CCC Intelligent Solutions Holdings, Inc. (NASDAQ:CCCS) Q2 2024 Earnings Conference Call July 30, 2024 5:00 PM ET Corporate Participants Bill Warmington - Vice President, Investor Relations Githesh Ramamurthy - Chairman and Chief Executive Officer Brian Herb - Chief Financial Officer Conference Call Participants Dylan Becker - William Blair Alexei Gogolev - JPMorgan Samad Samana - Jefferies Saket Kalia - Barclays Gabriela Borges - Goldman Sachs Shlomo Rosenbaum - Stifel Chris Moore - CJS Securities Gary Pres ...

Core Viewpoint - CCC Intelligent Solutions Holdings Inc. reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.08 per share, and showing an increase from $0.07 per share a year ago [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates two times over the last four quarters [2] - The recent earnings report resulted in an earnings surprise of 12.50% [8] - The upcoming quarterly earnings estimate is projected at $0.66 per share, reflecting a year-over-year increase of 57.1% [7] Group 2: Revenue Performance - CCC Intelligent Solutions reported revenues of $232.62 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 1.16%, compared to $211.71 million in the same quarter last year [9] - The company has exceeded consensus revenue estimates four times in the last four quarters [9] Group 3: Market Position and Outlook - The stock has underperformed the market, losing about 3% since the beginning of the year, while the S&P 500 has gained 14.5% [10] - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $241.46 million, and for the current fiscal year, it is $0.37 on revenues of $948.13 million [12] - The estimate revisions trend for the company is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [5] Group 4: Industry Context - The Insurance - Property and Casualty industry, to which CCC Intelligent Solutions belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable industry outlook [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [11]

Platform and Network - CCC's platform connects over 35,000 businesses and processes more than $1 trillion of historical data, leveraging AI and IoT for insurance and repair solutions[95] - The company has over 300 insurers and 30,000 repair facilities on its network, with 27 of the top 30 U.S. automotive insurance carriers as customers[97] - CCC's platform includes more than 5,500 parts suppliers and 13 of the top 15 automotive manufacturers based on new vehicle sales[97] AI and Technology Investments - CCC's AI solutions are actively used by over 100 U.S. auto insurers and 8,000 U.S. collision repairers in production environments[95] - The company is investing in new solutions to digitize the entire automotive claims lifecycle and expand into adjacent insurance lines[97] - CCC's technology investments focus on digitizing complex processes and interactions across the P&C insurance ecosystem[95] Financial Performance - Revenues increased by $20.9 million to $232.6 million, or 9.9%, driven by 7% growth from existing customer upgrades and 3% growth from new customers[114] - Software subscription revenues accounted for $223.0 million, or 96% of total revenue for the three months ended June 30, 2024[114] - Gross profit increased by $24.7 million to $177.3 million, or 16.2%, with a gross profit margin of 76.2%[116] - Operating income improved to $22.5 million from a loss of $73.2 million in the prior year[112] - Net income attributable to common stockholders was $20.2 million, compared to a loss of $97.7 million in the prior year[112] - Revenue increased by $43.2 million (10.4%) to $459.9 million for the six months ended June 30, 2024 compared to the same period in 2023[136] - Gross profit rose by $44.8 million (14.9%) to $345.2 million for the six months ended June 30, 2024[136] - Net income attributable to common stockholders improved by $114.0 million to $18.5 million for the six months ended June 30, 2024 compared to a loss of $95.5 million in the same period of 2023[136] - Adjusted Gross Profit increased to $359.1 million, with an Adjusted Gross Profit Margin of 78% for the six months ended June 30, 2024[160] - Adjusted EBITDA for the six months ended June 30, 2024, was $189.5 million, compared to $160.4 million for the same period in 2023[169] - Adjusted EBITDA margin for the six months ended June 30, 2024, was 41%, compared to 39% for the same period in 2023[165] - Adjusted operating income for the six months ended June 30, 2024, was $170.1 million, compared to $142.1 million for the same period in 2023[168] - Net income for the six months ended June 30, 2024, was $20.8 million, compared to a net loss of $95.2 million for the same period in 2023[169] - Adjusted Net Income for Q2 2024 was $56.2 million, compared to $47.8 million in Q2 2023[171] Customer Retention and Growth - CCC's Software Net Dollar Retention Rate (NDR) was 107% as of June 30, 2024, indicating strong revenue retention and growth from existing customers[101] - The Software Gross Dollar Retention Rate (GDR) was 99% as of June 30, 2024, reflecting high customer retention[109] - The company's Software NDR and GDR metrics exclude smaller customers representing less than 5% of total revenue within specific sales channels[102][107] - The company's customer agreements include long-term contracts, contributing to the stability of its revenue base[97] Expenses and Costs - Cost of revenues decreased by $3.8 million to $55.3 million, or 6.4%, primarily due to lower amortization of acquired technologies[115] - Research and development expense increased by $5.9 million to $49.3 million, or 13.6%, mainly due to higher stock-based compensation[117] - Selling and marketing expense increased by $0.4 million to $36.3 million, or 1.1%, driven by higher marketing costs[118] - General and administrative expense increased by $5.1 million to $51.3 million, or 11.1%, primarily due to higher personnel-related costs[119] - Amortization of acquired technologies decreased by $4.6 million, or 68.6%, to $2.1 million[115] - Operating expenses decreased by $45.4 million (12.6%) to $314.9 million for the six months ended June 30, 2024[136] - Research and development expenses increased by $14.4 million (17.0%) to $98.7 million for the six months ended June 30, 2024[136] - General and administrative expenses rose by $20.3 million (23.1%) to $108.3 million for the six months ended June 30, 2024[136] - Total stock-based compensation expense increased by $20.4 million (31.5%) to $85.1 million for the six months ended June 30, 2024[136] - Selling and marketing expense increased by $2.4 million to $71.9 million, or 3.5%, for the six months ended June 30, 2024[147] - General and administrative expense increased by $20.3 million to $108.3 million, or 23.1%, for the six months ended June 30, 2024[148] - Interest expense increased by $5.2 million to $33.1 million, or 18.7%, for the six months ended June 30, 2024[152] Cash Flow and Liquidity - Free Cash Flow for Q2 2024 was $36.2 million, down from $55.0 million in Q2 2023[172] - The company generated $107.0 million in cash flows from operating activities in the first six months of 2024[173] - As of June 30, 2024, the company had $237.9 million in cash and cash equivalents[174] - The company has $780.0 million in outstanding term loan principal as of June 30, 2024[174] - The weighted-average interest rate on the Term B Loan was 7.8% in Q2 2024, up from 7.4% in Q2 2023[177] - The company has $249.3 million available to borrow under the 2021 Revolving Credit Facility as of June 30, 2024[179] - Net cash provided by operating activities was $107.0 million for the six months ended June 30, 2024, compared to $102.6 million in 2023[180] - Net cash used in investing activities was $31.2 million for the six months ended June 30, 2024, primarily due to capitalized internally developed software projects and purchases of software, equipment, and property[180] - Net cash used in financing activities was $33.3 million for the six months ended June 30, 2024, mainly due to $52.7 million payments for employee tax liabilities related to the net share settlement of employee equity awards[180] - Change in cash and cash equivalents was $42.3 million for the six months ended June 30, 2024, compared to $79.8 million in 2023[180] - Proceeds from stock option exercises were $21.6 million for the six months ended June 30, 2024[180] Debt and Financing - The company entered into a $800.0 million Term B Loan and a $250.0 million Revolving Credit Facility under the 2021 Credit Agreement[61] - As of June 30, 2024, the outstanding amount on the Term B Loan was $780.0 million, with $8.0 million classified as current[61] - The weighted-average interest rate on the Term B Loan was 7.8% for the three months ended June 30, 2024[63] - The company has an outstanding standby letter of credit for $0.7 million, reducing the available borrowing under the Revolving Credit Facility to $249.3 million as of June 30, 2024[63] - The interest rate cap agreements have an aggregate notional amount of $600.0 million with a one-month SOFR cap rate of 4.00% through July 2025[65] - Cash received from interest rate cap agreements was $4.0 million for the six months ended June 30, 2024[65] - The aggregate fair value of the interest rate cap agreements was $6.1 million as of June 30, 2024[65] - The company entered into interest rate cap agreements with a $600.0 million notional amount and a 4.00% SOFR cap rate[179] Assets and Liabilities - Accounts receivable net of allowance for credit losses was $120.9 million as of June 30, 2024[45] - The allowance for credit losses and sales reserves was $4.1 million as of June 30, 2024[47] - No customer accounted for more than 10% of accounts receivable as of June 30, 2024[47] - Other current assets decreased from $32.36 million in December 2023 to $26.59 million in June 2024[48] - Software, equipment, and property increased from $285.42 million in December 2023 to $314.68 million in June 2024[49] - Depreciation and amortization expense for software, equipment, and property was $19.2 million for the six months ended June 30, 2024, up from $18.0 million in the same period in 2023[51] - Total lease costs for the six months ended June 30, 2024 were $4.90 million, compared to $4.89 million in the same period in 2023[52] - Goodwill impairment charge of $77.4 million was recorded for the China reporting unit in May 2023[54] - Intangible assets net carrying amount was $970.51 million as of June 30, 2024, down from $1.02 billion in December 2023[56] - Future amortization expense for intangible assets is projected to be $780.04 million from 2024 onwards[57] Stock and Compensation - Common stock issued and outstanding increased from 603.13 million shares in December 2023 to 622.80 million shares in June 2024[74] - Secondary offerings resulted in the sale of 141.45 million shares of common stock during the six months ended June 30, 2024[75] - The company granted 10,047,960 RSUs in the six months ended June 30, 2024, with 7,791,614 having time-based vesting and 2,256,346 having performance-based vesting[76] - 12,334,980 RSUs vested in the six months ended June 30, 2024, with 4,537,417 withheld for employee tax obligations[76] - Modifications to performance-based RSUs resulted in an incremental stock-based compensation expense of $67.0 million, recognized ratably over the modified performance periods[76] - The company granted 761,743 stock options under the Cayman Incentive Plans in the six months ended June 30, 2024, with an exercise price equal to the fair value of the underlying shares at the grant date[78] - As of June 30, 2024, there was $209.5 million of unrecognized stock compensation expense related to unvested time-based awards, expected to be recognized over a weighted-average period of 2.7 years[78] - As of June 30, 2024, there was $70.2 million of unrecognized stock-based compensation expense related to unvested performance-based awards, expected to be recognized over a weighted-average period of 1.3 years[78] - Stock-based compensation expense was $85.1 million for the six months ended June 30, 2024[180] Non-Cash Items and Adjustments - The company recognized a $16.0 million income from change in fair value of warrant liabilities for the three months ended June 30, 2024 compared to a $20.4 million expense in the same period of 2023[132] - The company recognized income of $14.4 million from a change in fair value of warrant liabilities for the six months ended June 30, 2024[154] - Net income for the six months ended June 30, 2024, was $20.8 million, adjusted for $111.2 million of non-cash items[180] - Depreciation and amortization expenses were $63.7 million for the six months ended June 30, 2024[180] - Increase in accounts receivable was $18.6 million due to timing of payments for the six months ended June 30, 2024[180] - Decrease in accrued expenses was $12.7 million due to timing of cash disbursements and employee incentive plan payments for the six months ended June 30, 2024[180]

Q2 2024 Financial Results Announcement [Second Quarter 2024 Financial Highlights](index=1&type=section&id=Second%20Quarter%202024%20Financial%20Highlights) CCC reported strong second quarter 2024 results, featuring a 10% year-over-year revenue increase to $232.6 million and a significant improvement in profitability Q2 2024 Key Financial Metrics (GAAP) | Metric | Q2 2024 (in millions) | Q2 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $232.6 | $211.7 | +10% YoY | | Gross Profit | $177.3 | $152.6 | +16.2% YoY | | Gross Margin | 76% | 72% | +4 p.p. | | Operating Income (Loss) | $22.5 | ($73.2) | Turnaround | | Net Income (Loss) | $21.4 | ($97.3) | Turnaround | Q2 2024 Key Financial Metrics (Non-GAAP) | Metric | Q2 2024 (in millions) | Q2 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Adjusted Gross Profit | $182.1 | $162.0 | +12.4% YoY | | Adjusted Gross Margin | 78% | 77% | +1 p.p. | | Adjusted Operating Income | $86.0 | $71.8 | +19.8% YoY | | Adjusted Net Income | $56.2 | $47.8 | +17.6% YoY | | Adjusted EBITDA | $95.8 | $80.9 | +18% YoY | | Adjusted EBITDA Margin | 41% | 38% | +3 p.p. | - As of June 30, 2024, the company held **$237.9 million** in cash and cash equivalents against **$780.0 million** in total debt[33](index=33&type=chunk) - Free cash flow for the quarter was **$36.2 million**, a decrease from **$55.0 million** in the prior-year quarter[33](index=33&type=chunk) [Business and Operational Highlights](index=1&type=section&id=2nd%20Quarter%20and%20Recent%20Business%20Highlights) The company launched CCC® Build Sheets to streamline the collision repair process and expanded its network, increasing the public float to over 70% - Launched CCC® Build Sheets, a new solution integrated into CCC ONE® that provides detailed vehicle specifications from the VIN to help create more accurate initial repair estimates and improve shop productivity[3](index=3&type=chunk) - The company's network grew by over **600** collision repair facilities in the first half of 2024, bringing the total to over **30,000** repair facilities[3](index=3&type=chunk) - The entire customer base now exceeds **35,000**, including insurers, parts suppliers, and automotive OEMs[3](index=3&type=chunk) - Two secondary offerings of common stock by existing shareholders were completed in May and July 2024, totaling **80 million shares**[11](index=11&type=chunk) - This increased the company's publicly traded float from approximately **30%** in October 2023 to over **70%**, with the company receiving no proceeds from these sales[11](index=11&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) CCC has issued financial guidance for the third quarter and full fiscal year of 2024, projecting revenue and Adjusted EBITDA ranges Financial Guidance as of July 30, 2024 | Metric | Third Quarter Fiscal 2024 (in millions) | Full Year Fiscal 2024 (in millions) | | :--- | :--- | :--- | | Revenue | $236.0 - $238.0 | $941.0 - $945.0 | | Adjusted EBITDA | $97.0 - $99.0 | $391.0 - $395.0 | Consolidated Financial Statements [Condensed Consolidated Statements of Operations](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) For the three months ended June 30, 2024, CCC reported revenues of $232.6 million, a significant increase from $211.7 million in the prior year, achieving an operating income turnaround Q2 2024 vs Q2 2023 Statement of Operations (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Revenues | $232,618 | $211,710 | | Gross Profit | $177,297 | $152,586 | | Total Operating Expenses | $154,784 | $225,773 | | Operating Income (Loss) | $22,513 | $(73,187) | | Net Income (Loss) Attributable to Stockholders | $20,224 | $(97,659) | | Diluted EPS | $0.03 | $(0.16) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2024, CCC's balance sheet showed total assets of $3.08 billion, with increased cash and cash equivalents and decreased total liabilities Balance Sheet Summary (in thousands) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $237,893 | $195,572 | | Total Current Assets | $408,934 | $349,999 | | Goodwill | $1,417,724 | $1,417,724 | | Total Assets | $3,079,158 | $3,051,040 | | Total Current Liabilities | $146,591 | $152,907 | | Long-Term Debt—Net | $764,249 | $767,504 | | Total Liabilities | $1,166,565 | $1,252,179 | | Total Stockholders' Equity | $1,893,646 | $1,782,277 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2024, net cash provided by operating activities was $107.0 million, with cash used in investing and financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $107,009 | $102,632 | | Net cash used in investing activities | $(31,224) | $(29,084) | | Net cash used in financing activities | $(33,328) | $6,614 | | Net change in cash and cash equivalents | $42,321 | $79,789 | Reconciliation of GAAP to Non-GAAP Measures [Reconciliation to Adjusted Gross Profit](index=11&type=section&id=RECONCILIATION%20OF%20GROSS%20PROFIT%20TO%20ADJUSTED%20GROSS%20PROFIT) For Q2 2024, GAAP Gross Profit of $177.3 million was adjusted to an Adjusted Gross Profit of $182.1 million, resulting in an Adjusted Gross Profit Margin of 78% Q2 Gross Profit Reconciliation (in thousands) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | GAAP Gross Profit | $177,297 | $152,586 | | Amortization of acquired technologies | $2,090 | $6,646 | | Stock-based compensation | $2,693 | $2,358 | | **Adjusted Gross Profit** | **$182,080** | **$162,021** | | GAAP Gross Profit Margin | 76% | 72% | | Adjusted Gross Profit Margin | 78% | 77% | [Reconciliation to Adjusted Operating Income](index=13&type=section&id=RECONCILIATION%20OF%20GAAP%20OPERATING%20INCOME%20(LOSS)%20TO%20ADJUSTED%20OPERATING%20INCOME) The company's Q2 2024 GAAP operating income of $22.5 million was reconciled to an adjusted operating income of $86.0 million, primarily due to stock-based compensation and amortization adjustments Q2 Operating Income Reconciliation (in thousands) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | GAAP Operating Income (Loss) | $22,513 | $(73,187) | | Stock-based compensation | $40,768 | $36,064 | | Amortization of intangible assets | $17,942 | $18,022 | | Amortization of acquired technologies | $2,090 | $6,646 | | Impairment of goodwill & intangibles | $0 | $82,311 | | Other adjustments | $2,670 | $1,537 | | **Adjusted Operating Income** | **$85,983** | **$71,824** | [Reconciliation to Adjusted EBITDA](index=14&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20INCOME%20(LOSS)%20TO%20ADJUSTED%20EBITDA) Adjusted EBITDA for Q2 2024 increased 18% to $95.8 million, reconciled from GAAP Net Income with adjustments for non-cash expenses and interest Q2 Net Income to Adjusted EBITDA Reconciliation (in thousands) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | GAAP Net Income (Loss) | $21,445 | $(97,344) | | Interest Expense, Net | $13,977 | $9,991 | | Income Tax (Benefit) Provision | $4,307 | $(2,281) | | D&A | $29,758 | $33,428 | | Stock-based compensation | $40,768 | $36,064 | | Change in fair value of warrant liabilities | $(15,963) | $20,375 | | Impairment of goodwill & intangibles | $0 | $82,742 | | Other adjustments | $1,505 | $(676) | | **Adjusted EBITDA** | **$95,797** | **$80,899** | [Reconciliation to Adjusted Net Income](index=15&type=section&id=RECONCILIATION%20OF%20GAAP%20NET%20INCOME%20(LOSS)%20TO%20ADJUSTED%20NET%20INCOME) For Q2 2024, Adjusted Net Income was $56.2 million, or $0.09 per diluted share, reflecting adjustments for non-cash items and tax effects Q2 Net Income to Adjusted Net Income Reconciliation (in thousands) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | GAAP Net Income (Loss) | $21,445 | $(97,344) | | Stock-based compensation | $40,768 | $36,064 | | Amortization (Intangibles & Acquired Tech) | $20,032 | $24,668 | | Change in fair value of warrant liabilities | $(15,963) | $20,375 | | Impairment of goodwill & intangibles | $0 | $82,742 | | Tax effect of adjustments | $(13,618) | $(16,587) | | Other adjustments | $3,522 | $(2,076) | | **Adjusted Net Income** | **$56,186** | **$47,842** | | Adjusted Diluted EPS | $0.09 | $0.07 | [Reconciliation to Free Cash Flow](index=16&type=section&id=RECONCILIATION%20OF%20NET%20CASH%20FLOW%20FROM%20OPERATING%20ACTIVITIES%20TO%20FREE%20CASH%20FLOW) In Q2 2024, the company generated $36.2 million in Free Cash Flow, derived from net cash provided by operating activities less capital expenditures Q2 Free Cash Flow Reconciliation (in thousands) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $51,774 | $69,554 | | Purchases of software, equipment, and property | $(15,561) | $(14,560) | | **Free Cash Flow** | **$36,213** | **$54,994** |

supersizer Investment action I recommended a buy rating for CCC Intelligent Solutions (NASDAQ:CCCS) when I wrote about it during last November, as I gained confidence in CCCS's ability to continue its positive growth trend. Based on my current outlook and analysis of CCCS, I recommend a buy rating. My key update to my thesis is that I expect CCCS to continue seeing low-teens growth as the growth runway is still long, and the new IX Cloud should make the CCCS platform even stickier, which will provide more o ...

Financial Data and Key Metrics Changes - In Q1 2024, total revenue was $227 million, representing an 11% year-over-year increase and exceeding guidance [80] - Adjusted EBITDA for the quarter was $94 million, also above guidance, with an adjusted EBITDA margin of 41% [80][108] - Software gross dollar retention (GDR) was 99%, consistent with previous quarters, indicating strong customer retention [105] - Software net dollar retention (NDR) was 107%, reflecting effective cross-sell and upsell strategies [106] - Free cash flow in Q1 was $39.6 million, up from $18.5 million in the prior year, with a trailing 12-month free cash flow margin of 24% [109] Business Line Data and Key Metrics Changes - Approximately 8 points of Q1 growth came from cross-sell, upsell, and adoption of existing solutions, while 3 points came from new logos, primarily in repair facilities and parts suppliers [104] - Emerging solutions contributed about 1 point of growth in Q1, with expectations for this to increase to 2 points for the full year [114] Market Data and Key Metrics Changes - The company noted a growing interest in digital transformation among customers, driven by macroeconomic changes and increasing operational complexity [84][86] - The CCC Intelligent Experience Cloud (IX Cloud) is enhancing customer capabilities to address complex problems in the P&C insurance economy [88] Company Strategy and Development Direction - The company is focused on leveraging AI and cloud technology to drive digital transformation for its customers, with a strong emphasis on innovation and customer value [80][92] - The introduction of the IX Cloud aims to simplify the deployment of new solutions and improve operational performance across the supply chain [86][88] - The company is committed to expanding its product offerings and enhancing shareholder value through increased liquidity and a broader shareholder base [100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on strategic and financial objectives, citing strong demand for AI-based solutions [101] - The company anticipates continued growth in emerging solutions and expects to see a step-up in contributions in the second half of 2024 [114] - Management highlighted the importance of providing rapid ROI solutions to customers amid rising premiums and operational complexities [57] Other Important Information - The company has transitioned to a fully public cloud infrastructure, which is expected to enhance operational efficiency and scalability [83] - The IX Cloud is designed to integrate seamlessly with existing customer workflows, providing enhanced functionality without requiring upgrades [86][88] Q&A Session Summary Question: What is the revenue opportunity from products like Estimate-STP and Subrogation? - Management noted that these products are highly attractive for replacing human interactions with AI, and they are seeing increasing adoption [9][10] Question: Can you elaborate on the sequential increase in stock-based compensation? - Management indicated that Q1 is expected to be the high watermark for stock-based compensation as a percentage of revenue, with normalization expected in 2025 [31] Question: How is the company addressing the complexities of uninsured or underinsured drivers? - Management acknowledged the increased complexity in claims processing due to these issues but noted it hasn't materially affected the overall claims costs for customers [38] Question: What is the expected contribution from emerging solutions in the future? - Management expects emerging solutions to contribute 2 points of growth in 2024, with long-term potential for 3 to 4 points as adoption increases [26][114] Question: How is the company planning to expand its international presence? - Management stated that while they are exploring international opportunities, the current focus remains on domestic product expansion [59]

CCC Intelligent Solutions Holdings Inc. (CCCS) came out with quarterly earnings of $0.09 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.07 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post earnings of $0.09 per share when it actually produced earnings of $0.09, delivering no surprise.Over the last four quarters, the company has surpassed consensus EPS estimates just once.CCC Intelligent ...

Revenue Performance - Total revenues for Q1 2024 were $227.237 million, an increase of 10.8% from $204.919 million in Q1 2023[61] - Software subscriptions revenue reached $218.069 million in Q1 2024, up from $196.256 million in Q1 2023, reflecting a growth of 11.1%[61] - Revenue recognized for the three months ended March 31, 2024, was $115,413 million, compared to $103,187 million for the same period in 2023, representing a growth of approximately 11.9%[80] - Total deferred revenue at the end of the period was $47,560 million, up from $41,422 million as of March 31, 2023, indicating an increase of about 14.4%[80] - Revenue for the three months ended March 31, 2024, increased by $22.3 million to $227.2 million, representing a growth of 10.9% compared to the same period in 2023[143] - Software subscription revenues accounted for $218.1 million, or 96% of total revenue during the three months ended March 31, 2024[143] - Revenue from the United States for the three months ended March 31, 2024, was $225,566,000, compared to $203,027,000 in 2023, indicating a growth of about 11.1%[149] - Revenue from China for the three months ended March 31, 2024, was $1,671,000, down from $1,892,000 in 2023, reflecting a decline of approximately 11.7%[149] Financial Position - Accounts receivable as of March 31, 2024, was $102.007 million, slightly down from $102.365 million as of December 31, 2023[62] - Deferred revenues increased to $45.254 million as of March 31, 2024, compared to $43.567 million at the end of 2023, indicating a growth of 3.9%[62] - The expected term for financial instruments decreased to 2.3 years as of March 31, 2024, from 2.6 years at the end of 2023[64] - The risk-free interest rate increased to 4.53% as of March 31, 2024, compared to 4.10% at the end of 2023[64] - The company experienced a decrease in cash and cash equivalents, ending the period at $191.188 million, down from $338.354 million at the end of the same period in 2023[75] - Accounts receivable as of March 31, 2024, was $106,799 million, slightly down from $107,939 million as of December 31, 2023[86] Profitability and Loss - For the three months ended March 31, 2024, the Company reported a net loss of $597,000 compared to a net income of $2.184 million for the same period in 2023[75] - The net loss attributable to common stockholders for Q1 2024 was $(1.739) million, compared to a net income of $2.184 million in Q1 2023[97] - The company reported a comprehensive loss of $(1.814) million for Q1 2024, down from a comprehensive income of $2.218 million in Q1 2023[97] - The company recognized an income tax benefit of $4.2 million for the three months ended March 31, 2024, compared to $0.8 million for the same period in 2023, reflecting a significant increase in tax benefits[85] - The company made income tax payments of $576 thousand for the three months ended March 31, 2024, compared to $224 thousand for the same period in 2023[85] Operating Expenses - Total operating expenses increased to $160.065 million in Q1 2024 from $134.458 million in Q1 2023, primarily due to higher research and development costs[97] - Cost of revenues increased by $2.2 million to $59.4 million, or 3.9%, for the three months ended March 31, 2024[145] - Cost of revenues, exclusive of amortization of acquired technologies, increased by $2.4 million to $52.8 million, or 4.7%[145] - Amortization of acquired technologies was $6.6 million for the three months ended March 31, 2024[146] - The amortization of intangible assets for the three months ended March 31, 2024, was $24.509 million, slightly down from $24.751 million in the same period of 2023[75] Goodwill and Intangible Assets - The Company recorded a goodwill impairment charge of $77.4 million due to adverse impacts from market conditions and increased interest rates affecting its China reporting unit[70] - The total accumulated impairment loss for goodwill as of March 31, 2024, was $676.403 million[71] - The accumulated impairment loss as of December 31, 2023, was $77.4 million, with no changes in the carrying amount of goodwill during the three months ended March 31, 2024[91] - As of March 31, 2024, the net carrying amount of total intangible assets was $990.537 million, with a gross carrying amount of $1,666.940 million and accumulated amortization of $676.403 million[71] - The total intangible assets balance as of March 31, 2024, was $1,015,046 million, with customer relationships and acquired technologies contributing significantly to this total[92] Strategic Focus and Growth Opportunities - The company is focused on expanding its SaaS platform for the property and casualty insurance economy, with operations primarily in the US and China[59] - Future growth opportunities are anticipated through the development and marketing of new technology solutions[59] - The company is investing in new solutions to digitize the entire automotive claims lifecycle and expand into adjacent insurance lines[113] - Approximately $1,533 million of revenue is expected to be recognized from remaining performance obligations, with about $617 million expected in the next twelve months[124] - Software Net Dollar Retention (NDR) was 107% as of March 31, 2024, indicating strong customer retention and expansion[139] Customer Base - The company has over 35,000 total customers, including more than 29,500 automotive collision repair facilities and 27 of the top 30 automotive insurance carriers in the U.S.[113] - The increase in revenue was driven by 8% growth from existing customer upgrades and 3% growth from new customers[144] Derivative Instruments and Fair Value - The fair value of interest rate cap agreements was estimated at $6.9 million as of March 31, 2024, compared to $6.2 million as of December 31, 2023[83] - The estimated fair value of private warrants was $53,086 million as of March 31, 2024, reflecting the company's stock price on the valuation date[83] - The company reported a change in fair value of derivative instruments resulting in a loss of $718,000 for the three months ended March 31, 2024[75] Other Financial Metrics - The Company performed a qualitative assessment for its remaining reporting unit with goodwill and determined no indicators of impairment were present as of November 30, 2023[70] - The company recognized $8.228 million in prepaid SaaS costs as of March 31, 2024, compared to $7.833 million as of December 31, 2023[114] - The company made cash payments for operating leases of $1.8 million in Q1 2024, compared to $0.9 million in Q1 2023[115] - The Company had a gross carrying amount of customer relationships valued at $1,291.830 million as of March 31, 2024[71] - Approximately 36,824,894 common stock equivalent shares were excluded from the computation of diluted per share amounts for the three months ended March 31, 2024, due to their anti-dilutive effect[148] - The Sponsor Vesting Shares, totaling 8,625,000 shares, are non-transferable and subject to forfeiture on the tenth anniversary of the Business Combination if certain triggering events do not occur[148]

Profitability Adjusted EBITDA $89.0 million to $91.0 million $389.0 million to $395.0 million | --- | --- | --- | --- | --- | |-----------------------------------------------------------------------------------------------------------------|-------|------------------------------------|-------|---------------------| | | | March 31, \n2024 \n(Unaudited) | | December 31, \n2023 | | ASSETS | | | | | | CURRENT ASSETS: | | | | | | Cash and cash equivalents Accounts receivable—Net of allowances of $4,792 and $5,57 ...

CCC Intelligent Solutions Holdings Inc. (NASDAQ:CCCS) Q4 2023 Earnings Conference Call February 28, 2024 5:00 PM ET Company Participants Bill Warmington - VP, IR Githesh Ramamurthy - Chairman and CEO Brian Herb - CFO Conference Call Participants Alexei Gogolev - JPMorgan Samad Samana - Jefferies Callie Valenti - Goldman Sachs Peter Burkly - Evercore ISI Saket Kalia - Barclays Dylan Becker - William Blair Josh Baer - Morgan Stanley Matt Bullock - Bank of America Shlomo Rosenbaum - Stifel Operator Good day, a ...