Core Insights - Conestoga Capital Advisors sold 3,896,749 shares of CCC Intelligent Solutions for approximately $37.69 million, reducing its stake in the company [1][2] - Following the sale, CCC Intelligent Solutions now represents 1.55% of Conestoga Capital's 13F AUM, indicating it is no longer among the fund's top five holdings [3] Company Overview - CCC Intelligent Solutions Holdings Inc. has a market capitalization of $5.93 billion and reported a revenue of $996.96 million with a net income of $1.92 million for the trailing twelve months [4] - The company's shares were priced at $9.10 as of October 23, 2025, reflecting a 17.87% decline over the past year [3][4] Business Model and Services - CCC Intelligent Solutions is a provider of AI-enabled SaaS solutions for the property and casualty insurance sector, employing over 2,300 staff [5] - The company offers a comprehensive SaaS platform that includes cloud, mobile, AI, telematics, and analytics solutions, aimed at automating workflows and digitizing processes for insurance carriers and repair shops [8][9] Financial Performance and Challenges - Despite a strong second quarter revenue growth of 12% year-over-year to $260.5 million, the company has faced challenges, including a reduction in its 2025 revenue forecast to between $1.046 billion and $1.056 billion due to declining insurance claims [11][12] - As of the end of Q2, CCC held a significant amount of debt totaling $996 million against cash and equivalents of $55 million, raising concerns about its financial stability [12] Investment Considerations - The mixed financial outlook, characterized by rising revenue but substantial debt and industry headwinds, may have influenced Conestoga Capital's decision to reduce its stake in CCC Intelligent Solutions [13] - Investors are advised to await CCC's Q3 earnings report on October 30 before making further investment decisions [13]

Core Viewpoint - CCC Intelligent Solutions Holdings Inc. will change its ticker symbol from "CCCS" to "CCC" effective October 31, 2025 [1] Company Summary - The company's common stock will continue to be listed on NASDAQ under the new symbol "CCC" [1] - No action is required from stockholders regarding the ticker symbol change [1]

Core Perspective - The discussion highlights the significance of CCC as an iconic company that has successfully navigated over 40 years of technological evolution and transition in the insurance industry [1] Group 1: Technology Transition - The conversation emphasizes the ongoing car technology transition and its implications for the insurance industry, drawing parallels to previous transitions such as cloud computing and multi-tenancy [1] - The company has invested considerable time and resources in adapting to these technological changes, indicating a proactive approach to industry evolution [1]

Core Perspective - The discussion highlights the significant evolution and transition of technology within the automotive sector and its implications for the insurance industry, drawing parallels to previous transitions such as cloud computing and multi-tenancy [1] Group 1: Technology Transition - The company has successfully navigated over 40 years of technological evolution and transition, indicating a strong adaptability to changing market conditions [1] - The conversation emphasizes the importance of understanding the current car technology transition in relation to historical transitions, suggesting that lessons learned can inform future strategies [1] Group 2: Industry Insights - The insurance industry is poised to experience substantial changes due to advancements in car technology, which may alter traditional business models and risk assessments [1] - The insights from industry veterans are crucial for comprehending the broader implications of these technological shifts on the insurance landscape [1]

Summary of CCC Intelligent Solutions Holdings Conference Call Company Overview - **Company**: CCC Intelligent Solutions Holdings Inc. (NasdaqGS: CCCS) - **Industry**: Insurance Technology Key Points and Arguments Technology Transition in Insurance - CCC has undergone multiple reinventions over 40 years, adapting to technology transitions in the insurance industry, including cloud and AI advancements [4][5][6] - The company emphasizes a deep understanding of customer needs for future planning, with clients making five-year commitments [5] AI Innovations - CCC has made significant strides in visual AI, which involves understanding the three-dimensional complexity of vehicle damage from two-dimensional photos [8][9] - The company has developed a robust AI framework, integrating generative AI models and visual AI to enhance accuracy and customer trust [11] Competitive Landscape - CCC operates in a competitive environment but differentiates itself through a deep understanding of unique industry workflows and a massive dataset of $2 trillion in historical data [15][16] - The company’s tech stack integrates traditional workflows with AI, enhancing operational efficiency for clients [17] Customer Engagement and ROI - CCC's solutions are designed to deliver a 5:1 ROI, driving customer engagement and prioritization of budget allocations [23][24] - The company has not seen a negative impact from competition, as clients recognize the need for integrated solutions within existing workflows [21] Growth Momentum - Emerging solutions have contributed to growth, with a notable increase in the first half of the year compared to the previous year [25] - The company expects continued scaling of its SaaS revenue and cross-sell opportunities [25] Claim Volume Insights - CCC's business model is 80% subscription-based, minimizing exposure to fluctuations in claim volumes, which have seen a decline of 9% year-over-year in Q1 and 8% in Q2 [39][40] - The decline in claim volumes is attributed to customer behavior rather than accident frequency [40][43] Future Outlook - The company anticipates a gradual decline in claim frequency due to technological advancements but believes the impact on their solutions will be minimal [43][44] - CCC is optimistic about growth in international markets and adjacent areas, with plans to leverage its tech stack for future expansion [46] R&D and Operational Efficiency - CCC is applying AI to enhance software development efficiency, reducing prototype development time significantly [47] - The company aims for a long-term margin progression of about 100 basis points per year, targeting mid-40s margins [49] User Interface and Experience - The evolution of user interfaces for AI-driven solutions is crucial, focusing on guidance rather than rigid workflows to enhance user experience [54][55] Additional Important Insights - The IX Cloud Platform connects various stakeholders in the insurance ecosystem, facilitating efficient workflows and decision-making [31][32] - The acquisition of EvolutionIQ is expected to contribute 2% incremental growth to long-term revenue targets, enhancing CCC's capabilities in casualty and workers' compensation [34][36] This summary encapsulates the key discussions and insights from the CCC Intelligent Solutions Holdings conference call, highlighting the company's strategic focus on technology, customer engagement, and future growth prospects.

Company Overview - CCC operates as a SaaS platform primarily serving the insurance economy, focusing on facilitating the auto claims process [2] - The company connects approximately 300 insurance companies with over 30,000 body shop clients and more than 5,000 parts suppliers through its software and AI tools [2] Recent Developments - In January of this year, CCC completed the acquisition of EvolutionIQ, which allows the company to expand its services into workers' compensation and disability claims [2] - The integration of AI and software in the new business segment aims to assist insurance companies in processing disability and workers' compensation claims [2]

Summary of CCC Intelligent Solutions Holdings (CCCS) Conference Call Company Overview - CCC Intelligent Solutions is a SaaS platform serving the insurance economy, primarily focused on auto claims processing, connecting insurance companies, body shops, and part suppliers [3][4] - The company has approximately $1 billion in run rate revenue with margins in the 40% range and a gross dollar retention rate of around 99% [5][6] Key Points Discussed Business Model and Market Position - CCC connects around 300 insurance companies, over 30,000 body shops, and more than 5,000 part suppliers through its software [4] - The company recently acquired EvolutionIQ, expanding its services into workers' compensation and disability claims [5][12] Macro Trends Affecting Clients - Increased complexity in auto claims due to advanced vehicle technology and medical procedures [8][9] - A shift in workforce demographics, with experienced workers retiring and less experienced workers entering the field [10] - Rising inflationary pressures affecting repair costs and medical expenses [10][11] Acquisition of EvolutionIQ - The acquisition is seen as a strategic fit, enhancing CCC's technology stack and providing cross-selling opportunities to existing clients [12][14] - EvolutionIQ's AI capabilities, such as the MedHUB platform, will be integrated into CCC's offerings, particularly for auto casualty clients [15][16] Claims Volume Dynamics - A decline in claims being filed is attributed to consumer behavior rather than a decrease in accident frequency [23][24] - The company reported a 9% year-over-year decline in claims volume in Q1, slightly improving to 8% in Q2 [28] - CCC's business model is 80% subscription-based, which is less affected by claims volume fluctuations [26] Long-term Growth and Market Strategy - CCC aims for a long-term organic growth rate of 7% to 10%, with current performance trending towards the lower end of that range [34] - The company is focusing on emerging solutions, which currently contribute about 4% of total revenue, as a key growth driver [37][38] Product Development and Innovation - The Estimate STP product, which uses AI for claims processing, is currently utilized by over 40 clients but has low penetration in terms of claim volume [59][60] - The company is exploring additional use cases for AI in the claims process to enhance efficiency and effectiveness [66] Financial Performance and Capital Allocation - CCC has improved its margins by about 600 basis points since 2020, with expectations to continue this trend [68][69] - The company has initiated a $300 million buyback program, having utilized approximately $170 million of that amount [71][72] Additional Insights - The company is optimistic about the future, citing a willingness among clients to adopt new technologies and improve operational efficiencies [52][56] - CCC's growth strategy includes evaluating both product expansion and adjacency acquisitions, with a focus on strategic fit rather than deal size [42][43] This summary encapsulates the key points discussed during the CCC Intelligent Solutions Holdings conference call, highlighting the company's business model, market dynamics, growth strategies, and financial outlook.

Group 1 - CCC Intelligent Solutions Holdings Inc. reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.08 per share, with an earnings surprise of +12.50% [1] - The company posted revenues of $260.45 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.59%, compared to year-ago revenues of $232.62 million [2] - Over the last four quarters, CCC Intelligent Solutions has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Group 2 - The stock has underperformed, losing about 16.6% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current consensus EPS estimate for the coming quarter is $0.09 on revenues of $265.31 million, and for the current fiscal year, it is $0.36 on revenues of $1.05 billion [7] - The Zacks Industry Rank for Internet - Software is currently in the top 30% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $260 million, representing a 12% year-over-year growth, exceeding guidance [6][29] - Adjusted EBITDA was $108 million, also above guidance, with an adjusted EBITDA margin of 42% [6][35] - Free cash flow in Q2 was $27 million, down from $36 million in the prior year, reflecting timing of working capital and operating losses from Evolution IQ [36][92] Business Line Data and Key Metrics Changes - Emerging solutions contributed approximately 4 percentage points to total revenue growth, with diagnostics, build sheets, and subrogation being key drivers [30] - Casualty solutions, which represent about 10% of total revenue, are expected to grow significantly, with recent contract renewals and expansions from top insurers [14][15] - AI-based solutions are seeing increased adoption, with multiple large insurers transitioning from pilot phases to full rollouts [11][13] Market Data and Key Metrics Changes - Industry claim volumes in Q2 declined by 8% year-over-year, slightly improving from a 9% decline in Q1 [30] - The decline in claims volumes is expected to continue impacting growth, with a consistent one percentage point headwind factored into guidance for the second half of the year [66][67] Company Strategy and Development Direction - The company is focused on balancing operational efficiency with investment in innovation, leveraging a subscription model and scalable cloud infrastructure [20][21] - The integration of Evolution IQ's AI-powered solutions is seen as a strategic asset, with strong interest from both existing and new clients [16][25] - The interconnected network of over 35,000 businesses is a key competitive advantage, facilitating the deployment of new solutions and enhancing customer engagement [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory, citing the increasing adoption of AI solutions among large clients [6][40] - The operational challenges faced by clients, such as rising complexity in vehicle technology and labor shortages, are driving demand for CCC's solutions [23] - Management remains cautious about the impact of macroeconomic factors but is optimistic about the company's ability to navigate these challenges [58][60] Other Important Information - The company completed a share repurchase of $100 million in Q2, with a total of $172 million repurchased year-to-date under a $300 million program [36] - A new independent board member, Barak Alam, was welcomed, bringing extensive experience in enterprise software and AI [26] Q&A Session Summary Question: Commentary on full year EBITDA guidance - Management noted that the cost base is a function of timing, with a one-time benefit in Q2 not expected to recur in the second half [44][46] Question: Delays in Evolution IQ implementation - Management indicated that some significant deals are experiencing delayed implementation timelines, impacting revenue recognition for 2025 [49][50] Question: Technical changes in the casualty platform - Improvements included a state-of-the-art rules engine and enhanced analytics capabilities, contributing to strong growth and momentum [57][58] Question: Claims volume trends and guidance - Management expects a consistent one percentage point drag on growth from declining claims volumes, which is factored into guidance for the second half [66][67] Question: Broader rollouts of new solutions - Management highlighted that customers are gradually increasing volume through contracted solutions, with expectations for continued expansion [70][71] Question: Claims cycle duration and macro indicators - Management noted that the current claims cycle is influenced by rising premiums and consumer behavior adjustments, with repair costs starting to moderate [75][76] Question: Sales momentum and implementation cycles - Management observed a slight acceleration in sales momentum for emerging solutions, with strong interest in EIQ despite some delays [81][82]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and related notes, along with management's discussion and analysis of financial condition and results of operations [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section outlines forward-looking statements in the Form 10-Q, noting that actual results may differ due to various risks and uncertainties, including revenue concentration and economic conditions - Forward-looking statements are based on current expectations, but actual results may vary due to risks and uncertainties[8](index=8&type=chunk)[10](index=10&type=chunk) - Key risk factors encompass revenue concentration, customer retention, economic conditions, competition, technology development, and regulatory changes[9](index=9&type=chunk) [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed accounting notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This subsection presents the unaudited condensed consolidated balance sheets, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :-------------------------- | :------------------ | | **ASSETS** | | | | Cash and cash equivalents | $55,053 | $398,983 | | Accounts receivable—Net | $132,450 | $106,578 | | Total current assets | $277,705 | $564,650 | | Software, equipment, and property—Net | $170,341 | $172,079 | | Intangible assets—Net | $1,056,418 | $934,278 | | Goodwill | $1,956,485 | $1,417,724 | | Total Assets | $3,565,424 | $3,183,218 | | **LIABILITIES & EQUITY** | | | | Total current liabilities | $200,514 | $154,846 | | Long-term debt—Net | $973,298 | $761,053 | | Total liabilities | $1,429,074 | $1,163,716 | | Total stockholders' equity | $2,136,350 | $1,997,823 | | Total Liabilities, Mezzanine Equity and Stockholders' Equity | $3,565,424 | $3,183,218 | - **Cash and cash equivalents** significantly decreased from **$398.983 million** at December 31, 2024, to **$55.053 million** at June 30, 2025[12](index=12&type=chunk) - **Goodwill** increased substantially from **$1.418 billion** to **$1.956 billion**, primarily due to the acquisition of EvolutionIQ, Inc[12](index=12&type=chunk)[76](index=76&type=chunk) - **Long-term debt (net)** increased from **$761.053 million** to **$973.298 million**[12](index=12&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This subsection presents the unaudited condensed consolidated statements of operations and comprehensive income (loss) for the reported periods Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $260,451 | $232,618 | $512,016 | $459,855 | | Gross Profit | $194,016 | $177,297 | $379,008 | $345,160 | | Operating Income | $24,470 | $22,513 | $13,772 | $30,310 | | Pretax Income (Loss) | $5,797 | $25,752 | $(24,977) | $20,917 | | Net Income (Loss) Attributable to Common Stockholders | $12,960 | $20,224 | $(5,737) | $18,485 | | Basic EPS | $0.02 | $0.03 | $(0.01) | $0.03 | | Diluted EPS | $0.02 | $0.03 | $(0.01) | $0.03 | - **Revenues** increased by **12.0%** for the three months and **11.3%** for the six months ended June 30, 2025, compared to prior periods[14](index=14&type=chunk) - **Net income attributable to common stockholders** decreased by **35.9%** for the three months and resulted in a **net loss of $(5.737) million** for the six months ended June 30, 2025[14](index=14&type=chunk) - **Pretax income** significantly decreased for the three months and became a **pretax loss** for the six months, primarily due to warrant liability changes and increased interest expense[14](index=14&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk)[208](index=208&type=chunk)[211](index=211&type=chunk) [Unaudited Condensed Consolidated Statements of Mezzanine Equity and Stockholders' Equity](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Mezzanine%20Equity%20and%20Stockholders'%20Equity) This subsection details the unaudited condensed consolidated statements of mezzanine equity and stockholders' equity, showing changes over the reporting periods Changes in Stockholders' Equity (in thousands, except number of shares) | Metric | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :------------------ | :-------------------------- | | Common Stock (shares) | 629,207,115 | 648,994,473 | | Common Stock (par value) | $63 | $65 | | Additional Paid-In Capital | $3,094,182 | $3,409,623 | | Accumulated Deficit | $(1,095,227) | $(1,272,181) | | Total Stockholders' Equity | $1,997,823 | $2,136,350 | - **Common stock shares** increased from **629.21 million** to **648.99 million**, driven by compensation, option exercises, and acquisitions, partially offset by repurchases[16](index=16&type=chunk) - **Accumulated deficit** increased from **$(1.095) billion** to **$(1.272) billion**, reflecting net losses and share repurchases[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This subsection presents the unaudited condensed consolidated statements of cash flows, categorizing cash activities into operating, investing, and financing Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $101,548 | $107,009 | | Net cash used in investing activities | $(445,682) | $(31,224) | | Net cash provided by (used in) financing activities | $167 | $(33,328) | | Net change in cash and cash equivalents | $(343,930) | $42,321 | | Cash and cash equivalents, End of period | $55,053 | $237,893 | - **Net cash used in investing activities** significantly increased to **$(445.682) million**, primarily due to the **$415.1 million** acquisition of EvolutionIQ, Inc[22](index=22&type=chunk)[247](index=247&type=chunk) - **Net cash provided by financing activities** turned positive at **$0.167 million**, driven by **$225.0 million** in incremental term loans, partially offset by **$172.5 million** in common stock repurchases[22](index=22&type=chunk)[248](index=248&type=chunk) - Overall **cash and cash equivalents** decreased by **$343.9 million**, resulting in an end-of-period balance of **$55.1 million**[22](index=22&type=chunk) [Note 1. Organization and Nature of Operations](index=14&type=section&id=Note%201.%20Organization%20and%20Nature%20of%20Operations) This note describes the Company's corporate structure, business, and the nature of its SaaS platform offerings for the insurance economy - CCC Intelligent Solutions Holdings Inc. provides **SaaS platforms** for the multi-trillion-dollar insurance economy, operating in the US and China[25](index=25&type=chunk)[26](index=26&type=chunk) - The company's cloud-based SaaS platform connects trading partners and facilitates **AI-enabled digital workflows**[26](index=26&type=chunk) - The company domesticated as a Delaware corporation on July 30, 2021, following a business combination, originally incorporated in the Cayman Islands[27](index=27&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=15&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies, estimates, and assumptions used in preparing the unaudited condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared under GAAP, requiring significant management estimates and assumptions[29](index=29&type=chunk)[30](index=30&type=chunk) - Significant estimates include contract transaction prices, goodwill and intangible asset valuation, warrant liabilities, and stock incentive plans[34](index=34&type=chunk) - The company is evaluating new FASB ASUs 2024-03 and 2023-09, with 2023-09 not expected to have a significant impact[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 3. Business Acquisition](index=16&type=section&id=Note%203.%20Business%20Acquisition) This note details the acquisition of EvolutionIQ, Inc., including the total consideration, resulting goodwill, and intangible assets recognized - On January 6, 2025, the Company acquired EvolutionIQ, Inc. for a total consideration of **$674.3 million**, expanding into disability and injury claims management[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) EvolutionIQ Acquisition Consideration (in thousands) | Component | Amount | | :-------------------------- | :------- | | Cash consideration | $420,642 | | Fair value of common stock issued | $250,441 | | Fair value of option holdback | $3,184 | | Total acquisition date fair value | $674,267 | - The acquisition resulted in **$538.8 million** in goodwill and **$167.9 million** in intangible assets, primarily for acquired technology and customer relationships[45](index=45&type=chunk) - EvolutionIQ's revenues were less than **5.0%** of total revenues, with a **pretax loss of $51.8 million** including significant stock-based compensation and amortization expense[49](index=49&type=chunk) [Note 4. Revenue](index=17&type=section&id=Note%204.%20Revenue) This note provides a breakdown of revenue by service type, details remaining performance obligations, and changes in deferred revenue Revenue by Type of Service (in thousands) | Service Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Software subscriptions | $250,579 | $223,014 | $493,115 | $441,083 | | Other | $9,872 | $9,604 | $18,901 | $18,772 | | Total revenues | $260,451 | $232,618 | $512,016 | $459,855 | - **Software subscriptions** constitute the vast majority of revenue, accounting for **96%** of total revenue for both periods[52](index=52&type=chunk)[179](index=179&type=chunk)[198](index=198&type=chunk) - As of June 30, 2025, **$1.749 billion** of revenue is expected from remaining performance obligations, with **$738 million** anticipated in the next twelve months[52](index=52&type=chunk) - **Deferred revenue** increased from **$44.9 million** to **$71.2 million**, including **$21.5 million** related to the EvolutionIQ acquisition[54](index=54&type=chunk)[55](index=55&type=chunk) [Note 5. Fair Value Measurements](index=19&type=section&id=Note%205.%20Fair%20Value%20Measurements) This note details the Company's fair value measurements for financial instruments, including interest rate swaps, caps, and long-term debt - The Company uses **interest rate swap agreements** to reduce floating rate debt exposure, with a **$7.6 million** fair value liability as of June 30, 2025[57](index=57&type=chunk)[58](index=58&type=chunk)[61](index=61&type=chunk) - **Interest rate cap agreements** had a fair value of **$0.2 million** as of June 30, 2025, down from **$1.0 million** at December 31, 2024[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - The fair value of **long-term debt** was estimated at **$996.0 million** as of June 30, 2025, compared to a carrying amount of **$994.9 million**[63](index=63&type=chunk) [Note 6. Income Taxes](index=21&type=section&id=Note%206.%20Income%20Taxes) This note discusses the Company's income tax provisions, benefits, and the potential impact of recent legislative changes - The Company recognized an **income tax benefit of $7.2 million** for the three months and **$20.5 million** for the six months ended June 30, 2025, primarily due to pre-tax book losses[65](index=65&type=chunk)[66](index=66&type=chunk) - The **One Big Beautiful Bill Act (OBBB)**, signed July 4, 2025, may impact corporate taxation, and its effects are being evaluated[64](index=64&type=chunk) - **Income tax payments** were **$27.3 million** for the six months ended June 30, 2025, down from **$30.6 million** in the prior year[68](index=68&type=chunk) [Note 7. Accounts Receivable](index=21&type=section&id=Note%207.%20Accounts%20Receivable) This note provides a breakdown of accounts receivable, net of allowances, and identifies customer concentration Accounts Receivable—Net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Accounts receivable | $136,760 | $111,270 | | Allowance for credit losses and sales reserves | $(4,310) | $(4,692) | | Accounts receivable—Net | $132,450 | $106,578 | - **Accounts receivable—Net** increased by **$25.9 million** from December 31, 2024, to June 30, 2025[70](index=70&type=chunk) - One customer accounted for **10%** of **accounts receivable—Net** as of June 30, 2025[71](index=71&type=chunk) [Note 8. Other Current Assets](index=22&type=section&id=Note%208.%20Other%20Current%20Assets) This note details the components of other current assets, including prepaid costs and other miscellaneous assets Other Current Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Prepaid SaaS costs | $9,623 | $9,112 | | Prepaid service fees | $6,847 | $7,352 | | Other | $13,540 | $9,275 | | Total other current assets | $31,477 | $28,973 | - **Total other current assets** increased by **$2.5 million** from December 31, 2024, to June 30, 2025[72](index=72&type=chunk) [Note 9. Software, Equipment, and Property](index=22&type=section&id=Note%209.%20Software,%20Equipment,%20and%20Property) This note provides a breakdown of software, equipment, and property, net of accumulated depreciation and amortization Software, Equipment, and Property—Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Total software, equipment, and property | $348,219 | $331,355 | | Less accumulated depreciation and amortization | $(177,878) | $(159,276) | | Software, equipment, and property—Net | $170,341 | $172,079 | - **Depreciation and amortization expense** for software, equipment, and property increased to **$27.4 million** for the six months ended June 30, 2025, from **$19.2 million** in the prior year[73](index=73&type=chunk) [Note 10. Leases](index=23&type=section&id=Note%2010.%20Leases) This note details the Company's lease costs, including operating and variable lease expenses, and changes in lease assets and liabilities Total Lease Costs (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease costs | $1,878 | $1,299 | $3,671 | $2,707 | | Variable lease costs | $1,085 | $1,093 | $2,210 | $2,194 | | Total lease costs | $2,963 | $2,392 | $5,881 | $4,901 | - **Total lease costs** increased by **$0.6 million** for the three months and **$1.0 million** for the six months ended June 30, 2025, compared to the prior year[74](index=74&type=chunk) - The Company obtained **$8.8 million** in operating lease assets, primarily due to the EvolutionIQ acquisition[75](index=75&type=chunk) [Note 11. Goodwill and Intangible Assets](index=23&type=section&id=Note%2011.%20Goodwill%20and%20Intangible%20Assets) This note provides details on changes in goodwill and intangible assets, including the impact of the EvolutionIQ acquisition and amortization expense - **Goodwill** increased by **$538.8 million** to **$1.9565 billion** as of June 30, 2025, primarily due to the EvolutionIQ acquisition[76](index=76&type=chunk) - **Intangible assets** increased by **$167.9 million** due to the EvolutionIQ acquisition, with a weighted average useful life of **9.5 years** for amortizable assets[48](index=48&type=chunk)[76](index=76&type=chunk) Intangible Assets (in thousands) | Intangible Asset | Gross Carrying Amount (June 30, 2025) | Net Carrying Amount (June 30, 2025) | | :----------------------- | :------------------------------------ | :---------------------------------- | | Customer relationships | $1,324,130 | $736,415 | | Acquired technologies | $139,100 | $128,363 | | Trademarks | $1,300 | $1,170 | | Trademarks—indefinite life | $190,470 | $190,470 | | Total intangible assets | $1,655,000 | $1,056,418 | - **Amortization expense for intangible assets** was **$45.8 million** for the six months ended June 30, 2025, up from **$44.5 million** in the prior year[78](index=78&type=chunk) [Note 12. Accrued Expenses](index=24&type=section&id=Note%2012.%20Accrued%20Expenses) This note details the components of accrued expenses, including compensation, royalties, and professional services Accrued Expenses (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :------------------ | | Compensation | $39,060 | $47,505 | | Royalties and licenses | $5,680 | $5,116 | | Professional services | $3,600 | $6,260 | | Option holdback | $3,184 | — | | Total accrued expenses | $66,504 | $72,543 | - **Total accrued expenses** decreased by **$6.0 million**, primarily due to lower compensation and professional service costs, partially offset by the EvolutionIQ option holdback[80](index=80&type=chunk) [Note 13. Other Liabilities](index=24&type=section&id=Note%2013.%20Other%20Liabilities) This note details the components of other liabilities, including non-current income taxes payable, fair value of interest rate swaps, and non-current deferred revenue Other Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Income taxes payable—non-current | $8,848 | $6,344 | | Fair value on interest rate swap | $7,569 | — | | Deferred revenue—non-current | $1,078 | $1,415 | | Total other liabilities | $17,495 | $11,303 | - **Total other liabilities** increased by **$6.2 million**, mainly due to a **$7.6 million** fair value liability from interest rate swaps, partially offset by decreased non-current deferred revenue[81](index=81&type=chunk) [Note 14. Long-Term Debt](index=26&type=section&id=Note%2014.%20Long-Term%20Debt) This note details the Company's long-term debt, including amendments to credit agreements, incremental term loans, interest rates, and interest rate swap agreements - The Company incurred **$225.0 million** in incremental term loans in January 2025 to refinance existing loans and extend maturity to January 23, 2032[83](index=83&type=chunk)[86](index=86&type=chunk) - Amendments removed the SOFR credit spread adjustment and reduced the interest rate margin on all term loans[86](index=86&type=chunk) Long-Term Debt (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Term Loan | $995,995 | $776,000 | | Term Loan—Net of discount & fees | $983,308 | $769,053 | | Total long-term debt—Net of current portion | $973,298 | $761,053 | - The **weighted-average interest rate** on the Term Loan decreased to **6.4%** for the three months ended June 30, 2025, from **7.8%** in the prior year[97](index=97&type=chunk) - The Company entered into three **interest rate swap agreements** with a notional amount of **$750.0 million**, fixing the rate at **3.94%** from July 2025 to July 2027[100](index=100&type=chunk) [Note 15. Redeemable Non-Controlling Interest](index=29&type=section&id=Note%2015.%20Redeemable%20Non-Controlling%20Interest) This note describes the reclassification of Series A Preferred Stock from mezzanine equity due to a redemption notice from a minority investor - On March 17, 2025, Series A Preferred Stock held by a minority investor was reclassified from mezzanine equity due to a redemption notice[103](index=103&type=chunk)[106](index=106&type=chunk) - The redemption price includes the original issue price plus **10.0% compound interest** per annum[105](index=105&type=chunk) [Note 16. Note Payable to Minority Investor](index=29&type=section&id=Note%2016.%20Note%20Payable%20to%20Minority%20Investor) This note details the promissory note issued to a minority investor in connection with the redemption of Series A Preferred Stock, including its principal and interest terms - CCC Cayman issued a promissory note to a minority investor on May 16, 2025, with an initial principal of **$23.4 million**[108](index=108&type=chunk)[109](index=109&type=chunk) - The Promissory Note accrues interest at **12.0% per annum**, compounded daily, with an outstanding amount of **$23.7 million** as of June 30, 2025[109](index=109&type=chunk)[111](index=111&type=chunk) [Note 17. Capital Stock](index=31&type=section&id=Note%2017.%20Capital%20Stock) This note provides information on common stock shares issued and outstanding, shares issued for acquisitions, and details of the share repurchase program - As of June 30, 2025, **648.99 million shares** of common stock were issued and outstanding, up from **629.21 million shares** at December 31, 2024[114](index=114&type=chunk) - The Company issued **10.36 million restricted shares** of common stock for the EvolutionIQ acquisition, subject to two-year service-based vesting conditions[115](index=115&type=chunk) - Under the 2024 Share Repurchase Program, **17.99 million shares** were repurchased for **$172.3 million**, with **$127.7 million** remaining available[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) [Note 18. Stock Incentive Plans](index=32&type=section&id=Note%2018.%20Stock%20Incentive%20Plans) This note details stock-based compensation expense by category, unrecognized compensation expense, and the impact of the EvolutionIQ acquisition on stock awards Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenues | $4,110 | $2,672 | $6,795 | $4,754 | | Research and development | $14,535 | $11,515 | $32,136 | $22,586 | | Sales and marketing | $12,522 | $6,785 | $25,650 | $12,513 | | General and administrative | $14,808 | $19,153 | $42,442 | $45,243 | | Total stock-based compensation expense | $45,975 | $40,125 | $107,023 | $85,096 | - **Total stock-based compensation expense** increased to **$107.0 million** for the six months ended June 30, 2025, partly due to the EvolutionIQ acquisition[129](index=129&type=chunk) - **$217.4 million** of unrecognized time-based stock compensation and **$25.0 million** for performance-based awards remain, to be recognized over 2.3 and 2.0 years, respectively[129](index=129&type=chunk) - An additional **$35.4 million** of unrecognized stock compensation expense from the EvolutionIQ acquisition will be recognized over **1.6 years**[130](index=130&type=chunk) [Note 19. Warrants](index=34&type=section&id=Note%2019.%20Warrants) This note explains the redemption of all outstanding Private Warrants in May 2024 and the resulting impact on fair value changes - All outstanding Private Warrants were redeemed in May 2024 for **3.81 million shares** of common stock, with no warrants outstanding as of June 30, 2025[133](index=133&type=chunk) - The Company recognized **$16.0 million** and **$14.4 million** income from warrant liability fair value changes in 2024, with no such income/expense in 2025 due to redemption[133](index=133&type=chunk)[193](index=193&type=chunk)[211](index=211&type=chunk) [Note 20. Commitments](index=34&type=section&id=Note%2020.%20Commitments) This note outlines the Company's long-term purchase obligations for data licensing, outsourced services, and SaaS, and its warranty and indemnification policies - The Company has long-term purchase obligations for data licensing, outsourced services, and SaaS, expiring through 2031, with no material changes from December 31, 2024[134](index=134&type=chunk) - The Company provides service warranties and intellectual property indemnification, incurring no material costs or accrued liabilities to date[135](index=135&type=chunk)[136](index=136&type=chunk) [Note 21. Legal Proceedings and Contingencies](index=35&type=section&id=Note%2021.%20Legal%20Proceedings%20and%20Contingencies) This note addresses ongoing legal proceedings and contingencies, stating management's belief that they will not have a material adverse effect on financial results - Management believes current legal actions are not expected to have a material adverse effect on financial position or results of operations[137](index=137&type=chunk) - Intellectual property violation claims made by the Company in a prior year were settled during the six months ended June 30, 2025[138](index=138&type=chunk) [Note 22. Related Parties](index=35&type=section&id=Note%2022.%20Related%20Parties) This note discloses transactions with related parties, including revenues from credit card processing and expenses for employee benefits and board fees Related Party Transactions (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues (Credit card processing) | $506 | $338 | $888 | $603 | | Expenses (Employee health insurance benefits) | $565 | $683 | $947 | $1,853 | | Expenses (Board of director fees) | $245 | $239 | $331 | $351 | | Expenses (IT security software) | $156 | $128 | $312 | $255 | - Revenues from credit card processing with related parties increased, while employee health insurance benefits expenses decreased for the six months ended June 30, 2025[139](index=139&type=chunk) [Note 23. Other (Expense) Income—Net](index=35&type=section&id=Note%2023.%20Other%20(Expense)%20Income%E2%80%94Net) This note details the components of other (expense) income—net, primarily focusing on gains and losses from changes in fair value of derivative instruments Other (Expense) Income—Net (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Loss from change in fair value of interest rate swaps | $(2,238) | — | $(7,569) | — | | Loss from change in fair value of interest rate caps | $(402) | $(852) | $(812) | $(134) | | Income from derivative instruments | $492 | $2,008 | $989 | $4,039 | | Total other (expense) income—Net | $(2,057) | $1,253 | $(7,154) | $4,191 | - The Company recognized a **net expense of $7.2 million** for the six months ended June 30, 2025, primarily due to losses from interest rate swaps and caps[140](index=140&type=chunk)[212](index=212&type=chunk) [Note 24. Net Income (Loss) Per Share](index=35&type=section&id=Note%2024.%20Net%20Income%20(Loss)%20Per%20Share) This note presents the calculation of basic and diluted net income (loss) per share, including the weighted-average shares outstanding Net Income (Loss) Per Share (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common stockholders | $12,960 | $20,224 | $(5,737) | $18,485 | | Basic EPS | $0.02 | $0.03 | $(0.01) | $0.03 | | Diluted EPS | $0.02 | $0.03 | $(0.01) | $0.03 | | Weighted average shares—Basic | 637,578,033 | 609,997,114 | 637,207,185 | 604,138,246 | | Weighted average shares—Diluted | 660,622,703 | 638,367,745 | 637,207,185 | 636,990,633 | - **Diluted EPS** for the six months ended June 30, 2025, was **$(0.01)**, reflecting the net loss position compared to **$0.03** in the prior year[143](index=143&type=chunk) - Approximately **28.9 million common stock equivalent shares** were excluded from diluted EPS due to their anti-dilutive effect[144](index=144&type=chunk) [Note 25. Segment Information and Information About Geographic Areas](index=36&type=section&id=Note%2025.%20Segment%20Information%20and%20Information%20About%20Geographic%20Areas) This note provides information on the Company's single reportable segment, the Domestic Segment, and a breakdown of revenues by geographic area - The Company operates in one reportable segment, the 'Domestic Segment,' primarily providing SaaS platforms in the United States[146](index=146&type=chunk)[148](index=148&type=chunk) Revenues by Geographic Area (in thousands) | Geographic Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $258,751 | $230,995 | $508,626 | $456,561 | | China | $1,700 | $1,623 | $3,390 | $3,294 | | Total revenues | $260,451 | $232,618 | $512,016 | $459,855 | - The CODM uses net income (loss) and adjusted financial information to evaluate segment performance and allocate resources[149](index=149&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results, including business overview, key metrics, financial performance, non-GAAP reconciliations, liquidity, and critical accounting estimates [Business Overview](index=40&type=section&id=Business%20Overview) This subsection provides an overview of CCC's SaaS platforms for the insurance economy, its market position, and strategic acquisitions - CCC provides leading **SaaS platforms** for the multi-trillion-dollar insurance economy, connecting over **35,000 businesses** in automotive claims and collision repair[161](index=161&type=chunk)[162](index=162&type=chunk) - The platform leverages over **$2 trillion** of historical data for **AI-enhanced workflows**, with over **100 U.S. auto insurers** and **10,000 U.S. collision repairers** using AI solutions[165](index=165&type=chunk) - The Company acquired EvolutionIQ in January 2025 to expand into disability and workers' compensation insurance, aiming to digitize the automotive claims lifecycle[167](index=167&type=chunk) - CCC maintains strong customer relationships, including **27 of the top 30 U.S. auto insurers**, over **30,500 collision repair facilities**, and **13 of the top 15 automotive manufacturers**[168](index=168&type=chunk) [Key Performance Measures and Operating Metrics](index=42&type=section&id=Key%20Performance%20Measures%20and%20Operating%20Metrics) This subsection presents key performance indicators, including Software Net Dollar Retention Rate and Software Gross Dollar Retention Rate - **Software Net Dollar Retention Rate (NDR)** was **107%** for the quarters ended March 31, 2025, and June 30, 2025, indicating strong revenue growth from existing customers[172](index=172&type=chunk) - **Software Gross Dollar Retention Rate (GDR)** remained at **99%** for the quarters ended March 31, 2025, and June 30, 2025, demonstrating high customer retention[175](index=175&type=chunk) - Both Software NDR and GDR calculations now include EvolutionIQ's software revenue starting from the quarter ended March 31, 2025[171](index=171&type=chunk)[174](index=174&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) This subsection provides a detailed analysis of the Company's revenues, operating income, and net income (loss) for the reported periods Revenue Growth (YoY) | Period | Revenue (2025) | Revenue (2024) | Change ($) | Change (%) | | :------------------------------- | :------------- | :------------- | :--------- | :--------- | | Three Months Ended June 30 | $260,451 | $232,618 | $27,833 | 12.0% | | Six Months Ended June 30 | $512,016 | $459,855 | $52,161 | 11.3% | - **Revenue growth** was driven by **5%** from existing customer upgrades, **4%** from the EvolutionIQ acquisition, and **3%** from new customers[182](index=182&type=chunk)[199](index=199&type=chunk) Operating Income and Net Income (Loss) Attributable to Common Stockholders (YoY) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating Income | $24,470 | $22,513 | $13,772 | $30,310 | | Net Income (Loss) Attributable to Common Stockholders | $12,960 | $20,224 | $(5,737) | $18,485 | - **Operating income** increased by **8.7%** for three months but decreased by **54.6%** for six months, primarily due to increased operating expenses and the EvolutionIQ acquisition[180](index=180&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk)[197](index=197&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - **Net income** decreased for three months and became a **net loss** for six months, largely due to the absence of warrant liability income and increased interest expense[180](index=180&type=chunk)[191](index=191&type=chunk)[193](index=193&type=chunk)[197](index=197&type=chunk)[208](index=208&type=chunk)[211](index=211&type=chunk) [Non-GAAP Financial Measures](index=51&type=section&id=Non-GAAP%20Financial%20Measures) This subsection provides reconciliations and analysis of non-GAAP financial measures, including Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow Adjusted Gross Profit and Margin (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted Gross Profit | $202,521 | $182,080 | $394,983 | $359,097 | | Adjusted Gross Profit Margin | 78% | 78% | 77% | 77% | Adjusted EBITDA and Margin (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA | $108,116 | $95,797 | $207,194 | $189,512 | | Adjusted EBITDA Margin | 42% | 41% | 40% | 40% | Adjusted Net Income and Free Cash Flow (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted Net Income | $58,855 | $56,186 | $113,337 | $110,976 | | Free Cash Flow | $27,353 | $36,213 | $70,999 | $75,785 | - **Adjusted EBITDA** increased by **12.9%** for three months and **9.3%** for six months, demonstrating operational performance growth excluding non-recurring and non-cash items[222](index=222&type=chunk) - **Free Cash Flow** decreased by **24.4%** for three months and **6.3%** for six months, primarily due to increased capital expenditures for software, equipment, and property[226](index=226&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) This subsection discusses the Company's liquidity position, including cash flows from operations, cash and cash equivalents, working capital, and available credit facilities - The Company generated **$101.5 million** in cash flows from operating activities during the six months ended June 30, 2025[227](index=227&type=chunk) - As of June 30, 2025, **cash and cash equivalents** were **$55.1 million**, with a working capital surplus of **$77.2 million** and an accumulated deficit of **$1.2722 billion**[227](index=227&type=chunk) - Management believes existing cash, operating cash flows, and **$248.9 million** available under the 2021 Revolving Credit Facility are sufficient for the next twelve months[98](index=98&type=chunk)[228](index=228&type=chunk) [Debt](index=56&type=section&id=Debt) This subsection provides details on the Company's long-term debt, including outstanding amounts, credit agreement amendments, interest rates, and hedging strategies - The Company's **Term Loan outstanding** was **$996.0 million** as of June 30, 2025, with **$10.0 million** classified as current[237](index=237&type=chunk) - The Fourth Amendment extended term loan maturity to January 23, 2032, and reduced the interest rate margin[234](index=234&type=chunk) - The **weighted-average interest rate** on the Term Loan was **6.3%** for the six months ended June 30, 2025, down from **7.8%** in the prior year[241](index=241&type=chunk) - The Company entered into **interest rate swap agreements** to fix interest rates on **$750.0 million** of debt at **3.94%** from July 2025 to July 2027[244](index=244&type=chunk) [Cash Flows](index=58&type=section&id=Cash%20Flows) This subsection provides a summary and analysis of cash flows from operating, investing, and financing activities for the reported periods Summary of Cash Flow Data (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $101,548 | $107,009 | | Net cash used in investing activities | $(445,682) | $(31,224) | | Net cash provided by (used in) financing activities | $167 | $(33,328) | | Net change in cash and cash equivalents | $(343,930) | $42,321 | - **Net cash provided by operating activities** decreased slightly to **$101.5 million**, primarily due to working capital changes, including income taxes and accounts receivable increases[246](index=246&type=chunk) - **Net cash used in investing activities** surged to **$445.7 million**, predominantly driven by the **$415.1 million** acquisition of EvolutionIQ[247](index=247&type=chunk) - **Net cash provided by financing activities** turned positive at **$0.2 million**, reflecting **$225.0 million** from incremental term loans, largely offset by **$172.5 million** in common stock repurchases[248](index=248&type=chunk) [Recent Accounting Pronouncements](index=60&type=section&id=Recent%20Accounting%20Pronouncements) This subsection refers to Note 2 for information on recent accounting pronouncements and their potential impact on the Company's financial statements - The Company refers to Note 2 for information on recent accounting pronouncements, including ASU 2024-03 and ASU 2023-09[249](index=249&type=chunk) [Critical Accounting Estimates](index=60&type=section&id=Critical%20Accounting%20Estimates) This subsection highlights critical accounting estimates, particularly those related to business combinations and the allocation of purchase price - Business combinations require significant judgment and estimates in allocating purchase price to acquired assets and liabilities, including valuations of future revenue and discount rates[252](index=252&type=chunk)[253](index=253&type=chunk) - The EvolutionIQ acquisition in January 2025 resulted in **$538.8 million** in goodwill and **$167.9 million** in intangible assets, based on these estimates[255](index=255&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section reports no material changes in the Company's market risk compared to disclosures in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in market risk compared to the disclosures in the Annual Report on Form 10-K for the year ended December 31, 2024[256](index=256&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with EvolutionIQ's internal controls integration ongoing and excluded from current evaluation - Disclosure controls and procedures were effective as of June 30, 2025[257](index=257&type=chunk) - The EvolutionIQ acquisition is excluded from the scope of internal control evaluation for the first year, with integration ongoing[258](index=258&type=chunk) - No other material changes in internal control over financial reporting were identified during the three months ended June 30, 2025[259](index=259&type=chunk) [PART II. OTHER INFORMATION](index=63&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) This section reiterates that ongoing legal actions are not expected to have a material adverse effect on the Company's financial condition or results of operations - Management believes current legal proceedings are not expected to materially adversely affect the Company's financial position or results of operations[260](index=260&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the 'Risk Factors' section in the Annual Report on Form 10-K for a comprehensive discussion of potential business risks - Readers are referred to the 'Risk Factors' section in the Annual Report on Form 10-K for a comprehensive list of business risks[261](index=261&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%20from%20Registered%20Securities) This section details the Company's common stock repurchase activities during the three months ended June 30, 2025, under its 2024 Share Repurchase Program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Purchase Price per Share | Approximate Dollar Value Remaining Under Program | | :--------- | :------------------------------- | :------------------------------- | :----------------------------------------------- | | April 2025 | — | — | $227.7 million | | May 2025 | 3,218,076 | $8.907 | $199.1 million | | June 2025 | 7,770,251 | $9.095 | $127.7 million | | Total | 10,988,327 | $9.019 | $127.7 million | - The Company repurchased **10.99 million shares** of common stock for **$99.1 million** during the three months ended June 30, 2025, under the **$300.0 million** 2024 Share Repurchase Program[263](index=263&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is marked as 'Not applicable,' indicating no defaults upon senior securities during the reporting period - Not applicable[264](index=264&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is marked as 'Not applicable,' indicating no mine safety disclosures are required for the Company - Not applicable[265](index=265&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) This item is marked as 'Not applicable,' indicating no other material information to disclose that is not covered elsewhere in the report - Not applicable[266](index=266&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications and XBRL documents - The report includes certifications from the CEO and CFO and Inline XBRL documents[268](index=268&type=chunk)[269](index=269&type=chunk) [SIGNATURE](index=66&type=section&id=SIGNATURE) This section contains the required signatures for the Quarterly Report on Form 10-Q