Core Insights - Clarivate Plc has introduced Pathway Maps in its OFF-X platform, enhancing translational safety intelligence in drug development [1][3] - Over 30% of drug development failures are linked to safety issues, necessitating earlier identification of potential liabilities [1][2] - The integration of visual disease biology with comprehensive safety data allows researchers to make faster, more informed decisions [2][3] Company Overview - Clarivate is a global provider of transformative intelligence, offering data, insights, analytics, and workflow solutions across various sectors including Life Sciences & Healthcare [5] - The company aims to empower researchers with tools that streamline workflows and provide actionable insights to improve patient outcomes [3][5] Product Features - OFF-X supports researchers throughout the drug development lifecycle, from early discovery to post-marketing surveillance [4] - The platform combines proprietary physiological and disease pathway visualizations with curated safety data, enhancing risk evaluation [3][4] - The addition of Pathway Maps allows for disease-specific visualizations of key signaling pathways, facilitating quicker identification of safety liabilities [2][3]

Core Insights - The investment approach focuses on identifying businesses with potential for long-term growth and significant terminal value generation [1] - Emphasis is placed on understanding core business economics, including competitive advantages, unit economics, reinvestment opportunities, and management quality [1] - The analyst aims to provide accessible and analytical insights to help readers identify high-quality, long-term investment opportunities [1] Investment Philosophy - The investment strategy is fundamentally driven, prioritizing sectors with strong secular growth trends [1] - The analyst has a decade of self-education in investing and currently manages personal funds sourced from friends and family [1] - The goal is to share insights and receive feedback from the investment community to enhance understanding of long-term equity value drivers [1]

Financial Data and Key Metrics Changes - Q1 revenue was $594 million, with a net loss of $104 million attributed to higher restructuring expenses related to the value creation plan [22][23] - Adjusted diluted EPS was $0.14, flat compared to the same period last year [23] - Adjusted EBITDA margin increased by more than one percentage point due to improved cost management [24] Business Line Data and Key Metrics Changes - Organic annual contract value (ACV) grew sequentially, with total organic revenue increasing for the first time in over a year, and recurring organic revenue grew nearly 1% [6][8] - In the IP Patent Annuity business, organic recurring revenue grew 5% due to higher volumes [12] - Subscription renewal rates in Life Science and Health improved to 90%, an increase of three percentage points over the prior year [13] Market Data and Key Metrics Changes - The mix of recurring revenue to total revenue is now 83%, an improvement of 200 basis points compared to the prior year [6] - The company noted that less than 3% of total revenue comes directly from the U.S. Federal government, indicating limited exposure to government funding cuts [10] Company Strategy and Development Direction - The company is focused on optimizing revenue, improving sales execution, and accelerating innovation through a subscription-centric model [5][8] - The value creation plan is on track, with a focus on business model optimization, sales execution, and accelerated product innovation [15][18] - The company is evaluating strategic alternatives to unlock value and maximize shareholder returns [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of research in academia despite potential government funding cuts, indicating minimal impact on business so far [39][40] - The company remains cautious about the macroeconomic environment but believes its products' recurring nature positions it well during uncertain times [34] Other Important Information - Free cash flow was strong at $110 million, with nearly half used for share repurchases [26][28] - The company expects annual contract value to accelerate by approximately 60 basis points to 1.5% at the midpoint of the range [29] Q&A Session Summary Question: Concerns about government funding exposure - Management indicated minimal impact from government actions and noted strong renewal rates in the A and G segment [39][42] Question: Inquiry about private equity interest in the IP segment - Management stated they are evaluating strategic options but had no specific comments on the private equity interest [47] Question: Drivers behind higher renewal volumes in IP - The primary driver for the increase in organic recurring revenues was a return to healthy growth in patent and trademark renewals [50][51] Question: Impact of funding cuts on large universities - Management confirmed that less than half of the A and G segment business is in the U.S., with a significant portion already renewed this year [55] Question: Expectations for transactional revenue growth - Management remains conservative about transactional revenue growth, focusing on improving recurring revenues [58] Question: Changes to the sales incentive model - Management highlighted upgrades in sales leadership and changes to the incentive model to reward subscription revenue growth [66] Question: Cyclical nature of patent renewals - Management acknowledged that while patent renewals can be cyclical, they expect the long-term trend to remain positive [70]

Q1 2025 Earnings Call Apr 29, 2025 Safe Harbor Statement and Non-GAAP Financial Measures Forward-Looking Statements This communication includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements" within the meaning of the "safe harbor provisions" of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can g ...

Core Insights - Clarivate PLC (CLVT) reported revenue of $593.7 million for the quarter ended March 2025, reflecting a year-over-year decline of 4.4% [1] - The earnings per share (EPS) for the same period was $0.14, unchanged from the previous year, with a surprise of +16.67% compared to the consensus estimate of $0.12 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $573.32 million, resulting in a surprise of +3.56% [1] Revenue Breakdown - Intellectual Property revenues were $192.70 million, surpassing the average estimate of $187.39 million, but showing a year-over-year decline of 4.1% [4] - Life Sciences & Healthcare revenues reached $98.30 million, exceeding the average estimate of $90.13 million, with a year-over-year decline of 4.2% [4] - Academia & Government revenues totaled $302.70 million, above the average estimate of $294.34 million, reflecting a year-over-year decline of 4.7% [4] - Transactional and other revenues were reported at $99.20 million, significantly higher than the estimated $63 million, but down 14.2% year-over-year [4] - Re-occurring revenues amounted to $105.90 million, slightly below the average estimate of $107.83 million, showing a year-over-year increase of 3.3% [4] - Subscription revenues were $388.60 million, below the average estimate of $409.15 million, indicating a year-over-year decline of 3.6% [4] Stock Performance - Clarivate's shares have returned -8.7% over the past month, compared to a -0.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Q1 revenue was $594 million, with a net loss of $104 million attributed to higher restructuring expenses related to the value creation plan [23][24] - Adjusted diluted EPS was $0.14, flat compared to the same period last year [24] - Adjusted EBITDA margin increased by more than one percentage point due to internal cost efficiencies, with free cash flow of $110 million [9][28] Business Line Data and Key Metrics Changes - Organic annual contract value (ACV) grew sequentially, driven by improved subscription renewals and new business wins [7][10] - Organic recurring revenue grew nearly 1%, with renewal rates across the subscription base improving by one percentage point [8][9] - In the IP Patent Annuity business, organic recurring revenue grew 5% due to higher volumes, with a double-digit increase in search volume for the Derwent innovation platform [13][19] Market Data and Key Metrics Changes - The mix of recurring revenue to total revenue is now 83%, an improvement of 200 basis points compared to last year [8][18] - Subscription renewal rates in the Life Science and Health segment improved to 90%, an increase of three percentage points over the prior year [14] Company Strategy and Development Direction - The company is focused on optimizing revenue, improving sales execution, and accelerating innovation through a subscription-centric model [6][10] - The value creation plan is on track despite a volatile macro environment, with a focus on business model optimization and increasing the subscription revenue mix [10][17] - The company is evaluating strategic alternatives to unlock value and maximize shareholder returns [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of research in academia despite potential government funding cuts, indicating minimal impact on business so far [11][40] - The company remains cautious against a challenging macroeconomic environment but believes its products' recurring nature positions it well [35] Other Important Information - The company has engaged with advisors to analyze options for maximizing shareholder value and will provide updates when appropriate [20] - The company launched new subscription platforms and AI-powered features, enhancing competitive advantage and customer engagement [19][20] Q&A Session Summary Question: Concerns about government funding exposure - Management indicated minimal impact from government actions in Q1 and noted that half of government contracts have already been renewed [40][41] Question: Inquiry about private equity interest in the IP segment - Management stated they are evaluating strategic options but had no specific comments on the private equity interest [48][49] Question: Drivers behind higher renewal volumes in IP - The primary driver for the increase in organic recurring revenues was a return to healthy growth in patent and trademark renewals [52][55] Question: Impact of U.S. government funding on revenue - Less than half of the A and G segment business is in the U.S., with a meaningful portion already renewed this year, indicating confidence in guidance range [59][60] Question: Expectations for transactional revenue growth - Management expects transactional revenue to remain soft in the current macro environment, focusing on improving recurring revenues [62][63] Question: Changes to the sales incentive model - Management highlighted upgrades in sales leadership and changes to the customer success organization, which have contributed to improved renewal rates [67][68] Question: Cyclical nature of patent renewals - Management acknowledged that while patent renewals can fluctuate, the long-term trend is expected to head back in a healthy direction [72][73]

Clarivate PLC (CLVT) came out with quarterly earnings of $0.14 per share, beating the Zacks Consensus Estimate of $0.12 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 16.67%. A quarter ago, it was expected that this company would post earnings of $0.20 per share when it actually produced earnings of $0.21, delivering a surprise of 5%.Over the last four quarters, the company has su ...

[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Clarivate Plc's unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, statements of operations, comprehensive income, equity, and cash flows [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$11.49 billion** as of March 31, 2025, with significant intangible assets and goodwill, while total liabilities increased to **$6.47 billion** Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $354.0 | $295.2 | | Other intangible assets, net | $8,341.4 | $8,441.2 | | Goodwill | $1,566.6 | $1,566.6 | | **Total Assets** | **$11,492.7** | **$11,490.2** | | **Liabilities & Equity** | | | | Current portion of deferred revenues | $978.8 | $859.1 | | Long-term debt | $4,521.1 | $4,518.7 | | **Total Liabilities** | **$6,465.6** | **$6,351.2** | | **Total Shareholders' Equity** | **$5,027.1** | **$5,139.0** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss of **$103.9 million** on revenues of **$593.7 million** for Q1 2025, an increased loss compared to the prior year due to lower revenues and higher restructuring charges Condensed Consolidated Statements of Operations (in millions, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $593.7 | $621.2 | | Total operating expenses | $614.5 | $616.2 | | Income (loss) from operations | $(20.8) | $5.0 | | Net income (loss) | $(103.9) | $(75.0) | | Net income (loss) attributable to ordinary shares | $(103.9) | $(93.8) | | Basic and Diluted EPS | $(0.15) | $(0.14) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$171.2 million** in Q1 2025, while net cash used in financing activities significantly decreased to **$56.6 million** due to lower debt repayments and no preferred dividends Condensed Consolidated Statements of Cash Flows Highlights (in millions) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $171.2 | $176.2 | | Net cash used for investing activities | $(60.9) | $(64.4) | | Net cash used for financing activities | $(56.6) | $(95.2) | | Net change in cash and cash equivalents | $58.8 | $10.3 | | Cash and cash equivalents, end of period | $354.0 | $381.0 | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed disclosures cover accounting policies, revenue recognition, intangible assets, debt, equity, restructuring, segment performance, and legal contingencies, including revenue disaggregation and debt composition - The company operates and reports in three segments: Academia & Government (A&G), Intellectual Property (IP), and Life Sciences & Healthcare (LS&H)[29](index=29&type=chunk) Revenue by Type (in millions) | Revenue Type | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Subscription revenues | $388.6 | $403.1 | | Re-occurring revenues | $105.9 | $102.5 | | Transactional revenues | $99.2 | $115.6 | | **Total Revenues** | **$593.7** | **$621.2** | Total Debt Outstanding (in millions) | Type | Maturity | Carrying Value (Mar 31, 2025) | | :--- | :--- | :--- | | Senior Secured Notes | 2026 | $700.0 | | Senior Secured Notes | 2028 | $921.2 | | Senior Notes | 2029 | $921.4 | | Term Loan Facility | 2031 | $1,999.2 | | **Total debt outstanding** | | **$4,570.8** | - In Q1 2025, the company incurred **$24.7 million** in restructuring charges, primarily related to severance costs under its new 'Value Creation Plan' initiated in Q4 2024[67](index=67&type=chunk) - The company is involved in putative securities class action lawsuits alleging weaknesses in internal controls and misleading statements related to product quality and organic growth; the company believes the claims lack merit and is vigorously defending against them[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, key indicators, and liquidity, noting a **4.4%** revenue decline to **$593.7 million** due to divestitures, with **0.3%** organic growth and solid liquidity [Key Performance Indicators](index=22&type=section&id=Key%20Performance%20Indicators) Key performance indicators include organic revenue growth, ACV, renewal rates, Adjusted EBITDA, and Free Cash Flow, with organic ACV growing **1.2%** and the annual renewal rate improving to **94%** - Total Annualized Contract Value (ACV) was **$1,526.1 million** as of March 31, 2025, a decline of **3.6%** from the prior year, mainly due to the ScholarOne divestiture and product wind-downs[94](index=94&type=chunk) - Organic ACV grew **1.2%** year-over-year, driven by price increases[94](index=94&type=chunk) - The annual renewal rate for the three months ended March 31, 2025, was **94%**, compared to **93%** for the same period in 2024[96](index=96&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 revenues decreased **4.4%** to **$593.7 million** due to disposals and unfavorable foreign exchange, despite **0.3%** organic growth, leading to an operating loss of **$20.8 million** Revenue Change Analysis by Type (Q1 2025 vs Q1 2024) | Revenue Type | Change $ | Change % | Organic % Change | | :--- | :--- | :--- | :--- | | Subscription | $(14.5)M | (3.6)% | (0.6)% | | Re-occurring | $3.4M | 3.3% | 5.3% | | Transactional | $(16.4)M | (14.2)% | (2.3)% | | **Total** | **$(27.5)M** | **(4.4)%** | **0.3%** | Revenue Change Analysis by Segment (Q1 2025 vs Q1 2024) | Segment | Change $ | Change % | Organic % Change | | :--- | :--- | :--- | :--- | | A&G | $(15.0)M | (4.7)% | 0.7% | | IP | $(8.2)M | (4.1)% | 1.3% | | LS&H | $(4.3)M | (4.2)% | (3.0)% | - Restructuring charges increased to **$24.7 million** from **$9.5 million** year-over-year, primarily due to the new Value Creation Plan[118](index=118&type=chunk) Adjusted EBITDA Reconciliation (in millions) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) | $(103.9) | $(75.0) | | **Adjusted EBITDA** | **$233.2** | **$236.3** | | Net income (loss) margin | (17.5)% | (12.1)% | | **Adjusted EBITDA margin** | **39.3%** | **38.0%** | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$354.0 million** cash and **$692.8 million** available credit, reporting **$171.2 million** operating cash flow and **$110.3 million** free cash flow for the quarter - As of March 31, 2025, the company had **$354.0 million** of cash and cash equivalents and **$692.8 million** of available borrowing capacity under its revolving credit facility[126](index=126&type=chunk) Free Cash Flow (non-GAAP, in millions) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $171.2 | $176.2 | | Capital expenditures | $(60.9) | $(64.4) | | **Free cash flow** | **$110.3** | **$111.8** | - The company has **$450.0 million** of availability remaining under its share repurchase program, which is authorized through December 31, 2026[134](index=134&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks, primarily foreign currency and interest rate exposures, have not materially changed from those disclosed in its most recent annual Form 10-K - Market risks as of March 31, 2025, have not materially changed from those discussed in the annual report on Form 10-K for the year ended December 31, 2024[140](index=140&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during Q1 2025 - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[142](index=142&type=chunk) - No changes occurred in internal control over financial reporting during Q1 2025 that materially affected, or are reasonably likely to materially affect, these controls[143](index=143&type=chunk) [Part II. Other Information](index=29&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section directs readers to Note 13 of the financial statements for detailed information regarding the company's legal proceedings - For information on legal proceedings, the report directs readers to Note 13 - Commitments and Contingencies in Part I, Item 1[145](index=145&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its most recent annual report on Form 10-K - There have been no material changes to the risk factors from those reported in the company's most recent Form 10-K[146](index=146&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased approximately **11.7 million** ordinary shares for **$50.0 million**, with **$450 million** remaining under the share repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Avg. Price Paid | Shares Purchased Under Program | Approx. Value Remaining Under Program | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | 121,079 | $5.09 | — | $500M | | Feb 2025 | 1,983,224 | $4.51 | 1,957,196 | $491M | | Mar 2025 | 11,278,186 | $4.25 | 9,695,062 | $450M | | **Total** | **13,382,489** | | **11,652,258** | | - The share repurchase program, authorized in December 2024, allows for up to **$500.0 million** in repurchases through December 31, 2026[148](index=148&type=chunk) [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) Gordon Samson, President of Intellectual Property, entered a Rule 10b5-1 trading plan on March 14, 2025, to potentially sell up to **150,000** ordinary shares - Gordon Samson, President, Intellectual Property, entered into a Rule 10b5-1 trading plan on March 14, 2025, to sell up to **150,000** ordinary shares[149](index=149&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and the Interactive Data File (Inline XBRL) - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as exhibits[152](index=152&type=chunk)

London, UK -- April 29, 2025 Clarivate Plc (NYSE: CLVT) (the "Company" or "Clarivate"), a leading global provider of transformative intelligence, today reported results for the first quarter ended March 31, 2025. Total revenues for the first quarter of 2025 was $593.7 million, compared to total revenues of $621.2 million for the first quarter of 2024. Organic revenues for the first quarter of 2025 increased 0.3%, compared to the first quarter of 2024, due to a 0.6% increase in organic recurring revenues, pa ...

Core Insights - Clarivate Plc reported a total revenue of $593.7 million for Q1 2025, a decrease of 4.4% from $621.2 million in Q1 2024, primarily due to inorganic divestitures and foreign currency translation impacts [2][7] - The company experienced a net loss of $103.9 million, compared to a net loss of $75.0 million in the same quarter of the previous year [3][6] - Adjusted net income for Q1 2025 was $95.8 million, unchanged on a per share basis at $0.14 compared to Q1 2024 [3][32] Financial Performance - Organic revenues increased by 0.3% in Q1 2025, driven by a 0.6% increase in organic recurring revenues, while organic transactional revenues decreased [2][8] - Subscription revenues fell by 3.6% to $388.6 million, largely due to the divestiture of the ScholarOne product group [7][27] - Operating cash flow was $171.2 million, down from $176.2 million in the prior year, while free cash flow decreased slightly to $110.3 million [4][10] Strategic Initiatives - The CEO highlighted improved sequential organic Annual Contract Value (ACV) growth due to higher renewals and new business wins, emphasizing the effectiveness of the Value Creation Plan [5][11] - The company reaffirmed its full-year 2025 outlook, projecting organic ACV growth of 1.0% to 2.0% and total revenues between $2.28 billion and $2.40 billion [12][14] Balance Sheet and Cash Flow - As of March 31, 2025, cash and cash equivalents increased to $354.0 million, while total debt remained stable at $4,570.8 million [9][10] - The company repurchased $50 million of ordinary shares as part of its capital allocation strategy [4][11] Revenue Breakdown - Recurring revenues, which include subscription and re-occurring revenues, saw a slight organic increase of 0.6%, while transactional revenues dropped by 14.2% [8][27] - The decline in total ACV was primarily attributed to the divestiture of the ScholarOne product group and the wind-down of certain product lines [25][27]