Clarivate Plc · NYSE:CLVT
Clarivate — Q1 2024 Earnings Presentation
31 slides from Clarivate's earnings presentation, May 8, 2024
Slide 1: Q1 2024 Earnings Call
Q1 2024 Earnings Call May 8, 2024
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 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
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: Q1 2024 highlights
Q1 2024 highlights Revenues Presented Clarivate segment updates and AI strategy, $621M 1.7% organic decline a key enabler to drive future growth 2.4% organic subscription growth Leveraging best-in-class content and technology to drive innovation in A&G Adj. EBITDA¹ $236M Delivering actionable intell
Slide 7: Leveraging content and technology to drive innovation in Academia & Government
Leveraging best-in-class content and technology to drive innovation in Academia & Government Realizing Our Growth Opportunity Alethea (Academic Coach) Drive actionable research insights across Research & Analytics more domains through new Research Intelligence solution Expand the premier content mar
Slide 8: Delivering actionable intelligence and integrated solutions in Intellectual Property
Delivering actionable intelligence and integrated solutions and services in Intellectual Property Realizing Our Growth Opportunity IP Forecast Deliver use-case-specific intelligence Patent and Trademark embedded in decision-making processes to Intelligence help customers gain competitive advantage C
Slide 9: Driving growth through scalable platforms and AI workflow solutions in Life Sciences & Healthcare
Driving growth through scalable platforms and AI driven workflow solutions in Life Sciences & Healthcare Realizing Our Growth Opportunity Cortellis Q&A Conversational Search Embed our market intelligence into Corporate workflows, translating data into recommended actions Consolidate into scalable co
Slide 10: Progressed key initiatives across IP Patent Intelligence and LS&H Real World Data
Progressed key initiatives across IP Patent Intelligence and LS&H Real World Data Intellectual Property | Patent Intelligence Life Sciences & Healthcare | Real World Data Released Streamlined Patent Search Capability Released New Real World Data Framework Launched Derwent Innovation Search Managemen
Slide 11: 3. Financial Review
3. Financial Review Jonathan Collins Chief Financial Officer
Slide 12: Q1 2024 Financial Results
Q1 2024 Financial Results Changes from Prior Year Revenues • YoY reduction from organic $m except per share data Q1 ‘24 Q1 ‘23 Change decline Revenues $621 $629 $(8) Net Income Income / (Loss) from Operations 5 55 (50) • YoY decrease due primarily to non- Fair Value Adjustment of Warrants (Gain) / L
Slide 13: Q1 2024 Revenues and Adj. EBITDA
Q1 2024 Revenues and Adj. EBITDA1 Changes from Prior Year Organic Year + Better - Worse $ millions • Margin pressure due to cost Revenues inflation Adj. EBITDA1 Inorganic Impact $629 $1 $1 $621 • Nominal revenue contribution from MotionHall acquisition ($10) Cost Synergies • M&A integration cost syn
Slide 14: Q1 2024 Cash Flow
Q1 2024 Cash Flow Changes from Prior Year Free Cash Flow1 $m Q1 ‘24 Q1 ‘23 Change • YoY decline due to working capital timing Adj. EBITDA1 $236 $253 $(17) One-Time Costs (19) (33) 14 Capital Allocation • Refinanced existing term loan in Interest (37) (41) 4 January 2024 with maturity Taxes (8) (3) (
Slide 15: Reaffirmed FY 2024 Outlook
Reaffirmed FY 2024 Outlook Organic Growth ~1.0% Organic Growth 0.0% 2.0% • Expect organic growth to improve modestly in all three segments • Anticipate a sequential improvement to a decline of ~1% in Q2 ~$2,620m Revenues $2,570m $2,670m Revenues • Expect organic growth to be offset by divestiture an
Slide 16: FY 2024 Revenues and Adj. EBITDA Outlook
FY 2024 Revenues and Adj. EBITDA1 Outlook Changes from Prior Year Organic Growth Year + Better - Worse $ millions • Driven by stable subscription Revenues growth of ~2%, partially offset by Adj. EBITDA1 transactional headwinds ~$30 $2,629 ~$2,620 Inorganic Impact ~($30) ~($10) • Valipat divestiture
Slide 17: FY 2024 Cash Flow Outlook
FY 2024 Cash Flow Outlook Changes from Prior Year Free Cash Flow1 $m 2024 Outlook 2023 Actuals Change • One-time costs expected to be lower as acquisition integration Adj. EBITDA1 ~$1,085 $1,117 ~$(30) complete One-Time Costs ~(40) (61) ~20 • Interest cost expected to be lower due to deleveraging an
Slide 18: 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 Capital Free Cash Flow1 ~10% >40% Profit Margin1 >40% <4x Leverage Spending Conversion 1 See the Appendix for a reconciliati
Slide 19: 4. Q&A Session
4. Q&A Session
Slide 20: About Clarivate
About Clarivate © 2024 Clarivate Clarivate is a leading global provider of transformative intelligence. We offer enriched data, insights & analytics, workflow solutions and expert services in Clarivate and its logo, as well as all other the areas of Academia & Government, Intellectual Property and L
Slide 21: Appendix
Appendix Presentation of Certain Non-GAAP Financial Measures
Slide 22: 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 23: 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 24: 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 25: Reconciliation of Net income (loss) to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Net income (loss) to Adjusted EBITDA and Adjusted EBITDA margin Three Months Ended March 31, Descriptions 1. Primarily reflects the net impact of foreign exchange gains and losses related to the (In millions) 2024 2023 remeasurement of balances and other
Slide 26: Reconciliation of Net income (loss) to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Net income (loss) to Adjusted EBITDA and Adjusted EBITDA margin Year Ended December 31, Descriptions (In millions) 2023 1. Includes costs incurred to complete business combination transactions, including acquisitions, dispositions and capital market acti
Slide 27: Reconciliation of Net income and EPS to Adjusted net income and EPS
Reconciliation of Non-GAAP Financial Measures Net income (loss) and Net income (loss) per share to Adjusted net income and Adjusted diluted EPS Three Months Ended March 31, Descriptions 2024 2023 1. Primarily reflects the net impact of foreign exchange gains and losses related to the remeasurement o
Slide 28: Reconciliation of 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 March 31, (In millions) 2024 2023 Net cash provided by operating activities $ 176.2 $ 227.5 Capital expenditures (64.4) (59.3) Free cash flow $ 111.8 $ 168.2 Year Ended Decemb
Slide 29: Reconciliation of Non-GAAP Financial Measures – 2024 Outlook
Reconciliation of Non-GAAP Financial Measures – 2024 Outlook The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the FY2024 outlook and reconciles these non-GAAP measures to our Net income (loss) for the same period: Net income (loss) to Adjusted EBITDA and
Slide 30: Reconciliation of Non-GAAP Financial Measures – 2024 Outlook
Reconciliation of Non-GAAP Financial Measures – 2024 Outlook The following table presents our calculation of Adjusted diluted EPS for the FY2024 outlook and reconciles this non-GAAP measure to our per share Net income (loss) for the same period: Net income (loss) per fully diluted weighted shares ou
Slide 31: Reconciliation of Non-GAAP Financial Measures – 2024 Outlook
Reconciliation of Non-GAAP Financial Measures – 2024 Outlook The following table presents our calculation of Free cash flow for the FY2024 outlook and reconciles this non-GAAP measure to our Net cash provided by operating activities for the same period: Net cash provided by operating activities to F