Summary of CCC Intelligent Solutions Holdings (CCCS) FY Conference Company Overview - CCC Intelligent Solutions Holdings operates as a Software as a Service (SaaS) company focused on the auto insurance ecosystem, connecting insurance companies, repair facilities, parts providers, and OEMs [3][4] - The U.S. auto insurance market involves over $300 billion in premiums, with significant portions allocated to claims, including physical damage, casualty, and loss adjustment expenses [3][4] Financial Profile - The global addressable market is approximately $35 billion, with the U.S. market at about $15 billion [7] - The business model is durable, with 96% of revenue from software and 80% from subscriptions [7][8] - Gross dollar retention is between 98% and 99%, with long-term organic revenue growth targets of 7% to 10% [8] - Current margins are in the low 40s, expected to rise to mid-40s over the next several years [8][9] - The acquisition of EvolutionIQ is anticipated to add 200 basis points to growth and assist in margin progression [9][36] Market Dynamics and Drivers - Increasing vehicle complexity, rising parts costs, and labor shortages are significant challenges for the auto insurance ecosystem [12] - CCC utilizes sophisticated software workflows and AI to manage this complexity and improve operational efficiency [12][15] - The company has a vast dataset of approximately 2 trillion data points, which enhances accuracy in claims processing [13][14] Innovation and Emerging Opportunities - CCC has invested heavily in AI, with capabilities that assist in processing complex medical claims and improving customer interactions [18][19] - Emerging solutions, including AI-driven tools for casualty claims and diagnostics for repair facilities, are expected to contribute significantly to growth [25][29] - The company is expanding its offerings to include capabilities for electric vehicle (EV) manufacturers and enhancing its casualty solutions through the EvolutionIQ acquisition [31][33] Claims Volume and Consumer Behavior - There has been a 4% decrease in claim volume over the past decade, while organic revenue growth has increased by approximately 40% [41] - Consumers are increasingly self-paying for lower dollar claims, leading to a rise in self-pay rates from 11% to 25% [46] - The company anticipates that as premium rates normalize, the filing of claims will increase [46] Long-term Outlook - CCC's growth plans are robust, with significant revenue and earnings growth since going public [53] - The company is not reliant on a single solution for growth but has a diverse portfolio of opportunities [55] - The management sees strong value in helping customers digitize and transform their operations, which is a key driver for future growth [53]

Group 1 - CCC Intelligent Solutions Holdings Inc. reported quarterly earnings of $0.08 per share, matching the Zacks Consensus Estimate, compared to $0.09 per share a year ago [1] - The company posted revenues of $251.57 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.75%, and up from $227.24 million year-over-year [2] - Over the last four quarters, CCC Intelligent Solutions has surpassed consensus revenue estimates four times [2] Group 2 - The stock has underperformed, losing about 21.7% since the beginning of the year, while the S&P 500 declined by 3.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $258.95 million, and for the current fiscal year, it is $0.37 on revenues of $1.06 billion [7] - The Internet - Software industry is currently in the top 35% of Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue was $252 million, growing 11% year over year, exceeding guidance and crossing the $1 billion revenue run rate for the first time [7][24] - Adjusted EBITDA was $99 million, also ahead of guidance, with an adjusted EBITDA margin of 39% [8][30] - Adjusted gross profit was $192 million, with a gross profit margin of 77%, slightly down from 78% in Q1 2024 [28] Business Line Data and Key Metrics Changes - Approximately four percentage points of revenue growth came from cross-sell, upsell, and adoption of solutions, while three points came from new logos, and four points from Evolution IQ [25] - Emerging solutions contributed about four percentage points to total revenue, marking the fastest-growing portion of the portfolio [25] Market Data and Key Metrics Changes - Filed auto physical damage claims declined by 9% year over year in Q1 2025, attributed to economic sensitivity and increased consumer self-pay [14][52] - Consumer self-pay for repairs increased to about 25%, up from 11-12% three years ago, indicating a shift in consumer behavior [61] Company Strategy and Development Direction - The company aims to help clients manage complexity in the insurance economy through real-time data and AI-powered workflows [10][12] - Continued investment in innovation and expansion of established solutions is seen as a pathway for growth, particularly in the casualty market [18][23] - The renewal of long-term contracts with clients like Caliber Collision demonstrates the strategic role of the company in the auto insurance economy [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the current macroeconomic environment is creating near-term headwinds, particularly in claim volumes and client buying behavior [33][34] - Despite these challenges, the company remains confident in its long-term growth potential and ability to assist clients with digital transformation [38] Other Important Information - The company repurchased 7 million shares for $72 million under a $300 million share repurchase program [31] - Guidance for Q2 2025 revenue is set at $255.5 million to $257.5 million, representing 10-11% growth year over year [32] Q&A Session Summary Question: How does the company see the claims environment recovering? - Management indicated that claims volume has historically fluctuated and that the current decline is more about claims not being filed rather than a decrease in accidents [42] Question: What is the impact of the macroeconomic environment on ROI and emerging solutions? - The company emphasized that its solutions are ROI-based, which helps maintain demand even in uncertain conditions [45] Question: How long do weaker claims volumes typically last? - Management noted that such cycles can last from one to two years, with current consumer behavior influencing the filing of claims [51][52] Question: What is the current share of self-claim repair by consumers? - Self-pay by consumers has increased to about 25%, indicating a significant change in behavior compared to previous years [61] Question: What is the impact of tariffs on parts suppliers? - Management stated that tariffs have minimal impact on the company's subscription-based revenue model, although they are monitoring the situation closely [64] Question: What is the pricing model for MedHUB? - MedHUB will be monetized through a subscription-based revenue model, targeting a five to one ROI for clients [86][87]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR (800) 621-8070 Registrant's telephone number, including area code Not Applicable (Former name or former address, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: | | Trading | | | --- | --- | --- | | Title of each class | Symbol(s) | Name of each exc ...

Financial Data and Key Metrics Changes - In Q1 2025, total revenue was $252 million, growing 11% year over year, exceeding guidance and crossing the $1 billion revenue run rate threshold for the first time [6][24] - Adjusted EBITDA was $99 million, also ahead of guidance, with an adjusted EBITDA margin of 39% [6][30] - Adjusted gross profit was $192 million, with a gross profit margin of 77%, slightly down from 78% in Q1 2024 [28] Business Line Data and Key Metrics Changes - Approximately 4 percentage points of revenue growth came from cross-sell, upsell, and adoption of solutions, while 3 points came from new logos, and 4 points from Evolution IQ [25] - Emerging solutions contributed about 4 percentage points to total revenue in Q1 2025, marking the fastest growing portion of the portfolio [25][19] Market Data and Key Metrics Changes - Filed auto physical damage claims declined by 9% year over year in Q1 2025, attributed to economic sensitivity and rising auto insurance premiums [13][12] - Consumer self-pay for repairs increased to about 25%, up from 11-12% three years ago, indicating a shift in consumer behavior [62] Company Strategy and Development Direction - The company focuses on helping clients manage complexity in the insurance economy through real-time data and AI-powered workflows [10][11] - Continued investment in innovation and expansion of established solutions is seen as a pathway for growth, particularly in the casualty insurance sector [18][21] - The renewal of long-term contracts with major clients like Caliber Collision highlights the strategic role of the company in the auto insurance economy [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the current macroeconomic environment is creating headwinds, particularly in claim volumes and client buying behavior, but remains optimistic about long-term growth [34][35] - The company expects revenue growth for 2025 to be modestly reduced, with total revenue guidance now at $1.046 billion to $1.056 billion [32][33] Other Important Information - The company repurchased 7 million shares for $72 million under a $300 million share repurchase program [30] - Stock-based compensation was 24% of revenue in Q1, expected to moderate throughout the year [36][39] Q&A Session Summary Question: Dynamics in the claims environment and recovery expectations - Management indicated that claims volume has historically fluctuated and that the current decline is more about claims not being filed rather than a decrease in accidents [43] Question: Previous cycles of claims weakness - Management noted that weaker claims volumes can last from one to two years, with current consumer behavior impacting filing rates [52] Question: Organic growth in Q1 - Organic growth was confirmed at 10.6%, with Evolution IQ contributing 4 points to growth [60] Question: Demand elasticity of Evolution IQ and casualty business - Management clarified that the majority of Evolution IQ's revenue is not correlated with auto frequency, and the business continues to perform well [78][81] Question: Progress of emerging solutions - Emerging solutions are seeing strong demand, with contributions increasing from one point to two points of growth [56][90] Question: Impact of tariffs on parts suppliers - Management stated that tariffs have minimal impact on the subscription-based revenue model, although they are monitoring the situation closely [65] Question: MedHUB's efficiency and pricing model - MedHUB is expected to deliver significant ROI, with a subscription-based revenue model planned for the future [86]

Financial Performance - Total revenue for Q1 2025 was $251.6 million, an 11% increase from $227.2 million in Q1 2024[3] - Adjusted EBITDA for Q1 2025 was $99.1 million, a 6% increase from $93.7 million in Q1 2024[7] - GAAP net loss for Q1 2025 was $17.4 million, compared to a GAAP net loss of $0.6 million in Q1 2024[7] - Free cash flow for Q1 2025 was $43.6 million, up from $39.6 million in Q1 2024[5] - Revenues for Q1 2025 increased to $251,565, up 10.7% from $227,237 in Q1 2024[21] - Gross profit for Q1 2025 was $184,992, representing a gross profit margin of 74%[25] - The net loss for Q1 2025 was $17,421,000, a significant increase from a net loss of $597,000 in Q1 2024[29] - Adjusted EBITDA for the first quarter of 2025 was $99,077,000, compared to $93,715,000 in the same quarter of 2024, with an adjusted EBITDA margin of 39%[29] - The adjusted net income for Q1 2025 was $54,481,000, with adjusted net income per share of $0.09 for basic shares, unchanged from Q1 2024[31] Guidance and Projections - The company expects Q2 2025 revenue to be between $255.5 million and $257.5 million[10] - Full year 2025 revenue guidance is set between $1.046 billion and $1.056 billion[10] - Adjusted EBITDA guidance for full year 2025 is projected between $420.0 million and $428.0 million[10] Assets and Liabilities - Total current assets decreased to $297,913 from $564,650 as of December 31, 2024[20] - Total liabilities increased to $1,434,352 from $1,163,716 as of December 31, 2024[20] - Cash and cash equivalents decreased to $130,323 from $398,983 as of December 31, 2024[20] Operating Expenses and Losses - Operating expenses for Q1 2025 were $195,691, up from $160,065 in Q1 2024[26] - For the three months ended March 31, 2025, CCC Intelligent Solutions reported an operating loss of $10,699,000, compared to an operating income of $7,797,000 in the same period of 2024[27] - The adjusted operating income for Q1 2025 was $85,335,000, slightly up from $84,083,000 in Q1 2024[27] Stock-Based Compensation and Costs - Stock-based compensation increased to $61,048 in Q1 2025 from $44,971 in Q1 2024[23] - Stock-based compensation expense increased to $65,919,000 in Q1 2025 from $50,033,000 in Q1 2024[29] - M&A and integration costs rose to $7,619,000 in Q1 2025, compared to $477,000 in Q1 2024[29] Integration and Market Expansion - The integration of EvolutionIQ is on track, with the launch of Medhub for Casualty ahead of schedule[2] - CCC has signed a large OEM with a captive insurance business, indicating continued market expansion[9]

Group 1 - CCC Intelligent Solutions Holdings Inc. (NASDAQ: CCCS) provides a mission-critical platform that is integral to the insurance ecosystem, benefiting from strong network effects [1] - The investment thesis emphasizes a blend of value investing principles and a focus on long-term growth, aiming to acquire quality companies at a discount to their intrinsic value [1] - The strategy involves holding investments for the long term to allow for compounding of earnings and shareholder returns [1]

Core Investment Criteria - An ideal investment operates in a sector expected to experience structural growth exceeding GDP growth over the next 5-10 years [1] - It benefits from sustainable competitive advantages that lead to attractive unit economics [1] - The investment should be managed by competent, ethical, and long-term thinkers [1] - A fair valuation is essential for the investment [1]

CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS) Q4 2024 Earnings Conference Call February 25, 2025 5:00 PM ET Company Participants Bill Warmington - Vice President, Investor Relations Githesh Ramamurthy - Chairman & Chief Executive Officer Brian Herb - Chief Financial Officer Conference Call Participants Alexei Gogolev - JPMorgan Josh Baer - Morgan Stanley Dylan Becker - William Blair Samad Samana - Jefferies Maura Hager - Goldman Sachs Shlomo Rosenbaum - Stifel Chris Moore - CJS Securities Peter Grif ...

Customer Concentration and Revenue Risks - A significant portion of the company's revenue is derived from a small number of customers in the P&C insurance and automotive collision industries, with no individual customer accounting for more than 10% of total revenue in 2024[70]. - The company faces risks from large customers who have negotiating leverage, potentially leading to increased costs, decreased revenue, and lower gross margins[71]. - The company's revenue growth is dependent on existing customers renewing and upgrading their SaaS subscriptions, with fluctuations in renewal rates posing a risk to future revenue[74]. Growth Strategy and Market Conditions - The growth strategy focuses on continued investment in innovative SaaS solutions, which requires substantial technical, financial, and sales resources[78]. - Public health outbreaks, such as the COVID-19 pandemic, could materially impact the company's business and financial results, leading to decreased technology spending by customers[80]. - Economic downturns or rising unemployment rates may reduce customer demand for the company's solutions, adversely affecting revenue[81]. - The company is exposed to risks from natural catastrophes, war, and terrorism, which could prevent the expansion of its customer base and revenue growth[83]. - Changes in the insurance and automotive collision industries, including the adoption of new technologies like AI, may significantly impact the company's results of operations[86]. - Global economic uncertainties, including trade tariffs and inflationary pressures, could delay customer purchases and negatively affect the company's financial results[88]. Research and Development - Research and development expenses amounted to $201.5 million, representing 21% of total revenue for the year ended December 31, 2024[107]. - Total spend on research and development, including capitalized internal use software, was 26% of total revenue for the year ended December 31, 2024[107]. - The company anticipates that macroeconomic factors could adversely affect adoption and average selling prices of its solutions, particularly in the P&C insurance and automotive collision industries[89]. Competition and Market Dynamics - The company faces intense competition, with increased capital investment in competitors potentially leading to improved product capabilities and pricing pressure[95]. - The market for cloud-based solutions is expected to become increasingly competitive, necessitating higher investments in research and development to maintain competitiveness[96]. - The company’s ability to develop new markets and increase sales from existing customers is critical for revenue growth, with potential delays due to various external factors[106]. Regulatory and Compliance Risks - Compliance with government regulations is crucial, as violations could reduce demand for solutions and services, impacting revenue[110]. - International sales efforts may expose the company to regulatory, economic, and political risks, which could hinder expansion success[111]. - The company faces significant risks in China due to government control over capital investments and potential changes in tax regulations, impacting financial condition and operations[115]. - Compliance with anti-bribery and anti-corruption laws, including the FCPA, is critical, as violations could lead to fines and damage to reputation[116]. - The company is subject to increasing global trade laws and regulations, which could impact international sales efforts and expose the company to penalties[118]. - The company may face significant penalties for non-compliance with data privacy regulations, including fines up to 4% of total annual worldwide turnover under GDPR[167]. Intellectual Property and Data Security - The company relies on third-party data, technology, and intellectual property, and any interruption in access could materially harm operating results[120]. - The company may face significant costs and challenges in enforcing intellectual property rights, which could impact competitive position[124]. - Data security breaches could adversely impact the company's reputation and ongoing operations, with risks including cyber-attacks and unauthorized access to sensitive information[135]. - Significant violations of data privacy could lead to loss of business, litigation, regulatory fines, and damage to the company's reputation[138]. Financial and Debt Management - As of December 31, 2024, the total debt outstanding under the 2021 Credit Agreement was $776.0 million, with an additional unused borrowing capacity of $249.3 million[197]. - By January 23, 2025, total debt under the 2021 Credit Agreement increased to $1,001.0 million, maintaining the same unused borrowing capacity of $249.3 million[197]. - The company faces risks related to interest rate increases, which could lead to higher debt service obligations and decreased net income and cash flows[201]. - The 2021 Credit Agreement includes covenants that restrict the company's ability to incur additional indebtedness, pay dividends, and engage in acquisitions, potentially limiting growth opportunities[203]. Market and Stock Price Risks - The share price of the company's common stock may be volatile due to various market factors, including changes in operating performance and competitor performance[217]. - A significant portion of the company's total outstanding shares may be sold into the market in the near future, potentially causing a drop in share price[220]. - The company's governing documents contain provisions that could delay or prevent hostile takeovers, potentially affecting the trading price of its common stock[223]. Operational Challenges - The company must continuously adapt its IT systems to meet growth and technological advancements, with failure to do so potentially leading to customer loss and operational challenges[195]. - The company incurs increased costs associated with operating as a public company, including legal and accounting expenses, which may impact financial performance[211]. - The implementation of a new billing system poses risks of disruptions and increased costs, which could adversely affect financial operations[164].