Clarivate Plc · NYSE:CLVT
Clarivate — Q3 2023 Earnings Presentation
31 slides from Clarivate's earnings presentation, Nov 7, 2023
Slide 1: Q3 2023 Earnings Call
Q3 2023 Earnings Call November 7, 2023
Slide 2: 1. Introduction
1. Introduction Mark Donohue VP Investor Relations
Slide 3: Safe Harbor Statement and Non-GAAP Financial Measures
Safe Harbor Statement and Non-GAAP Financial Measures Forward-Looking Statements This communication contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future business, events,
Slide 4: Agenda
Agenda 1. Introduction Mark Donohue Vice President Investor Relations 2. Business Review Jonathan Gear Chief Executive Officer 3. Financial Review Jonathan Collins Executive Vice President and Chief Financial Officer 4. Q&A All 4
Slide 5: 2. Business Review
2. Business Review Jonathan Gear Chief Executive Officer
Slide 6: Q3 2023 highlights
Q3 2023 highlights Revenues $647M Academia & Government 2% organic growth Organic growth 3% Alma wins at Yale and OhioLINK Adj. EBITDA¹ $281M 43.5% margin1 +80bps YoY Intellectual Property Organic growth (1%) Launched AI-powered IP forecast tool Free Cash Flow1 $102M 74% YoY YTD Life Sciences & Heal
Slide 7: A&G organic growth accelerated to 3%
A&G organic growth accelerated to 3% A&G Business Performance • Strongest revenue growth across last five quarters • Solid growth momentum across Content Aggregation transactional sales in Q3 • Library workflow software wins across major universities will continue to propel momentum in Q4 and early
Slide 8: IP pressure due to economic and budget headwinds
IP pressure due to economic and budget headwinds IP Business Performance • Economic / budget pressures and the ongoing US Actors strike continues to impact the Trademark (CompuMark) and Patent transactional search business lines • Notification of delay in USPTO new contract to 2024 will reduce Q4 re
Slide 9: LS&H improved performance with 2% organic growth
LS&H improved performance with 2% organic growth LS&H Business Performance • Improved performance in our consulting business, secured a large engagement with a global Top 20 Pharma¹ to extend our partnership in Epidemiology analytics supporting market access and clinical trials • Signed strategic ag
Slide 10: 3. Financial Review
3. Financial Review Jonathan Collins Chief Financial Officer
Slide 11: Q3 and YTD 2023 Financial Results
Q3 and YTD 2023 Financial Results Changes from Prior Year Revenues • Q3 revenues higher due to $m except per share data Q3 ‘23 Q3 ‘22 Change YTD ’23 YTD ‘22 Change organic growth and favorable FX Revenues, net $647 $636 $11 $1,945 $1,985 $(40) YoY, partially offset by divestiture of MarkMonitor Doma
Slide 12: Q3 2023 Revenues and Adj. EBITDA
Q3 2023 Revenues and Adj. EBITDA1 Changes from Prior Year Organic Growth Year + Better - Worse $ millions • Organic growth at 2% Revenues Adj. EBITDA1 • Higher profit conversion due to operating expense efficiencies $20 $647 $636 $11 Inorganic Impact • Divestiture of MarkMonitor ($19) business in Q4
Slide 13: Q3 and YTD 2023 Cash Flow
Q3 and YTD 2023 Cash Flow Changes from Prior Year Free Cash Flow • Lower one-time costs as ProQuest $m Q3 ‘23 Q3 ‘22 Change YTD ’23 YTD ‘22 Change cost synergies are complete Adj. EBITDA1 $281 $272 $9 $819 $808 11 • Lower cash taxes due to effective tax planning One-Time Costs (7) (16) 9 (54) (199)
Slide 14: Reaffirming FY 2023 Outlook
Reaffirming FY 2023 Outlook Reaffirmed Full Year Guidance Ranges Organic Growth • Expect Q4 approaching 1% largely ~0.5% due to USPTO contract delay and Organic Growth 0.0% 2.0% the impact of challenging macro on trademark volumes and commercialization budgets in Life ~$2,635m Revenues $2,600m $2,67
Slide 15: FY 2023 Revenues and Adj. EBITDA Outlook
FY 2023 Revenues and Adj. EBITDA1 Outlook Changes from Prior Year Organic Growth Year + Better - Worse $ millions • Driven by A&G segment and Revenues partially offset by decline in LS&H; Adj. EBITDA1 IP expected to be flat ~$15 $2,660 ~$25 ~$2,635 Inorganic Impact • MarkMonitor divestment in Q4 202
Slide 16: FY 2023 Cash Flow Outlook
FY 2023 Cash Flow Outlook Changes from Prior Year Free Cash Flow $m 2023 Outlook 2022 Actuals Change • One-time costs better than prior year due to materially lower Adj. EBITDA1 ~$1,115 $1,113 ~$0 acquisition integration costs One-Time Costs ~(60) (215) ~155 • Interest cost increase due to higher in
Slide 17: Financial Objectives
Financial Objectives 1 2 3 4 Accelerate organic Durable margins through Attractive cash flow Disciplined capital growth to market levels the investment cycle engine allocation Q3 KPIs... Organic Profit Margin YTD Free Cash Share 2% 80bps 74% $100M Growth Expansion Flow Growth Repurchase Below Expect
Slide 18: 4. Q&A Session
4. Q&A Session
Slide 19: About Clarivate
About Clarivate © 2023 Clarivate Clarivate is the leading global information services provider. We connect people and organizations to intelligence they can trust to transform their Clarivate and its logo, as well as all other perspective, their work and our world. Our subscription and technology-ba
Slide 20: Appendix
Appendix
Slide 21: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures This presentation contains financial measures which have not been calculated in accordance with generally accepted accounting principles in the United States of America (“US GAAP“), including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net In
Slide 22: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Adjusted EBITDA The use of Adjusted EBITDA instead of US GAAP has limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash
Slide 23: Presentation of Certain Non-GAAP Financial Measures
Presentation of Certain Non-GAAP Financial Measures Adjusted Net Income and Adjusted Diluted EPS We use Adjusted Net Income and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") in our analysis of the financial performance of the Company. We believe Adjusted Net Income and Adjusted Dilute
Slide 24: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Net Income (Loss) to Adjusted EBITDA Three Months Ended Nine Months Ended September 30, September 30, Descriptions 2023 2022 2023 2022 Adjusted EBITDA adjustments (in millions); (unaudited) Net loss attributable to ordinary 1. Includes costs incurred to
Slide 25: FY 2022 Net Loss to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures FY 2022 Net Loss to Adjusted EBITDA Year Ended December 31, Descriptions (in millions); (unaudited) 2022 Adjusted EBITDA adjustments Net loss attributable to ordinary shares $ (4,035.6) 1. Reflects the deferred revenues adjustment made as a result of pur
Slide 26: Reconciliation to Adjusted Net Income and EPS (QTD)
Reconciliation of Non-GAAP Financial Measures (QTD) Net Loss and Net Loss Per Share to Adjusted Net Income and Adjusted Diluted EPS Descriptions Three Months Ended September 30, Adjusted Net Income and Adjusted Diluted EPS adjustments 2023 2022 1. Includes costs incurred to complete business combina
Slide 27: Reconciliation to Adjusted Net Income and EPS (YTD)
Reconciliation of Non-GAAP Financial Measures (YTD) Net Loss and Net Loss Per Share to Adjusted Net Income and Adjusted Diluted EPS Descriptions Nine Months Ended September 30, 2023 2022 Adjusted Net Income and Adjusted Diluted EPS adjustments (in millions, except per share amounts); (unaudited) Amo
Slide 28: Operating Cash Flow to Free Cash Flow
Reconciliation of Non-GAAP Financial Measures Net Cash Provided By Operating Activities to Free Cash Flow Three Months Ended Nine Months Ended September 30, September 30, (in millions); (unaudited) 2023 2022 2023 2022 Net cash provided by operating activities $ 163.4 $ 207.8 $ 553.3 $ 372.4 Capital
Slide 29: FY2023 Outlook Adjusted EBITDA Reconciliation
Reconciliation of Non-GAAP Financial Measures The following table presents our calculation of Adjusted EBITDA for the FY2023 outlook and reconciles this measure to our Net income (loss) for the same period: Adjusted EBITDA Year Ending December 31, 2023 (Forecasted) (in millions) Low High Net loss at
Slide 30: FY2023 Outlook Adjusted Diluted EPS Reconciliation
Reconciliation of Non-GAAP Financial Measures The following table presents our calculation of Adjusted Diluted EPS for the FY2023 outlook and reconciles this measure to our Net income (loss) per share for the same period: Net Income (Loss) Per Fully Diluted Weighted Shares Outstanding to Adjusted Di
Slide 31: FY2023 Outlook Free Cash Flow Reconciliation
Reconciliation of Non-GAAP Financial Measures The following table presents our calculation of Free cash flow for the FY2023 outlook and reconciles this measure to our Net cash provided by operating activities for the same period: Net Cash Provided by Operating Activities to Free Cash Flow Year Endin