Cannae(US:CNNE)2025-05-12 22:02Financial Data and Key Metrics Changes - Cannae's total operating revenue for Q1 2025 was $103 million, a 7% decrease from the prior year due to lower restaurant revenue [22] - The company reported net recognized gains of $7 million in Q1 2025 compared to $5 million in the prior year, including non-cash fair value losses on Paysafe and Rapid7 [25] - Cannae's equity in earnings and losses of unconsolidated affiliates posted a $2 million net loss in Q1 2025 compared to an $18 million gain in the prior year [26] Business Line Data and Key Metrics Changes - CNB reported revenue of $580 million, representing 3.6% constant currency organic growth compared to the prior year's first quarter, with adjusted EBITDA of $211 million, exceeding consensus expectations [12] - Alight reported total revenue of $548 million for Q1 2025, a 2% decrease from the prior year, but adjusted EBITDA increased by $2 million to $118 million, also ahead of consensus estimates [13] - The Restaurant Group's operating expenses were $125 million in Q1 2025, down $27 million from the prior year, reflecting a focus on cost reduction [23] Market Data and Key Metrics Changes - Cannae's largest public investment, Dun and Bradstreet, is set to be acquired for $4.1 billion, from which Cannae expects to receive $632 million in proceeds [7] - The company anticipates utilizing approximately $730 million from public portfolio sales for shareholder returns and debt repayment [9] Company Strategy and Development Direction - Cannae aims to rebalance its portfolio away from public investments and focus on attractive companies with positive cash flows, return capital to shareholders, and improve operational performance [7] - The company has expanded its strategic relationship with JANNA Partners, acquiring an additional 30% stake to enhance capital allocation towards proprietary acquisitions [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the embedded value in Cannae's portfolio and the potential for stock price appreciation as the strategic plan is executed [49] - The company is committed to returning a significant amount of capital to shareholders through share repurchases and dividends following the DNB transaction [8] Other Important Information - Cannae appointed Bill Royan and Woody Tyler to its board, both bringing extensive experience in investment management [11] - The acquisition of Vitality Stadium is seen as a financially attractive redevelopment opportunity for the club, with expected mid-teens returns [43] Q&A Session Summary Question: Can you discuss the revenue and earnings profile of JANNA Partners and its assets under management? - Management indicated that JANNA Partners has over $2 billion in assets under management and is performing well financially [31] Question: Are there plans to increase ownership in JANNA Partners? - Currently, there are no plans to increase ownership percentage as the existing structure is deemed effective [34] Question: Can you elaborate on the Vitality Stadium acquisition? - Management believes the redevelopment of the stadium is financially compelling, with expected mid-teens returns on investment [43] Question: How does Cannae plan to deploy incremental capital for M&A? - In the short term, the focus will be on returning capital to shareholders, but there will be opportunistic investments in attractive businesses [46]