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]

Core Insights - Clarivate PLC (CLVT) reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, with an earnings surprise of 16.67% [1] - The company posted revenues of $593.7 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.56%, although this represents a decline from year-ago revenues of $621.2 million [2] - Clarivate shares have declined approximately 29.3% year-to-date, contrasting with the S&P 500's decline of 6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $590.95 million, and for the current fiscal year, it is $0.64 on revenues of $2.33 billion [7] - The estimate revisions trend for Clarivate is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Computers - IT Services industry, to which Clarivate belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Clarivate's stock performance [5]

[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]

Core Insights - Clarivate Plc has launched DRG Commercial Analytics 360, a solution aimed at enhancing commercial performance for medtech companies by providing advanced insights into customer activity and market dynamics [1][2]. Group 1: Product Features - DRG Commercial Analytics 360 integrates the Procedure Finder's search capabilities with Clarivate's extensive provider and affiliations network, delivering real-world, data-driven intelligence [2]. - The platform enables precise omnichannel targeting, seamless integration, and intelligent bundling, allowing medtech companies to make data-driven decisions that improve patient access and business outcomes [3]. - The solution offers actionable intelligence by providing tailored insights into healthcare providers, their network affiliations, and the locations where procedures are performed [5]. Group 2: Market Impact - The platform categorizes procedures by type and eliminates code-level duplication, ensuring a reliable view of procedure volume and flow across the U.S. market [5]. - It provides 360-degree market visibility through modularized claims and code groupings, supporting accurate market sizing and informed resource allocation [5]. - Clarivate's data scientists apply tailored extrapolation methodologies to derive nuanced insights across various market segments, backed by expertise in medtech and U.S. healthcare [5].

Core Insights - Clarivate Plc has launched EndNote 2025, a reference management solution aimed at enhancing research efficiency and accuracy through new features including AI support and improved referencing tools [1][2]. Company Overview - Clarivate is recognized as a leading global provider of transformative intelligence, offering data, insights, analytics, and workflow solutions across various sectors including Academia & Government, Intellectual Property, and Life Sciences & Healthcare [4]. New Features of EndNote 2025 - The new version includes AI features that assist researchers in saving time, staying organized, and collaborating effectively during the research and writing process [2]. - Key features introduced in EndNote 2025 include: - A generative AI-powered tool for extracting insights from research papers [4]. - An enhanced machine learning tool for finding suitable journals for paper submissions [4]. - A feature to quickly insert highlighted quotes from PDFs along with citations [4]. - A redesigned summary panel for a more organized view of records [4]. - Tools for accessing citing articles and related records to build a comprehensive reference library [4]. - Improved access to Find Reference Updates and Find Full-Text tools for a streamlined user experience [4]. Future Developments - EndNote plans to introduce additional AI features later in 2025, including the EndNote Research Assistant, which will be available to subscribers [3].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Clarivate PLC due to lower revenues, with the actual results being crucial for stock price movement [1][2] Earnings Expectations - Clarivate is expected to report quarterly earnings of $0.12 per share, reflecting a year-over-year decrease of 14.3% [3] - Revenues are projected to be $573.32 million, down 7.7% from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has been revised down by 1.39% over the last 30 days, indicating a reassessment by analysts [4] - A positive Earnings ESP of +7.76% suggests analysts have recently become more optimistic about Clarivate's earnings prospects [10][11] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the deviation of actual earnings from consensus estimates, with positive readings being more reliable [6][7] - Clarivate's combination of a positive Earnings ESP and a Zacks Rank of 3 suggests a likelihood of beating the consensus EPS estimate [11] Historical Performance - In the last reported quarter, Clarivate exceeded the expected earnings of $0.20 per share by delivering $0.21, resulting in a surprise of +5% [12] - Over the past four quarters, Clarivate has beaten consensus EPS estimates twice [13] Industry Context - Roper Technologies, another player in the IT Services industry, is expected to post earnings of $4.73 per share, indicating a year-over-year increase of 7.3% [17] - Roper Technologies has also shown a positive Earnings ESP and has consistently beaten consensus EPS estimates in the past four quarters [18]

Core Viewpoint - Clarivate Plc will report its financial results for Q1 2025 on April 29, 2025, before market opens [1] Group 1: Financial Reporting - The financial results will be available on the Clarivate investor website [1] - A conference call and webcast will be held at 9:00 AM Eastern Time on the same day to review the results [2] - Interested parties can access the live audio broadcast through specific phone numbers for U.S. and international participants [3] Group 2: Company Overview - Clarivate is a leading global provider of transformative intelligence, offering data, insights, analytics, and expert services across various sectors [4]

Core Insights - Clarivate Plc has announced a strategic partnership with Iprova to integrate Iprova's solutions with IP management software IPfolio, enhancing the invention process and patent workflow [1][3] - The partnership coincides with the launch of Invention Studio 3, Iprova's advanced software hosted on Microsoft Azure, designed to facilitate the creation of valuable inventions and manage intellectual property [2][3] - Clarivate's acquisition of Rowan Patents, an AI-driven patent drafting software, further strengthens its position as a central hub for IP management, providing comprehensive support throughout the IP lifecycle [4] Company Overview - Clarivate is a global provider of transformative intelligence, offering data, insights, analytics, and workflow solutions across various sectors including Intellectual Property [5] - Iprova specializes in developing AI technologies that enhance human inventiveness, aiming to democratize innovation and streamline the invention process for enterprises [5]