Clarivate (CLVT) FY Conference Summary Company Overview - **Company**: Clarivate (CLVT) - **Industry**: Information services, workflow solutions, particularly in university, pharmaceutical, and legal sectors Key Points and Arguments Divestiture Plans - Clarivate is evaluating options to sell its IP business segment and expects to communicate the outcome by year-end results in February [3][5] - Maroon Murad will join as president of the IP segment effective September 8, indicating a commitment to innovation and growth in this area [4] Value Creation Plan (VCP) - The VCP launched in 2024 is on track, with measurable progress across key initiatives [7] - Annual Contract Value (ACV) and renewal rates are increasing, with 88% of revenue now from subscription and recurring sources, up from 80% last year [8][12] - Major operational changes in the sales organization have been completed, enhancing customer engagement and retention [9][10] Financial Metrics - Organic recurring revenue mix is currently at 88%, expected to stabilize at 84% for the full year due to disposals [12][14] - The company aims for mid-single-digit organic growth in the long term, with expectations of returning to a 3-4% growth rate in the A and G segment [29][68] AI Integration and Innovation - Clarivate has launched 10 AI-powered products and is aggressively introducing new AI capabilities across its segments [10][11] - The company has established an AI innovation center of excellence, with 4,800 academic institutions currently using its AI solutions [52][58] - AI is seen as a significant growth driver, particularly in the IP business, as more inventions seek patent protection [39][41] Segment Performance - **A and G Segment**: 93% of the A and G business is recurring with a 96% renewal rate. The introduction of subscription-based products is expected to drive growth [20][21][23] - **IP Business**: Experienced 1.5% growth in the first half of the year, with expectations of mid-single-digit growth in the long term [36][38] - **Life Sciences and Healthcare (LS and H)**: Stability in R&D spending and improved renewal rates for the Cortella suite of products. New product launches are anticipated to drive growth [47][50] Capital Allocation Strategy - Clarivate expects to generate mid-$300 million in free cash flow, focusing on share repurchases and debt repayment rather than M&A in the near term [65][66] - The company aims to reduce leverage over time while capitalizing on attractive stock value [66][67] Long-term Growth Outlook - Clarivate anticipates organic growth rates to align with industry growth rates, with a focus on increasing the proportion of subscription revenue [68][70] Additional Important Insights - The company is optimistic about growth opportunities in both developed and developing markets, fueled by continuous innovation and AI advancements [27][28][30] - Clarivate's strategic focus on enhancing its product offerings and customer engagement is expected to yield positive results in the coming years [11][19][50]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $621 million, bringing the first half total to $1.2 billion, with a net loss of $72 million, an improvement attributed to the absence of a non-cash impairment charge from the previous year [22][23] - Adjusted diluted EPS was $0.18, with operating cash flow of $116 million in the quarter [23][27] - Free cash flow for Q2 was $50 million, totaling $161 million for the first half of the year [27][28] - The mix of organic recurring revenue to total revenue for the first half improved to 88%, an increase of 800 basis points compared to the previous year [21] Business Line Data and Key Metrics Changes - The A and G business achieved 2% organic ACV and subscription revenue growth, with a 96% renewal rate [8][11] - The IP segment returned to organic growth in patent annuities, with recurring revenue rising by about 1.5% in the first half of 2025 [13][14] - Life Science and Healthcare segment saw a return to organic ACV growth, supported by a long-term multimillion-dollar agreement with a top pharmaceutical company [18][19] Market Data and Key Metrics Changes - The company noted a market-wide surge in AI innovation, which is expected to drive growth in the patent renewal business [14][15] - The U.S. dollar weakened against foreign currencies, providing a favorable foreign exchange translation impact on revenue [26][34] Company Strategy and Development Direction - The company is focused on a value creation plan (VCP) launched in 2024, emphasizing AI-led product innovation, improved sales execution, and operational efficiency [6][8] - A shift away from transactional sales towards subscription models is expected to enhance recurring revenue growth [10][11] - The company is undertaking a strategic review to assess alternatives across the business, with results expected to be communicated in February 2026 [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the renewal rates and the resilience of their products amid funding pressures in the U.S. market [54] - The company anticipates continued organic growth in the second half of the year, driven by improvements in the A and G and Life Sciences segments [36][37] - Management highlighted the importance of their products being mission-critical for universities, which supports renewal confidence [54] Other Important Information - The company has launched 10 AI-powered products since the launch of the VCP plan [9] - A new sales incentive plan has been initiated to refocus on subscription and recurring revenue, contributing to improved sales momentum [58][60] Q&A Session Summary Question: IP business rebound and AI opportunities - Management noted that the rebound in the IP annuity market is expected to benefit from increased patent filings related to AI, particularly in Asia and China [40][41][42] Question: Potential changes in U.S. patent filing fee structure - Management indicated that they are well-positioned to adapt to any changes in the IP ecosystem due to their long-standing presence and collaboration with patent offices and law firms [46][47][48] Question: University funding cuts and renewal outlook - Management reported strong renewal rates and emphasized the critical nature of their products for universities, which supports confidence in future renewals [53][54] Question: Sales momentum and subscription focus - Management expressed optimism about the sales momentum driven by the new sales incentive plan, focusing on subscription and recurring revenue [58][60] Question: Life Sciences and Healthcare market dynamics - Management highlighted stable R&D spending and improvements in the subscription business within Life Sciences and Healthcare, attributing this to investments in the Cortellis suite of products [64][66] Question: Delays in disposals - Management explained that one disposal is taking longer due to customer requests for more time to transition to alternative offerings [69][71]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $621 million, bringing the first half total to $1.2 billion, with changes attributed to the ScholarOne divestiture and business disposals, partially offset by organic growth and foreign exchange [23] - The second quarter net loss was $72 million, an improvement over the previous year due to the absence of a non-cash impairment charge recorded last year [24] - Adjusted diluted EPS was $0.18, with changes attributed to divestitures and disposals [24] - Free cash flow was strong at $50 million for Q2 and $161 million for the first half, driven by adjusted EBITDA despite higher one-time costs associated with the value creation plan [28][29] - The mix of organic recurring revenue to total revenue for the first half improved to 88%, an increase of 800 basis points compared to last year [21] Business Line Data and Key Metrics Changes - The A and G business delivered 2% organic ACV and subscription revenue growth, with a 96% renewal rate achieved [7][11] - The IP segment returned to organic growth in patent annuities, with recurring revenue rising by about 1.5% in the first half of 2025 [15] - Life Science and Healthcare segment saw a return to organic ACV growth, supported by investments in the Cortellis suite of products [18][70] Market Data and Key Metrics Changes - The company noted a market-wide surge in AI innovation, which is expected to drive growth in the patent renewal business [15] - The U.S. dollar weakened against foreign currencies, providing a foreign exchange translation tailwind on revenue and adjusted EBITDA [26][28] Company Strategy and Development Direction - The value creation plan (VCP) is on track, with measurable progress across key initiatives and KPIs, including AI-led product innovation and operational efficiency [5][8] - The company is transitioning away from transactional sales to increase recurring revenue, with A and G subscription revenue now constituting 93% of total segment revenue [10][11] - A strategic review is underway to assess alternatives across the business, with results expected to be communicated in February 2026 [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the renewal rates and subscription uptake despite macroeconomic challenges, highlighting the mission-critical nature of their products [61] - The company anticipates continued organic growth in the second half of the year, driven by improvements in the A and G and Life Sciences segments [39] - Management noted that the strategic disposals are expected to lower revenue by approximately $125 million this year, but are part of optimizing the business model [35] Other Important Information - The company announced the appointment of Maroon Murad as President of the IP segment, effective September 8, 2025 [17] - The company has completed refinancing $500 million of its 2026 bonds, extending the maturity by five years [30] Q&A Session Summary Question: Rebound in the IP business and AI opportunities - Management noted that new patent filings take a few years to impact renewals, but the trend of increased AI-related patents is expected to benefit the business globally over the next few years [44][46] Question: Potential changes to the U.S. patent fee structure - Management stated that they are well-positioned to support any changes in the IP ecosystem due to their long-standing presence and collaboration with patent offices and law firms [51][52] Question: University funding cuts and renewal outlook - Management reported strong renewal rates and emphasized the critical nature of their products to universities, indicating confidence in continued renewals [61] Question: Sales momentum and new sales incentive plan - Management highlighted the focus on subscription and recurring revenue, noting positive sales momentum and excitement within the sales organization [66] Question: Market dynamics in Life Sciences and Healthcare - Management indicated stable R&D spending and improvements in the subscription business, attributing growth to investments in the Cortellis suite [71] Question: Delays in disposals - Management explained that one disposal is taking longer due to customer requests for more time to adjust to alternative offerings [76]

Q2 2025 Earnings Call July 30, 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 ...

Core Viewpoint - The article discusses the launch of a new global scientific literature data platform, dbdata.com, created by Chinese institutions, aimed at providing high-quality research support and reducing reliance on Western-dominated databases [2][3]. Group 1: Platform Overview - The dbdata.com platform includes nearly 90 million high-quality scientific literature metadata and incorporates AI functionalities to enhance research efficiency [2]. - The platform's basic features will be available for free to global users, facilitating literature retrieval, citation analysis, and data tracking [2]. Group 2: Issues with Existing Databases - The most widely used scientific literature database globally is Web of Science, which has over 100 million entries but suffers from issues such as manipulation of citation metrics, affecting the objectivity and accuracy of research evaluations [3]. - The existing citation evaluation system has not seen substantial improvements in 70 years, leading to the inclusion of many low-quality papers, which diminishes the academic value of the database [3]. Group 3: Dongbi Index - The platform is based on the Dongbi Index, a new evaluation standard developed by a team of young scientists, which aims to provide a more objective and accurate reflection of journal authority and impact [4]. - The Dongbi Index incorporates a quality grading system and a citation tracing method, moving beyond the traditional reliance on citation counts [4]. Group 4: Classification System - The platform has developed a classification system aligned with the habits of Chinese researchers, using the classification codes from the National Natural Science Foundation and the Ministry of Education, which are not represented in Web of Science [4]. - This classification system helps researchers understand their academic boundaries and provides precise decision-making support for management departments [4]. Group 5: AI Integration - The platform has integrated AI capabilities, including "scholar achievement interpretation" and "automatic review generation," effectively providing users with an "AI assistant" for research inquiries [5]. - Users can interact with the AI to obtain insights into scholars' research directions, characteristics, and contributions [5].

Core Viewpoint - The launch of the global technology literature data platform dbdata.com aims to provide a self-controlled, high-quality resource for scientific research, addressing the monopolization of scientific literature databases by Western companies and enhancing China's technological infrastructure [1][2]. Group 1: Platform Overview - The dbdata.com platform includes nearly 90 million high-quality scientific literature metadata and incorporates AI functionalities to assist in high-quality scientific research [1]. - The platform's basic features will be available for free to global users, offering efficient literature retrieval, citation analysis, and data tracking services [1]. Group 2: Issues with Existing Databases - The most widely used scientific literature database globally is Web of Science, which has over 100 million entries but suffers from flaws in its citation metrics, leading to potential manipulation and misallocation of research resources [2]. - The existing evaluation metrics have not seen substantial improvements in 70 years, which has hindered the academic community and reduced the reference value of many included papers [2]. Group 3: Dongbi Index and Classification - The platform is based on the Dongbi Index, a new evaluation standard developed by a team of young scientists, which aims to provide a more objective and accurate reflection of journal authority and impact [3]. - The Dongbi Index incorporates a quality grading system and is designed to align with the classification habits of Chinese researchers, offering a more relevant categorization of journals [3]. Group 4: AI Integration - The platform has integrated AI capabilities, including "scholar achievement interpretation" and "automatic review generation," effectively providing users with an AI assistant for inquiries about researchers and their contributions [4].

Core Insights - Clarivate Plc has announced a multi-year partnership with the Canadian Research Knowledge Network (CRKN) to provide expanded access to the Web of Science for 55 Canadian universities, enhancing research collaborations and accessibility [1][4]. Company Overview - Clarivate is a leading global provider of transformative intelligence, offering enriched data, insights, analytics, workflow solutions, and expert services across various sectors including Academia & Government, Intellectual Property, and Life Sciences & Healthcare [5]. Industry Impact - The partnership aims to support Canadian researchers by providing access to the Web of Science API, which includes rich metadata to aid research projects, as well as access to the Derwent Innovations Index and the Policy Citation Index to understand the societal impact of research outputs [3][4]. - Canada is recognized for its collaborative position in global academic research, with contributions in innovation and patents exceeding the international average [4].

Core Insights - Clarivate Plc has renewed its partnership with CAPES, significantly expanding access to academic and life sciences data across over 400 Brazilian institutions, increasing institutional coverage by 57% compared to the previous contract [1][2][6] - The partnership aims to democratize access to critical scientific information, enabling researchers and practitioners to conduct innovative research and improve patient care [3][4][6] - The agreement enhances access to various research tools, including Web of Science, Journal Citation Reports, and Cortellis Drug Discovery Intelligence, supporting evidence-based discovery and decision-making [2][5][6] Company and Industry Impact - The collaboration with CAPES reflects a commitment to advancing scientific excellence and reducing regional disparities in Brazil's research landscape [4][6] - The expanded access to trusted research tools is expected to strengthen postgraduate programs and elevate the global visibility of Brazilian research [6][7] - Brazil's research output shows a strong focus on Sustainable Development Goals, particularly in Life Sciences and Medicine, with a notable emphasis on international collaboration [10]

Financial Performance & Guidance - In 2020, Clarivate's Adjusted Revenue was $1.3 billion, Adjusted EBITDA was $487 million, Adjusted EBITDA Margin was 38%, and Adjusted Free Cash Flow was $264 million[16] - The company's 2021 guidance projects Adjusted Revenue between $1.8 billion and $1.84 billion, Adjusted EBITDA between $795 million and $825 million, an Adjusted EBITDA Margin between 44% and 45%, and Adjusted Free Cash Flow between $450 million and $500 million[18,68] - The company is targeting a near-term Adjusted EBITDA margin of 47%-48% and a medium-term goal of 50%[174] Growth Strategy & Market Opportunity - Clarivate addresses a total addressable market (TAM) exceeding $100 billion across four customer segments[58,109] - The company estimates a potential revenue opportunity of over $1 billion through account retention, up/cross-sell, and new logos across its customer segments[118] - The Life Sciences and Healthcare client case study shows revenue growth from $1.4 million in 2017 to $4.9 million in 2021, with 81% organic growth and a 38% CAGR[113] - The Academic and Government client case study shows revenue growth from $1.7 million in 2017 to $3.6 million in 2021, with 58% organic growth and a 23% CAGR[115] Operational Efficiency & Cost Savings - Clarivate achieved run-rate savings of $235 million exiting 2021 through operational improvements, facilities rationalization, and digital transformation[61,171] - The Connected Workplace strategy resulted in $27 million in cost savings[80] Customer Focus & Engagement - Inside Sales significantly scaled this year with 24,000 accounts in Centers of Excellence, representing $375 million via continued investment in sales capacity[75] - The company aims to improve ease of doing business, with a goal to increase the score from 77 to 80 in the Customer Delight survey[90]

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]