinct segment operations. And you know, in international they were one business before, they just have another component that got added to them. But their go to market approaches, if you were in the UK it was a UK business approaching the UK market as one that was the same last year and it hasn't changed. I would say that the overall thing that we're doing within the company and it touches all aspects of our operation is being conscious and working to be more client centric and putting, you know, our client success at the forefront of everything that we do and making client success are North Star and driving that culture within the company is something that's transcending all aspects of our operations. But you know, the core go to market approach in international is largely unchanged.
Kevin Steinka (Equity Analyst)
Okay, great. Yeah, that makes sense. So you know, you've been talking about the industry wide level of outsourced claims activity being down just due to the more benign weather. But any updated thoughts on some of the affordability pressures you've talked about before in the US Just the residential property market. Any signs maybe of loosening there in the industry?
Bruce Wayne (Chief Executive Officer)
Yeah, I think there's certainly signs of loosening particularly in the property market in the US we saw that kind of exiting 2025 I think in the renewal cycle so far in the first quarter rates are continuing to, to grind down and you know, from everything that I see, it's starting to impact the casualty lines as well. So as you know, property rates have been coming down. I think the carriers are looking at, you know, the casualty lines to compete in and that's starting to put downward pressure on rates and you know, the excess and surplus market is softening as well. So I see, you know, kind of that kind of hitting the, you know, the softening, you know, kind of across the board in the US maybe accepting certain, you know, really, really troubling lines. But generally we're seeing, we're seeing softness. As you know, in the first quarter in the US Property and casualty we had, you know, we were impacted by, you know, the lack of carryover of claims coming from, you know, hurricanes that didn't occur in 4Q25, and we had some carryover from Hurricanes Helene and Milton that didn't repeat. And you also had some capacity in the, in the market, in the marketplace that kind of had our revenues and earnings down quarter over quarter. But, you know, in March and certainly through April, we're seeing, you know, the severe convective storms in the US Generate, you know, a lot of claims. And, you know, those are, those are certainly, you know, coming into the market and benefiting us as we, as we sit here today.
Kevin Steinka (Equity Analyst)
Okay. That's a helpful update. I appreciate you taking the questions. I will turn it back over.
Dustin (Conference Operative Facilitator)
Thank you. We have reached the end of question and answer session. I will now turn the call back over to Mr. Sway for closing remarks. Okay. Thank you, Dustin. And thank you to all our employees, clients and shareholders for your continued commitment to Crawford and Company. I hope you all have a great rest of the week. Thank you. Thank you for participating in today's Crawford and Company conference call. This call will be available for replay beginning at 11:30 AM Eastern Standard Time today through 11:59 PM Eastern Standard Time on May 12, 2026. The conference ID number for the replay is 7962074 and the pound sign. The number to dial for the replay is 1-800-770-2030. Thank you. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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