Crawford Profit Rebounds as Margins Widen
Revenue before reimbursements reached $321.4 million, up 3.8% sequentially despite remaining nearly flat from a year earlier.
Crawford & Company (CRD-A), the claims-management provider, reported second-quarter net income of $13.4 million, rebounding from $4.9 million in the first quarter and a $7.2 million loss in late 2024.
The quarter marked a profitability inflection after two weaker periods. Adjusted operating earnings more than doubled sequentially to $29.4 million and rose 34% from a year earlier, while the adjusted operating margin widened 240 basis points to 9.2%.
Revenue before reimbursements was nearly unchanged from $323.0 million a year earlier. Constant-dollar revenue fell 3%, matching the first quarter’s decline but improving from a 12.2% contraction in the fourth quarter. Non-GAAP diluted earnings rose 73% to $0.38 a share from $0.22 a year earlier.
Broadspire supplied much of the improvement. Revenue rose 1.2% to $109.4 million as medical-management revenue joined disability claims as a growth driver, while operating earnings increased 10.8% to $15.7 million. Its margin reached 14.4%, up from 10.4% in the first quarter, alongside an improved retention rate of 87.5%.
International Operations also strengthened, with revenue rising 4.2% to $138.0 million and operating earnings increasing 48.2% to $10.9 million. Weather activity in Australia and Asia and improved Canadian performance lifted the segment’s margin to 7.9% from 5.5% a year earlier, though disposals of Crawford Legal Services operations reduced revenue by $4.1 million and produced a $1.3 million loss.
U.S. Property & Casualty remained the main drag as revenue fell 10.2% from a year earlier amid fewer weather-related claims, lower Catastrophe Services staffing and weaker Contractor Connection referrals. The decline moderated from 11.3% in the first quarter, and the segment’s margin improved to 9.7% from 9.0% a year earlier.
Lower compensation costs helped SG&A decline $8.7 million despite a $2.3 million software-impairment charge. Crawford generated $7.9 million of free cash flow during the first half, up from $2.6 million, and spent about $9.0 million repurchasing shares. The board also raised the quarterly dividend 6.7% to $0.08 a share, extending the quarter’s earnings recovery into higher shareholder distributions.