Good day, everyone, and welcome to the Verisk Analytics Second Quarter 2017 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 EVP of Investor Relations, Mr. David Cohen. Mr. Cohen, please go ahead.

Thank you, Patrick, and good day to everyone. We appreciate you joining us today for discussion of our second quarter 2017 financial results. With me on the call this morning are Scott Stephenson, Chairman, President and Chief Executive Officer; Mark Anquillare, Chief Operating Officer; and Eva Huston, Chief Financial Officer. Following comments by Scott, Mark and Eva highlighting some key points about our strategic priorities and financial performance, we will open up the call for your questions. Unless stated otherwise, all results we discuss today will reflect continuing operations. The earnings release referenced on this call as well as the associated 10-Q can be found in the Investors section of our website, verisk.com. The earnings release has also been attached to an 8-K that we have furnished to the SEC. The earnings release contains reconciliations of several non-GAAP measures which we will reference on today's call. A replay of this call will be available for 30 days on our website and by dial-in. Finally, as set forth in more detail, in yesterday's earnings release, 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 summarized at the end of our press release as well as contained in our recent SEC filings. Now, I will turn the call over to Scott Stephenson.

Thank you, David. Good morning, everybody. Reported revenue grew 5% for the quarter. Organic constant currency growth was 4.1%. As expected we are seeing the performance progression we discussed on our first quarter earnings call. Profitability remained strong with total EBITDA margins of around 49% and diluted adjusted EPS increased about 12%. When I look at the organic initiatives and recent acquisitions, I'm very encouraged by our people, our assets and the outlook. Our teams are working hard on all the new solutions in which we are investing. The long-term opportunities remain robust and we are seeing real progress in terms of market demand in our customer interactions. While M&A remains our priority for use of free cash, we were pleased to continue repurchasing our shares in the quarter through our longstanding program. We bought two million shares for a total return of capital to shareholders of $156 million in the quarter. At June 30, 2017 we have $376 million remaining under our share repurchase authorization. We have capacity to make strategically relevant acquisitions as well as additional repurchases. During the quarter we spent $48 million on acquisitions including MAKE which is the leading expert in wind energy data analytics. MAKE is an important complement to Greentech, the solar data analytics business we acquired last year as we round out our capabilities in the renewable energy space. Additionally, as you've seen in the press release yesterday afternoon during the quarter we acquired seven leading aerial imagery companies for a total consideration of around $31 million to support our remote imagery solutions which are provided as part of our Geomni business. The acquisitions position us as a leader in remote sensing and enhance our analytics solutions for the property casualty insurance industry. The acquisitions bring us a talented group of professionals…

Thank you, Scott. First, as you saw in the release growth in insurance picked back up as we expected. As we expand our business which serves the property and casualty insurance industry we have several key themes including vertical Big Data, industry automation and digital engagement. The good example of industry automation introduced recently is underwriters advantage, a single source solution providing detailed underwriting data and accurate rebuild cost estimates for U.K. residential and commercial underwriters and brokers. We've taken our well established U.S. expertise and broadened it to the U.K. through the recently acquired geo-information group acquisition. We're actively working to pursue other international markets as well. More broadly, the solution highlights the process we're making in the U.K. in area which we are excited to continue invest. Progress in the U.K. is also underscored by the success of our annual risk symposium which had record attendance in June. Cyber is another important growth area within the insurance space which we are addressing at the IR and at ISL. As you may recall, we've launched ARC or Analytics of Risk from Cyber which allows insurers to evaluate any commercial policy, measure and monitor aggregations of cyber risk within a portfolio and estimate potential insured cyber losses for portfolios. More recently, ISO launched a cyber-insurance program with enhanced rating variables and coverage options designed to help insurer respond to the rapidly changing world of cyber risk. Building on the work we have done ISO recently launched a process to aggregate cyber data from the industry, a classic application of the vertical Big Data concept. AIIR had a good quarter including nice wins in the cat-modeling space as Touchstone continues its success in the marketplace. In addition, we are seeing growing interest in the solutions we have introduced from analyzere [ph] in the area of acquisitions. While small, we see a long runway for portfolio optimization in casualty event risk management. Finally, AIIR continues to be the leader in the cat bond market which was particularly strong in this quarter providing models for much of the new issuance this year-to-date. Finally, another example of automation is the ongoing rollout of ISO claim search integrations which allows our customers to receive instant access to Central Plains Analytics and insights directly in their claims management systems. This is part of a larger opportunity driven by the availability of the next generation of claim search which provides a platform for an ongoing in steady stream of new analytics enhancements, existing users with the investigation and adjustment of claims but providing real-time alerts and actionable intelligence using state-of-the-art data visualization techniques, response from customers has been very positive. With that let me turn it over to Eva to cover our financial results in more detail.

Thank you, Mark. In the second quarter we grew revenue and EBITDA while also investing in solutions with meaningful long-term potential revenue streams. Our growth in the quarter picked up consistent with our comments on the last earnings call. As we move through the year, we remained confident that revenue growth will continue to improve. Revenue in the quarter grew 5% and organic constant currency revenue grew 4.1%. The press release again has a table to help him in FX or fax acquisition. As a reminder constant currency growth rate excludes the contribution from recent acquisition and reflects current period exchange rate to prior period revenue. Currency hurt revenue results in the quarter by about $7.2 million. And total acquired revenue in the quarter was $12 million including the contributions from our aerial imagery acquisitions and MAKE in the renewable space. Within the decision analytics segment revenue increased 4.2%, organic constant currency revenue growth was 4%. This quarter insurance was the fastest growing vertical and also the largest contributor of dollars to growth. Decision analytics insurance revenue increased 8.8% in the second quarter and organic constant currency revenue growth was 8.4%. Growth was led by strong performance in underwriting and cash remodelling solutions claims analytics growth was good and last on occasion solutions also contributed to growth in the quarter. Energy and specialized markets category revenue declined 0.7% in the quarter a quarter and on an organic constant currency basis of revenue increases point six percent and on an organic constant currency basis revenue increased 0.6%. On an organic constant currency basis with MAC grew in the quarter while the British pound impacted revenue in the quarter we're pleased to see continued improvement in customer demand inside a stabilized energy market. As expected as you know the benefit will be…

[Operator Instructions] Your first question is from Tim McHugh, William Blair & Company.

Thanks. I guess to start off with maybe a two part question on just insurance; how meaningful is the strengthening capacity bonds to the growth that you saw in decision analytics insurance? And secondly, I guess elaborate just why now are you ready to pull the trigger on going more aggressively after aerial imagery?

This is Mark, let me start out Tim. Obviously, the cap on market was robust in the quarter, we continue to be the model choice and as a result that did help us a little bit. But I just want to make sure I don't -- we don't overemphasize how much revenue we get from the cap on market, it's certainly an indicator of kind of the strength of our AIR brand but at the same time we're talking a couple of million dollars over something overly dramatic.

Yes. And Tim, I would just add that if we have not seen any growth in the cap online there, we still would have seen acceleration in the DA insurance growth.

And to your question Tim about aerial imagery, we've really been on this topic for some time now and much of what we've given attention to over the last couple of years have been our analytic methods. And so our machine learned methods for interpreting image sets I think are the best in the world and we've been working on those for a few years. What we concluded was that in order to assume the position that we want to, where this market is concerned we had to complement that excellence with equal distinctiveness with respect to the image sets that are available to us. To-date we've been working with third-parties and so this we see as really the final step in order to be fully prepared to serve this marketplace. And so it's not that we haven't been here, it's that this was sort of the final piece.

Okay, thanks. And then just one quick follow-up. I guess Eva, I think you said insurance you expect faster growth in the second half, is that relative to 2Q and -- or is that first half? Just kind of I guess clarifying what you were saying?

We're just only looking at first half versus second half, Tim.

Okay.

And you know, we prefer to talk about it from an annual basis but that's the way we think about it.

Okay, thank you.

And your next question comes from Jeff Meuler with Baird.

Thanks. On the aerial imagery, the investment that you're talking about is that all incremental on top of the level that you've already been investing in aerial imagery including the amount that you've been spending to source the images from third-parties?

No. So our own efforts at image capture will substitute for, what we have had to spend with third-parties in order to capture images to-date. Now there is a bit of an overlap period here where -- even today we're still being supplied by the third-parties that we put together but in a short period of time basically it will all be our own image capture and therefore these costs associated with the third-parties will go away.

Can you give us any rough order of size in terms of how much is incremental?

Well, I think the way to think about Jeff is, when we're talking about the $100 million investment, that's the -- the M&A of about $31 million plus CapEx, and I think as we're talking about third-parties, that's more on the OpEx side; so I think it's a little bit of apples and oranges. But I think fundamentally as Scott was saying, I mean this is a better way to do it, overall, it's going to be less expensive and we're going to have more control and better imagery.

Okay. And then just going back to the Argus performance and the outlook commentary; I think there were the comments somewhere in Scott's prepared remarks about run rate business contracts, so is this more contracts that are signed and the question is when they go live and you start to recognize revenue or is this pipeline that has not yet contracted in terms of what seems to be more delayed than your previous expectations?

It's a combination of both Jeff. So we can see the cumulative effect of what has already been put in place and also anticipating new contracts, particularly in these new segments that I was talking about before; so it's both.

Okay, thank you.

Your next question comes from Hamzah Mazari from Macquarie.

Good morning, thank you. Just a clarification around CapEx; is it fair to say that Verisk is in a multi-year elevated CapEx cycle? You guys pointed to $100 million spread over two years but then you threw out the 2021 figure of 6% of CapEx. So just maybe a little more color after 2018, is it still elevated that CapEx spend and it just goes down in 2021 or any color would be great there.

Well, so there are a couple of layers in there. Thank you for the question. I think maybe I'll start by saying sort of prior to the discussion of the $100 million investment in aerial imagery of which remember 30% of that is M&A, $31 million and the remainder is CapEx, so we're talking about that across 2017 and 2018, that's -- before that what you know is we've been re-platforming our business and we were already starting to work our CapEx percentages letting it down. This is something that will sort of elevated for '17 and '18 but our expectation is that we will continue on that downward trajectory, this is just a layer on top of the path that we already discussed.

Great, that's very helpful. And then just a longer term question, maybe if you could frame for us what catalysts investors should look for the company to have greater penetration internationally outside of energy? Is it simply that data analytics markets need to develop more overseas or is there anything else that you are hearing from your customer base that could be relevant? Thank you.

No, I mean it's -- there is no single effect but the rest of the world is the same as the United States in the sense that data analytics is what companies are doing, you know, companies inside of our vertical markets are working on today; so it's really just a matter of us being present and presenting credentials and we're very encouraged by the engagements that we've been able to generate in 2017 with names that didn't used to be on our customer list. And it's just that it's steady march that will get us there but there is nothing fundamentally different about the rest of the world; I mean there may be some differences in terms of regulatory structure and that can have some effect on market structure but overall, it's really -- it's the same thing. No, it's not a matter of catalysts, it's a matter of us being present, bringing our great intellectual property into these markets and finding our place.

Great, thank you.

Our next question is from Manav Patnaik with Barclays.

Thank you, good morning. First question just to clarify a couple of things on the aerial imagery investment; so in terms of the revenue opportunity -- you've been working on this since 2014, you talked about $200 million TAM on the insurance side I guess. I was wondering if you could just have us frame what that revenue penetration looks like for you guys today? And just to clarify, the $70 million is '17 and '18 but after that what should the run rate look like in terms of spend there?

Yes, so we've accessed less than 5% of that TAM today. So we're -- this is the opening minutes of the first quarter. We've been working on our methods for a long time as I responded to Tim's question but we feel like we've put the final piece in place here. But we've accessed 5% or less actually of that TAM, so very, very early days. With respect to the CapEx profile, there will be a sustained tail of CapEx because essentially the infrastructure necessary to generate these image sets always has to be refreshed but as Eva was mentioning before with respect to CapEx, '17 and '18 are kind of this bubble and then we come down to substantially lower sustained levels to essentially keep this network in the United States operating in perpetuity.

Okay. And maybe just one question to Eva, last quarter you guys talked about 7% to 8% as your target for financial plus insurance, clearly it sounds like that's not going to be meet because of financial; would you be willing to give us what that range would look like now?

Yes, you're right. Because of the discussion we've had around financial which -- we're still very encouraged by the business overall but I think in 2017 it's not going to show the type of growth that we would need to get to that target that we had talked about earlier. So I think as we've talked about insurance we expect that to continue to accelerate in the second half, we feel very good about it. So that's kind of where we set.

7% to 8% is still the reference benchmark for us, nothing has changed, we're simply talking about quarters here.

And your next question comes from Jeff Silber, BMO.

Thanks, good morning, it's Henry Chien. I just had a question, it's a follow-up question on the aerial imagery space; is this -- in terms of how you're building up your aerial imagery business, is the focus still on the insurance end market where you also position being the data and the services to other end markets and just any thoughts on how you plan to position this future aerial business?

Yes, so I think couple of questions in there. This capability will serve more than the insurance market but the insurance market is a primary consideration for us simply because of the nature of the business that we do but in fact there are marketplaces today consuming the analyzed output of aerial imagery which are larger than the insurance used cases and we intend to tap those markets as well; so it's really -- it's genuinely at both end and the way we think that we're going to win, the way that we are making progress today is basically a combination of great data which is what this announcement about the aerial imagery capture program is about combined with leading analytic methods, and you also have to build great workflows so that the customers can easily ingest the data in the analysis, we've got all that and we are actively presenting credentials in the market today and very encouraged by what we're saying.

Okay, that's great. And just a follow-up question; on the gross margins, it looks like it's been trending downwards, is there anything that's been driving that?

I mean I think you're probably seeing some impact of some of the acquisitions in that.

Okay, alright. Thanks so much.

Your next question comes from Andrew Jeffrey with SunTrust.

Good morning, it's Oscar [ph] for Andrew. So I was just wondering can you provide any color on the competitive environment in Argus, has anything changed there?

No, nothing has changed there. No, we still have a very unique position inside of the banking ecosystem with respect to the data asset that we have, nothing has changed.

Okay, thanks. And then just as a follow up, we've seen an uptick in the pace of M&A recently though it has been somewhat smaller deals; how should we think about your M&A strategy going forward in terms of size, vertical and geography?

So we -- our history at Verisk has been, we have created a lot of value for our shareholders through the program of M&A and the reason that it has created values is that it is tightly linked to our strategy; so we start from within the customer markets that we serve with a deep understanding of what they need and what their emerging needs look like, and from that we derive our strategy and from that we ask questions about should we build it or should we buy it, that's the way we've always done and that's the way we will continue to do it. We're not doctrinaire [ph] about the amount that we spend on M&A, we're not doctrinaire about the size of the deals, what we're looking for are things which fit our strategy. The strategy is tightly yoked to two things; one is the vertical markets we're serving, and the other is the four distinctive that we always talk about, and those are really the criteria that we use at those and financial metrics to look at potential acquisitions. So we're on the same course that we were always on, and so with respect to expectations going forward we will continue to lean into the M&A agenda, we will continue to lean into the share repurchase program; and the amount of transactions at any given moment will be a function of mostly kind of availability and we do a lot of cultivation and things take time but I think you can look to us for a very steady stream of acquisitions into the future.

Okay, that's helpful, thanks.

And your next question comes from Bill Warmington with Wells Fargo.

Good morning everyone. So first question for you on Wood Mac, you had pointed out that the growth -- on an organic basis constant currency up about 0.6% but it's actually little better than that because EHS was negative against it. So I wanted to ask whether you were seeing -- what you were seeing on the renewables, whether you're seeing on the dollar value, were you seeing price improvements, expansion; what's driving the growth there?

Yes, it's -- we're very encouraged by what's happening with the subscription revenues, that's real-time business and that is as with the way that we face-off with our customers and all vertical markets, when we come to a renewal moment it isn't just a sort of a raw question of price increase on what they were using previously; first of all, our products are always sort of dynamically changing but in addition to that we sort of bring bundles. So when we look at -- what we're paying attention to Bill is the subscription amounts associated with existing customers and obviously with new customers as well. And there has been very nice progression in terms of those subscription revenues. As Eva pointed out because we signed multi-year agreements it will take a little while for the full effect of what's happening right now to show up on the revenue line but it's progressing nicely. And as I said, just to be clear about this; you know, inside of the resource and energy world we don't need the commodity to be -- for example, if we're talking about the oil commodity we don't need it to be at the record highs, it was at a few years ago, we just need our customers to be stable and looking to the future which is actually kind of where we are now. There has been a tremendous reduction in breakeven inside the industry and so it's -- we just need stability and essentially there is stability at this point; so we're enjoying what's happening in that business.

Okay. And then a clarification on the 7% to 8% constant currency organic target for the total insurance including and plus financial services. When we talked about this in early May, at that point it looked like about two-thirds of that target was under contract and about one-third was coming from new sales; and I just wanted to check whether we were still on-track for that for the year and I wanted to also -- I mean, back at the envelope it looked like that combined organic constant currency was somewhere in the 4% to 5% range for the second quarter, that's my math and I know your math is better than mine; so I just wanted to check that.

All right, there were like seven questions in that.

Sorry about that.

So I'll start with the last one first, organic constant currency and buying insurance and financial in the quarter was 5.1% and that compared to 4.9% last quarter so there was a progression there. Going back maybe to the top, a clarifying point was the one-third, two-thirds comment you made, that was the comment we made specifically around insurance last quarter and maybe after I get two more of your questions I'll have Mark make a comment on how we're progressing on that. With regards to the combined targets for financial and insurance, you know, going back to the comments that Scott and I made, financial in 2017 because of some of the dynamics we talked about [indiscernible] level we had expected for -- so I would say that when we look at that combined target that we talked about that is not something that we're looking at because of the financial performance that we're now expecting in 2017. So let me comment on how we're progressing on the insurance side.

As we demonstrated in the second quarter, we feel like there is a ramp inside of insurance and we were just kind of reinforce second half versus the first half. One of the metrics I think we tried to provide during the first quarter call was the element of how much of the contracts or how many additional growth was relative to committed contracts and things that will be happening because of a commitment and signed contract versus go get your pipeline; and I think you feel good about the progress we've made over the course of quarter and that number is even more positive today. So I'm comfortable with at least the progress we're making.

Got it. So I understand we were saying now on the 7% to 8% target; did you want to give us a revised target for that combined segment for 2017?

I think Scott's described well the dynamic and financial and for insurance that we've talked about acceleration into the second half.

Yes, and we expect progress as the year goes on and the target remains the target and it's just a question of timing.

Got it. All right, well thank you very much and I appreciate your patience through all the questions.

Thank you, Bill.

Your next question is from Andrew Steinerman with JPMorgan.

Good morning. Eva, EBITDA margins were down year-over-year in the first half for the year in 2017; might we see EBITDA margins down in the same or more in the second half of the year, year-over-year and when should we get back to margin expansion?

Andrew, thanks for the question. If you were to look at what we -- what I found on the call with regard to margins, I think if you look at second quarter and think about the year I mean that's kind of where we are, we've got a couple of things going on there. Obviously, we've talked about the beginning of the year some of the investments that we're making in the business, we continue to make those; we're excited about those. We now have brought in some acquisitions, you know, I did mention for you some of the revenue in EBITDA and those acquisitions, those are smaller margins of our existing business and so that was over the call for this year. But as -- you know, I've said before, we continue to be constructive on margins over the long-term.

Okay.

And our next question is from Arash Soleimani with KBW.

Thanks, good morning. So one question you mentioned in your prepared remarks a bit about cyber; I was just wondering, obviously cyber is still a relatively young insurance market are you seeing pretty large appetite from your insurance carrier clients to grow that line?

This is Mark. I think one of the things that every insurer is looking to do is grow and cyber offers that opportunity in a world where premiums and rates have been relatively soft, cyber offers that opportunity. The challenge is it's tough to quantify that risk, actually understand what you're underwriting and how big it could be especially with all the cyber-attacks and the exposure that's out there. So there is -- you know, I call an under -- uninsured opportunity here and everyone's looking to try to seize on that. We have done several things that I think are responding to that need. We have typically focused on insurance and are sure of customers or reinsurers and you kind of heard some of the things from CAT [ph] models to actually programs and coverage forms that -- were aggregating data to better improve the last cost, we're going to try to put out what we refer to as like -- we typically have these building underwriting [indiscernible] kind of have a similar type of report or businesses. The theory is that both from a risk by risk and a portfolio perspective we can provide a lot of solutions to our customers that need support in writing this risk. Last comment, this is the type of risk if we do it right has the ability to kind of lag outside of insurance and into the corporate market. So it provides even a bigger TAM and bigger opportunity if we do it right; so we are excited about the opportunities here and we're working hard to be the first or at least first to market.

Thanks, that's helpful. And the other question is, was there anything unusual in the tax rate this quarter; it seemed a bit lower than usual?

As I mentioned, remember we have this new approach from an accounting perspective to how we have to write for the benefit for stock option. So you're going to see a bit more variability across the quarter and that's what you saw in this quarter for the tax rate that we still think for the year we're going to be looking at 32% to 33%.

All right, great, thanks for the answers.

You're welcome.

Your next question comes from Tony Kathleen [ph] with Morgan Stanley.

Hi, good morning. You've talked a lot about financials so far but I'm not sure I have a great idea of the growth expectation in the second half for this segment, you're facing sort of mid 20's comps organically but you do have the large contracts in the pipeline that you're expecting to come on later in the year. So basically I'm just trying to understand how much of these large contracts contribute to growth and just facing the tough comps, I'm just trying to get a sensed directionally of how we should be thinking about financial?

Yes, so we expect it to grow in the fourth quarter, more in Q4 than Q3.

Okay. And basically should Q3 be -- should we be thinking positive organically or how should we be thinking about that?

I mean that's kind of where I'm going to leave it with you Tony [ph], it's just -- it's progressing from where it was in the second quarter and the second half will net out to growth and it will be more Q4 than Q3.

Okay. And then Mark I think talks about the changed profile of revenue in Argus; I'm just trying to understand are there different types of products that customers are demanding or have you just changed the structure of the contracts for the existing products. Just any examples of maybe changes in purchasing behavior if there are or just what's going on? Thanks.

Yes, so there were a couple of -- this is Scott, there were a couple of comments that we made on that. So as we've expanded the products that we've also moved to a new set of customers, so actually you have both effects going on at the same time and the new solutions take on somewhat -- some of the new solutions taking on somewhat different shape and profile than say the consortium based products which were the ones that really -- you first got to look at, that was most of what you were seeing when you were looking at Argus 2012-2013, they have the same kind of recurrent quality as many, many of the things we do around Verisk but as we moved into new solution sets, for example, media effectiveness; the nature of the engagement with the customer which is a different customer takes on a different profile where there is sort of an intense engagement as you get started because we have to integrate datasets with datasets in order to be able to create the analysis that we're looking to do which then you come off that high somewhat as you move into then a recurrent relationship. And so that shape is different than the shape of what the Argus business began with inside of the consortium model. So as we move to new solutions we also move to new customers and those new solutions that's for those new customers do have a somewhat different profile but extremely good business; the difference that we can make, the value that can be added is substantial.

Perfect, thanks Scott.

And your next question comes from Joseph Foresi with Cantor Fitzgerald.

Hi, this is Mike Creed [ph] on for Joe, thanks for taking the question. I wanted to go quick back to what the long-term margin opportunity was and would that come from less acquisitions and lowered investments or are there other leverage there?

I think as you think about our business model it all comes from the top line growth and as we're investing, we're working to enhance that top line growth and I think you'll see that scalability. I think similarly with our acquisition and you've seen the acquisitions we're bringing in, they are not all at our margins today but they also are growth opportunities, and so as we start to scale that I think you'll just see that naturally fall to the bottom line as you have historically.

Okay, great. And then -- you think there would be any seasonality margin-wise between Q3 and Q4, probably not much?

I don't think that's a typical period in which we see seasonality. I mean there is always variability but I don't think there is anything specific I'd call out.

Okay, great. Thanks.

Thank you.

And your next question comes from Alex Care [ph] with UBS.

Good morning. I hope this question is not too detail but I wanted to just ask about subscription growth in the quarter. Now when I look at your subscription disclosures in the 10-Q and I backed into the implied growth, the 2Q had less than 1% subscription revenue growth in decision analytics and I think all the growth came basically for non-subscription growth; I think it's about 16% by my calculation and I think subscription was as flat in the first quarter too. So I know there is a lot of moving pieces, effects, acquisitions, the different business but I guess if I just step back and look at this more holistically, it looks a little bit more like the business is becoming much more dependent on one one-time sales and maybe the subscription would have stalled. So again, a lot of moving pieces but maybe you can elaborate how you would look at that?

Yes, I mean -- I think if you -- you kind of have to unbundle it and I think there is a reasonable impact from the comments we've made around Argus. Those long-term contracts that did not renew at the end of last year as expected, those were subscription on long-term contracts; so I think part of the impact we're seeing relates to that. I can circle back with a little more detail later on but I would consider that in your analysis.

Okay. So still very comfortable, obviously, that the subscription core is positioned for steady growth.

Absolutely.

That is -- those are own beat inside of our company.

All right, good. And then but secondly, and maybe related to the same data. I think Eva, you kind of rushed a little bit for the cap-ons [ph] answer there when somebody asked early and you said, a couple of million, again, by just backing into the non-subscription goals, I think I get to $11 million, I guess it is adjusted as well but where is that $11 million coming from if it's not the cap-ons [ph] strength, what other kind of like non-subscription items contribute at this quarter that you may want to cause?

Sorry, I'm not sure I know your $11 million reference but let me go back to what Marc said about cap-on from what I said, I think Mark said he didn't want to overstate the size of the business, it's millions of dollars, not tens of millions of dollars. And the comment that I made I think in response to Tim's question was that even if we were to assume that, so cap-ons obviously grew nicely in the quarter but even if we were to assume that we've got no dollar growth in cap-ons this quarter, you still would have seen an acceleration in decision analytics insurance growth. So the comment I was making was really just trying to -- I mean we're excited about it, we love to get cap-on revenue, it's great but I just wanted to make the point that the strength of the business was not solely related to the cap-on market. Hopefully that helps.

Yes, there is always a first time. Thank you.

Thank you.

And your next question comes from Anjaneya Singh with Credit Suisse.

Good morning, this is Nick Ryan [ph] on for Anjaneya, thanks for taking my questions. Now that you've kind of made the last step if you will, on aerial imagery, can you maybe just update us on what the competitive landscape looks like for you guys, now that's a sort of bigger focus and maybe any sort of estimates on the margins today and/or where they could go overtime?

Yes. This is Scott. There is -- in the insurance marketplace there is one primary competitor and outside of the insurance marketplace it's actually a fairly unconcentrated sort of long list of companies that provide that are small-ish that provide a fraction of the services that we're interested in. So that's really sort of the nature of where it says and one of the things about being in the insurance vertical is that the analyzed output from remote imagery needs to get put into platforms where the customers then make decisions based upon the remote imagery derived analysis and a lot of other inputs as well. We are the provider of most -- we are the leading provider of many, if not most of those platforms and so it's one of the reasons why we feel that we have a winning proposition that is going to take its place.

Okay, great, thank you. And maybe just any commentary around where you estimate the margins are today and maybe where they are expecting to go?

Well, this is like most of the things that we do. We'll show a lot of scale as it grows, you have the semi-fixed cost of creating your datasets and you have the semi-fixed cost of the tech stack that you build to do the analysis. And so as this business grows we expect the margin characteristics to materially improve.

Okay, great, thank you.

And your next question comes from Gary [ph] with RBC.

Thanks, good morning. First question, just on the margins; Eva, did I hear you right that the margin for the full year approximates the second quarter? And if so, it -- given the margins were stronger second half versus first half a year ago, it seems to imply quite a bit larger contraction in the next few quarters, is that just the impact of the recent M&A or is there some other stepped up investment elsewhere you're expecting?

Yes, we haven't shifted our investment plan for the year so I would say that a lot of that impact you're seeing really relates to M&A. And maybe just kind of moving back to the question before; on the inorganic side on aerial imagery, I gave you the data points in a script that the companies that we acquired in 2016 had about $15 million, about $2 million of EBITDA, so I'm kind of doing the math on that, even that will have some impact in the short-term.

Okay, great. And then the follow-up; just on the longer term 7% to 8% organic revenue framework that you've discussed, how are you thinking today about the energy business long-term potential; at the time of the deal it was definitely above that. I think you've indicated tempering that and I guess relevant to what's going on now, how do you think about financial services against that that long-term framework? Thank you.

So first of all, we haven't tempered that view with respect to the resources and energy business. So we remain in the same place, we actually have a wonderful franchise and many different ways that we can grow it; so we actually haven't tempered that franchise. And you asked about financial services, you know, our believe is that it has the potential to exceed the corporate average as well.

Great, thank you.

Your next question comes from Kevin McVeigh, Deutsche Bank.

Great, thanks. I wonder if you could train or just the longer term frame, what the potential opportunity could be around fraud as you make those investments within [indiscernible], you know, what type of growth driver that could be for the business?

Yes, so fraud is one of those persistent issues that never goes away, it's actually a topic that we like and it's one that I think you all know we give a great deal of attention to in the insurance vertical. And so what you're basically counting are many basis points against very, very large transaction volumes. And then what modifies that view of TAM a little bit is the degree to which our customers consider fraud a cost of doing business versus an opportunity to get after. In the insurance vertical, it's pretty well established that fraud is a category to go after. And our view is that in the financial services vertical it is increasingly viewed the same way and what's really needed are precise tools that create great confidence that you're actually getting after something and that the gains that you get will persist. And so we believe it's a very large marketplace and it's a very small part of what it is that we do in financial services today; so it's a very good theme for us.

Is that tied in Scott with kind of the cyber or those kind of -- do you do them jointly or are those independent?

So Mark, if you want to talk about cyber again -- although Mark's comments about cyber; first pass relate to the insurance vertical but there is -- if you want to call it kind of a cyber-dimension, so for example, G2 web services, if you take the opportunity to look into that a little bit more, this is basically about diligencing online merchants and I won't sort of go into the specifics today but it is about trying to find sort of bad actors and maybe you wouldn't call it fraud exactly but it is about trying to find bad actors. And then Mark, do you want to add anything with respect to cyber?

Well, I mean -- let me hit the cyber as well as the other things we do; I think there is a general theme that we've always found there is high correlation to the extent that you have bad guys that operate across a lot of spaces, we have the opportunity to find more fraud to the extent that we have a broader set of databases; so the extent that you think about all the insurance claims that are inside of our database we've brought in healthcare which is kind of improved through the accuracy and the ability to fight fraud. Cyber is another dimension and to the extent that we can gather some information with all the proper approvals around some of the credit card fraud that happens, I think we would be more effective at finding fraud across these different communities of interest; so that's a general thing we have and I think it's a positive one.

No, that's a good point. Thanks.

Great, thank you.

And management, I'd now like to turn it back over to you for closing remarks.

Okay, well thanks everybody for your time today and for your interest and I know we'll be talking to many of you in the days and weeks following this; and we look forward to bringing you our third quarter in a few months. And -- so again, thanks for your time today.

Thank you. And this does conclude today's conference call. You may now disconnect.