Slide 1: Q3 2019 Earnings Supplemental Materials
Q3 2019 Earnings Supplemental Materials November 5, 2019 1
Slide 2: Forward-Looking Statements
2 Forward - Looking Statements The accompanying materials contain certain forward - looking statements regarding Clarivate Analytics Plc (the “Company” or “Clarivate”), its financial condition and its results of operations, anticipated synergies and other future expectations . Forward - looking stat
Slide 3: Q3 2019 Financial highlights
Q3 2019 Financial highlights 3 • Revenues up 0.4% on constant currency basis • Adjusted Revenues up 3.6% on a constant currency basis • Net income of $10.8 million compares to net loss of $54.7 million • Diluted EPS of $0.03 compares to net loss per share of ($0.25) • Net cash from operating activit
Slide 4: Other achievements
Other achievements 4 • Announced buyout of tax receivable agreement (TRA) for $200 million – Eliminates near - term cash outflows of up $30.0 million annually that the Company was expecting to pay starting in 2021 • Completed secondary offering of 39.7 million ordinary shares (1) owned by Onex Corpo
Slide 5: Reorganization and operational efficiency project
Reorganization and operational efficiency project 5 • As previously discussed, we identified many areas with potential to improve efficiency and profitability further positioning the Company for long - term success • First, we simplified our operating structure; moving from five siloed business unit
Slide 6: Q3 2019 Financial results
6 Q3 2019 Financial results
Slide 7: Q3 Results
$77.0 $66.3 Q3'19 Q3'18 $243.0 $242.9 Q3'19 Q3'18 Q3 Results 7 1. Adjusted Revenue excludes the divested IPM business revenues for all years, and adds back $0.1 million of deferred revenue pu rch ase accounting adjustment for Q3’19 and $0.5 million for Q3’18 excluding the Intellectual Property Manag
Slide 8: Q3 Revenue
Q3 Revenue ($ in millions) Q3 2019 Q3 2018 % Change [actual f/x] % Change [constant f/x] Revenues, net $243.0 $242.9 0.0% 0.4% Deferred revenue adjustment 0 . 1 0 . 5 (80.0)% - Revenue attributable to IPM product line - (7.8) 100.0% - Adjusted Revenues (1) $243.1 $235.6 3.2% 3.6% Subscription revenu
Slide 9: Q3 Financial summary
Q3 Financial summary ($ and shares in millions, except per share information) Q3 2019 Q3 2018 % Change [actual f/x] % Change [constant f/x] Revenue $243.0 $242.9 0.0% 0.4% Adjusted Revenue (1) $ 2 43 . 1 $235 . 6 3.2% 3.6% Adjusted EBITDA (2) $77 . 0 $ 6 6 . 3 16.1% Adjusted EBITDA margin % (3) 31.7
Slide 10: Nine months year-to-date 2019 financial results
10 Nine months year - to - date 2019 financial results
Slide 11: Q3 YTD Results
$719.3 $723.2 Q3 YTD'19 Q3 YTD'18 Q3 YTD Results 11 1. Adjusted Revenue excludes the divested IPM business revenues for all years, and adds back $0.4 million of deferred revenue pu rch ase accounting adjustment for Q3 YTD’19 and $2.9 million for Q3 YTD’18 excluding IPM. Deferred revenue adjustment I
Slide 12: Q3 YTD Revenue
Q3 YTD Revenue ($ in millions) Q3 YTD 2019 Q3 YTD 2018 % Change [actual f/x] % Change [constant f/x] Revenues, net $719.3 $723.2 (0.5)% 0.2% Deferred revenue adjustment 0 . 4 2 . 9 (86.2)% - Revenue attributable to IPM product line - (20.3) 100.0% - Adjusted Revenue (1) $719.7 $705.8 2.0% 2.8% Subsc
Slide 13: Q3 YTD Financial summary
Q3 YTD Financial summary ($ in millions, except per share information) Q3 YTD 2019 Q3 YTD 2018 % Change [actual f/x] % Change [constant f/x] Revenue $719.3 $723.2 (0.5%) 0.2% Adjusted Revenue (1) $719 . 7 $705 . 8 2.0% 2.8% Adjusted EBITDA (2) $209 . 6 $197 . 1 6.3% Adjusted EBITDA margin % (3) 29.1
Slide 14: Selected balance sheet items
Selected balance sheet items 14 ($ in millions) September 30, 2019 December 31, 2018 Cash & cash equivalents $88.8 $25.6 Total debt outstanding $1,342 . 5 $2,029.0 Tax receivable agreement (1) $264.6 $ - Net debt $1,253.7 $2,003.4 Gross leverage ratio 4.1x 6.6x Net leverage ratio 3 . 9x 6 . 4x 1. Ta
Slide 15: Debt Refinancing/Pro Forma Capitalization
Debt Refinancing/Pro Forma Capitalization 15 1. Inclusive of call premium, with respect to the senior notes, and accrued interest. 2. Does not include netting of deferred financing charges, existing Term Loan Facility discount. Includes current portion of lon g - t erm debt. 3. Total Shareholders’ E
Slide 16: Historical annualized contract value (ACV)
$731 $755 $759 $767 $764 $783 $789 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Historical annualized contract value (ACV) (1) 1. Annual Contract Value (“ACV”) is the annualized value for a 12 - month period following a given date of all subscription - based cli ent license agreements, assuming
Slide 17: 2019 Outlook
2019 Outlook ($ in millions) Low Mid High Adjusted Revenue (1) $ 962 $ 979 $995 % Change YoY growth 1.2% 2.9% 4.6% Adjusted EBITDA $290 $300 $310 % Change YoY growth 6.3% 9.8% 13.6% Adjusted EBITDA margin % 30.1% 30.6% 31.2% 1. Adjusted Revenue adds back $0.3 million in deferred revenues purchased a
Slide 18: Appendix
18 Appendix
Slide 19: Presentation of certain Non-GAAP financial measures
Presentation of certain Non - GAAP financial measures This presentation contains financial measures which have not been calculated in accordance with GAAP, including Adjusted Revenues and Adjusted EBITDA, because they are a basis upon which our management assesses our performance and we believe they
Slide 20: Presentation of certain Non-GAAP financial measures
Presentation of certain Non - GAAP financial measures The use of Adjusted EBITDA instead of GAAP measures has limitations as an analytical tool, and you should not consider Adjusted EBITDA in isolation, or as a substitute for analysis of the Company’s results of operations and operating cash flows a
Slide 21: Presentation of certain Non-GAAP financial measures
Presentation of certain Non - GAAP financial measures Adjusted Net Income and Adjusted Diluted EPS We have begun to use Adjusted Net Income and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") in our analysis of the financial performance of the Company . We believe Adjusted Net Income an
Slide 22: Presentation of certain Non-GAAP financial measures
Presentation of certain Non - GAAP financial measures Free Cash Flow We use free cash flow in our operational and financial decision - making and believe free cash flow is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies and other i
Slide 23: Reconciliation of Non-GAAP financial measures and required reported data
Reconciliation of Non - GAAP financial measures and required reported data Reconciliation ($ in millions) September 30 QTD 2019 QTD 2018 LTM 2019 Revenue, Net $ 243.0 $ 242.9 $ 964.9 (+) Deferred revenue adjustment 0.1 0.5 0.6 ( - ) IPM Divested revenue - (7.8) - Adjusted revenue $ 243.1 $ 235.6 $ 9
Slide 24: Reconciliation of Non-GAAP financial measures and required reported data
Reconciliation of Non - GAAP financial measures and required reported data Reconciliation ($ in millions) September 30 YTD 2019 YTD 2018 LTM 2019 Revenue, Net $ 719.3 $ 723.2 $ 964.9 (+) Deferred revenue adjustment 0.4 2.9 0.6 ( - ) IPM Divested revenue - (20.3) - Adjusted revenue $ 719.7 $ 705.8 $
Slide 25: Reconciliation of Non-GAAP financial measures and required reported data
Reconciliation of Non - GAAP financial measures and required reported data Reconciliation ($ in millions, except per share amounts) September 30 QTD 2019 QTD 2018 Amount Per Share Amount Per Share Revenue, Net $ 243.0 $ 242.9 (+) Deferred revenue adjustment 0.1 0.5 ( - ) IPM Divested revenue - (7.8)
Slide 26: Reconciliation ($ in millions, except per share amounts)
Reconciliation ($ in millions, except per share amounts) September 30 YTD 2019 YTD 2018 Amount Per Share Amount Per Share Revenue, Net $ 719.3 $ 723.2 (+) Deferred revenue adjustment 0.4 2.9 ( - ) IPM Divested revenue - (20.3) Adjusted revenue $ 719.7 $ 705.8 Net loss $ (126.2) $(0.46) $ (198.7) (0.
Slide 27: Quarterly financial summary
Quarterly financial summary 27 1. Adjusted Revenue excludes the divested IPM business revenues for the period, and adds back the deferred revenue purchase acco unt ing adjustment. 2. See the appendix for a reconciliation of Net Income (loss) to Adjusted EBITDA. ($ in millions) Q1 2018 Q2 2018 Q3 201
Slide 28: Enterprise Value Build
Enterprise Value Build Stock Price at 9/30/2019 @$18 @$19 @$20 Comments Share Price Ticker Current Share (Live) $16.87 $18.00 $19.00 $20.00 Enterprise Value Build Basic Shares Oustanding 306,050,763 306,050,763 306,050,763 306,050,763 (+) Stock Options Dilution 24,593,110 27,622,564 30,098,752 32,34
Slide 29: Thank you
© Clarivate Analytics Thank you