Clarivate Reports Third Quarter 2024 Results
07.08.2025 - 18:07:07 | prnewswire.co.ukUse of Non-GAAP Financial Measures
Non-GAAP results are financial measures that are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and are presented only as a supplement to our financial statements based on GAAP. Non-GAAP financial information is provided to enhance the reader's understanding of our financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP. They are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. As a result, you should not consider such measures in isolation from, or as a substitute for, financial measures or results of operations calculated or determined in accordance with GAAP.
We use non-GAAP measures in our operational and financial decision-making. We believe that such measures allow us to focus on what we deem to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations, and we also believe that investors may find these non-GAAP financial measures useful for the same reasons. Non-GAAP measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to us, many of which present non-GAAP measures when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of GAAP financial disclosures. However, non-GAAP measures have limitations as analytical tools and because not all companies use identical calculations, our presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.
Definitions and reconciliations of non-GAAP measures, such as Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted diluted EPS, and Free cash flow to the most directly comparable GAAP measures are provided within the schedules attached to this release. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by any of the adjusted items, or that any projections and estimates will be realized in their entirety or at all.
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 generally be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "anticipates," "expects," "seeks," "projects," "intends," "plans," "may," "will," or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts, and include statements regarding our intentions, beliefs, or current expectations concerning, among other things, anticipated cost savings, results of operations, financial condition, liquidity, prospects, growth, strategies, and the markets in which we operate. Such forward-looking statements are based on available current market material and management's expectations, beliefs, and forecasts concerning future events impacting us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in Item 1A. Risk Factors of our annual report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Please consult our public filings with the SEC or on our website at www.clarivate.com.
About Clarivate
Clarivate™ is a leading global provider of transformative intelligence. We offer enriched data, insights & analytics, workflow solutions and expert services in the areas of Academia & Government, Intellectual Property and Life Sciences & Healthcare. For more information, please visit www.clarivate.com.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)
September 30,
2024
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents, including restricted cash
$ 388.5
$ 370.7
Accounts receivable, net
771.8
908.3
Prepaid expenses
97.7
88.5
Other current assets
81.1
68.0
Assets held for sale
—
26.7
Total current assets
1,339.1
1,462.2
Property and equipment, net
47.3
51.6
Other intangible assets, net
8,726.7
9,006.6
Goodwill
1,736.8
2,023.7
Other non-current assets
71.8
60.8
Deferred income taxes
50.8
46.7
Operating lease right-of-use assets
58.1
55.2
Total assets
$ 12,030.6
$ 12,706.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 126.5
$ 144.1
Accrued compensation
111.7
126.5
Accrued expenses and other current liabilities
375.1
315.2
Current portion of deferred revenues
890.2
983.1
Current portion of operating lease liability
22.1
24.4
Liabilities held for sale
—
6.7
Total current liabilities
1,525.6
1,600.0
Long-term debt
4,632.5
4,721.1
Non-current portion of deferred revenues
21.6
38.7
Other non-current liabilities
52.5
41.9
Deferred income taxes
227.0
249.6
Operating lease liabilities
57.9
63.2
Total liabilities
6,517.1
6,714.5
Commitments and contingencies
Shareholders' equity:
Preferred Shares, no par value; 14.4 shares authorized; 5.25% Mandatory Convertible Preferred Shares, Series A, zero and 14.4 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
—
1,392.6
Ordinary Shares, no par value; unlimited shares authorized; 710.3 and 666.1 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
13,069.0
11,740.5
Accumulated other comprehensive loss
(433.8)
(495.3)
Accumulated deficit
(7,121.7)
(6,645.5)
Total shareholders' equity
5,513.5
5,992.3
Total liabilities and shareholders' equity
$ 12,030.6
$ 12,706.8
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
(In millions, except per share data)
2024
2023
2024
2023
Revenues
$ 622.2
$ 647.2
$ 1,893.7
$ 1,945.1
Operating expenses:
Cost of revenues
210.1
220.6
641.5
674.8
Selling, general and administrative costs
169.7
171.9
546.8
559.3
Depreciation and amortization
177.2
176.8
541.0
527.5
Goodwill and intangible asset impairments
13.8
—
316.6
135.2
Restructuring and other impairments
4.0
3.7
14.2
25.3
Other operating expense (income), net
25.7
(13.0)
46.9
(30.5)
Total operating expenses
600.5
560.0
2,107.0
1,891.6
Income (loss) from operations
21.7
87.2
(213.3)
53.5
Fair value adjustment of warrants
—
(12.6)
(5.2)
(14.4)
Interest expense, net
72.2
71.9
213.5
218.5
Income (loss) before income taxes
(50.5)
27.9
(421.6)
(150.6)
Provision (benefit) for income taxes
15.1
15.6
23.3
(83.3)
Net income (loss)
(65.6)
12.3
(444.9)
(67.3)
Dividends on preferred shares
—
18.9
31.3
56.3
Net income (loss) attributable to ordinary shares
$ (65.6)
$ (6.6)
$ (476.2)
$ (123.6)
Per share:
Basic
$ (0.09)
$ (0.01)
$ (0.69)
$ (0.18)
Diluted
$ (0.09)
$ (0.01)
$ (0.69)
$ (0.18)
Weighted average shares used to compute earnings per share:
Basic
718.7
670.9
690.5
673.9
Diluted
718.7
670.9
690.5
673.9
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30,
(In millions)
2024
2023
Cash Flows From Operating Activities
Net income (loss)
$ (444.9)
$ (67.3)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
541.0
527.5
Share-based compensation
48.9
97.1
Restructuring and other impairments, including goodwill
314.5
138.9
Gain on legal settlement
—
(49.4)
Deferred income taxes
(28.8)
(51.3)
Amortization of debt issuance costs
11.1
12.9
Other operating activities
36.1
2.4
Changes in operating assets and liabilities:
Accounts receivable
148.2
110.3
Prepaid expenses
(8.5)
(10.6)
Other assets
(9.8)
19.5
Accounts payable
(16.5)
(2.4)
Accrued expenses and other current liabilities
22.1
(33.8)
Deferred revenues
(102.3)
(56.9)
Operating leases, net
(7.8)
(6.2)
Other liabilities
2.0
(77.4)
Net cash provided by operating activities
505.3
553.3
Cash Flows From Investing Activities
Capital expenditures
(206.9)
(178.6)
Payments for acquisitions, net of cash acquired
(32.0)
(2.3)
Proceeds from divestitures, net of cash divested
(19.2)
10.5
Net cash provided by (used for) investing activities
(258.1)
(170.4)
Cash Flows From Financing Activities
Principal payments on term loans
(58.1)
(150.0)
Payment of debt issuance costs and discounts
(20.1)
0.1
Repurchases of ordinary shares
(100.0)
(100.0)
Cash dividends on preferred shares
(37.7)
(56.7)
Payments related to finance lease
(0.7)
(0.8)
Payments related to tax withholding for share-based compensation
(13.9)
(14.8)
Net cash provided by (used for) financing activities
(230.5)
(322.2)
Effects of exchange rates
1.1
(10.3)
Net change in cash and cash equivalents, including restricted cash
17.8
50.4
Cash and cash equivalents, including restricted cash, beginning of period
370.7
356.8
Cash and cash equivalents, including restricted cash, end of period
$ 388.5
$ 407.2
Supplemental Revenues Information
Annualized contract value ("ACV") represents the annualized value for the next 12 months of subscription-based client license agreements, assuming that all expiring license agreements during that period are renewed at their current price level. Our ACV was $1,596.4 and $1,579.2 as of September 30, 2024 and 2023, respectively, which corresponds to an increase of 1.1%. The increase in ACV was primarily due to the impact of price increases, partially offset by volume declines.
The following tables present our revenues by type and by segment for the periods indicated, as well as the drivers of the variances between periods, including as a percentage of such revenues.
Three Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Subscription revenues
$ 411.1
$ 408.1
$ 3.0
0.7 %
0.2 %
— %
(0.1) %
0.6 %
Re-occurring revenues
106.7
106.8
(0.1)
(0.1) %
— %
— %
1.0 %
(1.1) %
Transactional and other revenues
104.4
132.3
(27.9)
(21.1) %
0.5 %
(8.1) %
0.1 %
(13.6) %
Revenues
$ 622.2
$ 647.2
$ (25.0)
(3.9) %
0.2 %
(1.6) %
0.1 %
(2.6) %
Nine Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Subscription revenues
$ 1,219.8
$ 1,207.3
$ 12.5
1.0 %
0.1 %
— %
(0.3) %
1.2 %
Re-occurring revenues
317.8
325.5
(7.7)
(2.4) %
— %
— %
(0.1) %
(2.3) %
Transactional and other revenues
356.1
412.3
(56.2)
(13.6) %
0.2 %
(4.5) %
— %
(9.3) %
Revenues
$ 1,893.7
$ 1,945.1
$ (51.4)
(2.6) %
0.1 %
(1.0) %
(0.2) %
(1.5) %
Three Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Academia & Government
$ 321.3
$ 327.2
$ (5.9)
(1.8) %
— %
— %
(0.1) %
(1.7) %
Intellectual Property
199.8
211.7
(11.9)
(5.6) %
0.1 %
(4.6) %
0.7 %
(1.8) %
Life Sciences & Healthcare
101.1
108.3
(7.2)
(6.6) %
0.9 %
(0.7) %
(0.3) %
(6.5) %
Revenues
$ 622.2
$ 647.2
$ (25.0)
(3.9) %
0.2 %
(1.6) %
0.1 %
(2.6) %
Nine Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Academia & Government
$ 983.5
$ 983.9
$ (0.4)
— %
— %
— %
(0.1) %
0.1 %
Intellectual Property
602.3
637.1
(34.8)
(5.5) %
— %
(2.6) %
(0.2) %
(2.7) %
Life Sciences & Healthcare
307.9
324.1
(16.2)
(5.0) %
0.5 %
(0.6) %
(0.5) %
(4.4) %
Revenues
$ 1,893.7
$ 1,945.1
$ (51.4)
(2.6) %
0.1 %
(1.0) %
(0.2) %
(1.5) %
Reconciliations to Certain Non-GAAP Measures
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents Net income (loss) before the Provision (benefit) for income taxes, Depreciation and amortization, and Interest expense, net, adjusted to exclude acquisition and/or disposal-related transaction costs, share-based compensation, restructuring expenses, impairments, the impact of certain non-cash fair value adjustments on financial instruments, unrealized foreign currency gains/losses, legal settlements, and other items that are included in Net income (loss) for the period that we do not consider indicative of our ongoing operating performance. Net income (loss) margin is calculated by dividing Net income (loss) by Revenues. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues.
The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the three and nine months ended September 30, 2024 and 2023 and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss) margin for the same periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions, except percentages); (unaudited)
2024
2023
2024
2023
Net income (loss)
$ (65.6)
$ 12.3
$ (444.9)
$ (67.3)
Provision (benefit) for income taxes
15.1
15.6
23.3
(83.3)
Depreciation and amortization
177.2
176.8
541.0
527.5
Interest expense, net
72.2
71.9
213.5
218.5
Transaction related costs
6.1
2.7
13.6
5.1
Share-based compensation expense
15.4
25.4
49.7
97.1
Goodwill and intangible asset impairments
13.8
—
316.6
135.2
Restructuring and other impairments
4.0
3.7
14.2
25.3
Fair value adjustment of warrants
—
(12.6)
(5.2)
(14.4)
Other(1)
26.2
(14.4)
53.3
(24.7)
Adjusted EBITDA
$ 264.4
$ 281.4
$ 775.1
$ 819.0
Net income (loss) margin
(10.5) %
1.9 %
(23.5) %
(3.5) %
Adjusted EBITDA margin
42.5 %
43.5 %
40.9 %
42.1 %
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance. For the nine months ended September 30, 2024, the amount includes a $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.
Adjusted net income and Adjusted diluted EPS
Adjusted net income represents Net income (loss), adjusted to exclude acquisition and/or disposal-related transaction costs, amortization related to acquired intangible assets, share-based compensation, restructuring expenses, impairments, the impact of certain non-cash fair value adjustments on financial instruments, unrealized foreign currency gains/losses, legal settlements, and other items that are included in net income (loss) for the period that we do not consider indicative of our ongoing operating performance and the associated income tax impact of such adjustments.
Adjusted diluted EPS is calculated by dividing Adjusted net income by Adjusted diluted weighted average shares. The Adjusted diluted weighted average shares calculation assumes that all instruments in the calculation are dilutive.
The following tables present our calculation of Adjusted net income and Adjusted diluted EPS for the three and nine months ended September 30, 2024 and 2023 and reconciles these non-GAAP measures to our Net income (loss) and diluted EPS for the same periods:
Three Months Ended September 30,
2024
2023
(In millions, except per share amounts); (unaudited)
Amount
Per Share
Amount
Per Share
Net income (loss) and EPS
$ (65.6)
$ (0.09)
$ 12.3
$ 0.02
Transaction related costs
6.1
0.01
2.7
—
Share-based compensation expense
15.4
0.02
25.4
0.04
Amortization related to acquired intangible assets
138.7
0.19
141.9
0.21
Goodwill and intangible asset impairments
13.8
0.02
—
—
Restructuring and other impairments
4.0
0.01
3.7
0.01
Fair value adjustment of warrants
—
—
(12.6)
(0.02)
Other(1)
26.2
0.04
(14.4)
(0.04)
Income tax impact of related adjustments
(4.5)
(0.01)
(6.4)
(0.01)
Adjusted net income and Adjusted diluted EPS
$ 134.1
$ 0.19
$ 152.6
$ 0.21
Adjusted weighted average ordinary shares, diluted
723.5
731.4
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance.
Nine Months Ended September 30,
2024
2023
(In millions, except per share amounts); (unaudited)
Amount
Per Share
Amount
Per Share
Net income (loss) and EPS
$ (444.9)
$ (0.64)
$ (67.3)
$ (0.10)
Transaction related costs
13.6
0.02
5.1
0.01
Share-based compensation expense
49.7
0.07
97.1
0.14
Amortization related to acquired intangible assets
416.9
0.60
429.8
0.64
Goodwill and intangible asset impairments
316.6
0.46
135.2
0.20
Restructuring and other impairments
14.2
0.02
25.3
0.04
Fair value adjustment of warrants
(5.2)
(0.01)
(14.4)
(0.02)
Other(1)
53.3
0.05
(24.7)
(0.10)
Income tax impact of related adjustments
(34.4)
(0.05)
(150.4)
(0.22)
Adjusted net income and Adjusted diluted EPS
$ 379.8
$ 0.52
$ 435.7
$ 0.59
Adjusted weighted average ordinary shares, diluted
726.1
733.6
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance. For the nine months ended September 30, 2024, the amount includes a $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.
Free cash flow
Free cash flow represents Net cash provided by (used for) operating activities less Capital expenditures. The following table reconciles this non-GAAP measure to Net cash provided by operating activities:
Three Months Ended September 30,
Nine Months Ended September 30,
(In millions); (unaudited)
2024
2023
2024
2023
Net cash provided by operating activities
$ 202.9
$ 163.4
$ 505.3
$ 553.3
Capital expenditures
(76.6)
(61.7)
(206.9)
(178.6)
Free cash flow
$ 126.3
$ 101.7
$ 298.4
$ 374.7
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