— Reaffirms 2024 Outlook —
LONDON, Aug. 6, 2024
/PRNewswire/ -- Clarivate Plc (NYSE: CLVT) (the "Company" or
"Clarivate"), a leading global provider of transformative
intelligence, today reported results for the second quarter ended
June 30, 2024.
Second Quarter 2024 Financial Highlights
- Revenues of $650.3 million
decreased 2.8%
- Organic revenues decreased 0.6%, as an increase in subscription
revenues of 0.7% was offset by a decrease in re-occurring revenues
of 0.7% and transactional and other revenues of 4.1%
- Net loss of $304.3 million; Net
loss per diluted share of $0.46
- Adjusted net income(1) of $142.2 million decreased 6.6%; Adjusted diluted
EPS(1) of $0.20 decreased
4.8% or $0.01
- Adjusted EBITDA(1) of $274.4
million decreased 3.7%; Adjusted EBITDA margin(1)
of 42.2% decreased 40 basis points primarily due to lower
revenues
- Net cash provided by operating activities of $126.2 million decreased $36.2 million; Free cash flow(1) of
$60.3 million decreased $44.5 million primarily due to the timing of
working capital
Six Months Ended June 30, 2024
Financial Highlights
- Revenues of $1,271.5 million
decreased 2.0%
- Organic revenues decreased 1.1% as an increase in subscription
revenues of 1.5% was offset by a decline in re-occurring revenues
of 2.9% and transactional and other revenues of 7.3%
- Net loss of $379.3 million; Net
loss per diluted share of $0.61
- Adjusted net income(1) of $245.7 million decreased 13.2%; Adjusted diluted
EPS(1) of $0.34 decreased
12.8% or $0.05
- Adjusted EBITDA(1) of $510.7
million decreased 5.0%; Adjusted EBITDA margin(1)
of 40.2% decreased 120 basis points primarily due to lower
revenues
- Net cash provided by operating activities decreased
$87.5 million to $302.4 million; Free cash flow(1)
decreased $100.9 million to
$172.1 million primarily due to lower
operating income and increased capital expenditures
"We continue to invest in innovation and make progress on our
strategy of returning to growth. During the last quarter, we
launched several new, next-generation product offerings across all
three segments such as the Research Horizon Navigator™, Trademark
Watch Analyzer, and Epidemiology Intelligence," said Jonathan Gear, Chief Executive Officer. "We are
seeing our customers respond positively to our operational and
product improvements, and as a result improved renewal rates and
new customer wins, which will drive a return to organic growth in
the second half of this year."
Selected Financial Information
|
Three Months
Ended
June 30,
|
|
Change
|
|
Six Months Ended
June 30,
|
|
Change
|
|
(in millions, except
percentages and per share data), (unaudited)
|
2024
|
|
2023
|
|
$
|
|
%
|
|
2024
|
|
2023
|
|
$
|
|
%
|
|
Revenues
|
$
650.3
|
|
$
668.8
|
|
$ (18.5)
|
|
(2.8) %
|
|
$
1,271.5
|
|
$
1,297.9
|
|
$ (26.4)
|
|
(2.0) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(304.3)
|
|
$
(123.1)
|
|
$
(181.2)
|
|
N/M
|
|
$
(379.3)
|
|
$
(79.6)
|
|
$
(299.7)
|
|
N/M
|
|
Diluted EPS
|
$
(0.46)
|
|
$
(0.21)
|
|
$ (0.25)
|
|
N/M
|
|
$
(0.61)
|
|
$
(0.17)
|
|
$ (0.44)
|
|
N/M
|
|
Weighted average
ordinary shares, diluted
|
685.6
|
|
675.9
|
|
9.7
|
|
1.4 %
|
|
676.2
|
|
675.4
|
|
0.8
|
|
0.1 %
|
|
Adjusted
EBITDA(1)
|
$ 274.4
|
|
$
284.9
|
|
$ (10.5)
|
|
(3.7) %
|
|
$ 510.7
|
|
$ 537.6
|
|
$ (26.9)
|
|
(5.0) %
|
|
Adjusted net
income(1)
|
$ 142.2
|
|
$
152.2
|
|
$ (10.0)
|
|
(6.6) %
|
|
$ 245.7
|
|
$ 283.1
|
|
$ (37.4)
|
|
(13.2) %
|
|
Adjusted diluted
EPS(1)(2)
|
$
0.20
|
|
$
0.21
|
|
$ (0.01)
|
|
(4.8) %
|
|
$ 0.34
|
|
$ 0.39
|
|
$ (0.05)
|
|
(12.8) %
|
|
Adjusted weighted
average ordinary shares, diluted(1)
|
726.8
|
|
734.9
|
|
(8.1)
|
|
(1.1) %
|
|
727.2
|
|
734.8
|
|
(7.6)
|
|
(1.0) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$ 126.2
|
|
$
162.4
|
|
$ (36.2)
|
|
(22.3) %
|
|
$ 302.4
|
|
$ 389.9
|
|
$ (87.5)
|
|
(22.4) %
|
|
Free cash
flow(1)
|
$
60.3
|
|
$
104.8
|
|
$ (44.5)
|
|
(42.5) %
|
|
$ 172.1
|
|
$ 273.0
|
|
$
(100.9)
|
|
(37.0) %
|
Second Quarter 2024 Commentary
Revenues for the second quarter decreased $18.5 million, or 2.8%, to $650.3 million, primarily due to the divestiture
of Valipat in April 2024 and the
negative impact of foreign exchange as a result of the
strengthening of the U.S. dollar. Organic revenues decreased
$3.9 million or 0.6%.
Subscription revenues for the second quarter decreased
$0.4 million, or 0.1%, to
$405.6 million. Organic subscription
revenues increased 0.7%, driven by price increases.
Re-occurring revenues for the second quarter decreased
$2.4 million, or 2.2%, to
$108.6 million. Organic re-occurring
revenues decreased 0.7%, primarily due to lower IP patent renewal
volumes.
Transactional and other revenues for the second quarter
decreased $15.7 million, or 10.3%, to
$136.1 million. Organic transactional
and other revenues decreased 4.1%, due to lower sales across all
three segments.
Balance Sheet and Cash Flow
As of June 30, 2024, cash and cash
equivalents of $376.4 million
increased $5.7 million compared to
December 31, 2023.
The Company's total debt outstanding as of June 30, 2024 was $4,717.2
million, a decrease of $53.1
million compared to December 31,
2023, driven by an accelerated debt repayment.
Net cash provided by operating activities of $302.4 million for the six months ended
June 30, 2024 decreased $87.5 million compared to the prior year period,
primarily due to timing differences in working capital. Free cash
flow(1) for the six months ended June 30, 2024 was $172.1
million, a decrease of $100.9
million compared to the prior year period.
Reaffirmed Outlook for 2024 (forward-looking
statement)
"Our second quarter results were in line with the expectations
we outlined on our prior earnings call. We continue to expect our
full year 2024 financial results to be in the range of our existing
outlook," said Jonathan Collins,
Executive Vice President and Chief Financial Officer. "With our
strong cash flow, we plan to take a more balanced approach to
capital allocation during the second half of 2024."
The full year outlook presented below assumes no further
acquisitions, divestitures, or unanticipated events.
|
2024
Outlook
|
|
Revenues
|
$2.57B to
$2.67B
|
|
Organic Revenue
Growth
|
0% to 2%
|
|
Adjusted
EBITDA(1)
|
$1.055B to
$1.115B
|
|
Adjusted EBITDA
Margin(1)
|
41% to 42%
|
|
Adjusted Diluted
EPS(1)(2)
|
$0.70 to
$0.80
|
|
Free Cash
Flow(1)
|
$420M to
$500M
|
|
|
Notes to earnings press
release
|
|
(1) Non-GAAP
measure. Please see "Reconciliations to Certain Non-GAAP Measures"
in this earnings release for important disclosures and
reconciliations of these financial measures to the most directly
comparable GAAP measure. These terms are defined elsewhere in this
earnings release.
|
|
(2) Adjusted diluted EPS for 2024 is
calculated based on approximately 725 million fully diluted
adjusted weighted average ordinary shares outstanding.
|
|
N/M - Represents a
change approximately equal or in excess of 100% or not
meaningful.
|
|
Conference Call and Webcast
Clarivate will host a conference call and webcast today to
review the results for the second quarter at 9:00 a.m. Eastern Time. The webcast is open to
all interested parties and may include forward-looking
information.
The live webcast of the earnings call will be accessible through
the investor relations section of the Company's website. To join
the webcast, please visit
https://events.q4inc.com/attendee/319586540.
Interested parties may access the live audio broadcast by
dialing +1 404-975-4839 or toll-free +1 833-470-1428 (in
North America) and +44 208 068
2558 or toll free +44 808 189 6484 (internationally). The
conference ID number is 143104.
A replay of the webcast will also be available on
https://ir.clarivate.com beginning two hours after the conclusion
of the live call and will remain available for one year.
Use 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)
|
June 30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents, including restricted cash
|
$
376.4
|
|
$
370.7
|
|
Accounts receivable,
net
|
796.3
|
|
908.3
|
|
Prepaid
expenses
|
87.1
|
|
88.5
|
|
Other current
assets
|
75.0
|
|
68.0
|
|
Assets held for
sale
|
—
|
|
26.7
|
|
Total current
assets
|
1,334.8
|
|
1,462.2
|
|
Property and equipment,
net
|
46.0
|
|
51.6
|
|
Other intangible
assets, net
|
8,771.3
|
|
9,006.6
|
|
Goodwill
|
1,736.5
|
|
2,023.7
|
|
Other non-current
assets
|
91.6
|
|
60.8
|
|
Deferred income
taxes
|
49.3
|
|
46.7
|
|
Operating lease
right-of-use assets
|
48.2
|
|
55.2
|
|
Total
assets
|
$
12,077.7
|
|
$
12,706.8
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
128.1
|
|
$
144.1
|
|
Accrued
compensation
|
107.2
|
|
126.5
|
|
Accrued expenses and
other current liabilities
|
314.1
|
|
315.2
|
|
Current portion of
deferred revenues
|
912.4
|
|
983.1
|
|
Current portion of
operating lease liability
|
23.3
|
|
24.4
|
|
Liabilities held for
sale
|
—
|
|
6.7
|
|
Total current
liabilities
|
1,485.1
|
|
1,600.0
|
|
Long-term
debt
|
4,635.3
|
|
4,721.1
|
|
Non-current portion of
deferred revenues
|
23.9
|
|
38.7
|
|
Other non-current
liabilities
|
49.9
|
|
41.9
|
|
Deferred income
taxes
|
229.0
|
|
249.6
|
|
Operating lease
liabilities
|
49.9
|
|
63.2
|
|
Total
liabilities
|
6,473.1
|
|
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 June 30, 2024 and December 31, 2023,
respectively
|
—
|
|
1,392.6
|
|
Ordinary Shares, no par
value; unlimited shares authorized; 724.1 and 666.1 shares issued
and outstanding as of June 30, 2024 and December 31, 2023,
respectively
|
13,157.7
|
|
11,740.5
|
|
Accumulated other
comprehensive loss
|
(497.0)
|
|
(495.3)
|
|
Accumulated
deficit
|
(7,056.1)
|
|
(6,645.5)
|
|
Total shareholders'
equity
|
5,604.6
|
|
5,992.3
|
|
Total liabilities
and shareholders' equity
|
$
12,077.7
|
|
$
12,706.8
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(In millions, except
per share data)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues
|
$
650.3
|
|
$
668.8
|
|
$
1,271.5
|
|
$
1,297.9
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
213.6
|
|
224.2
|
|
431.4
|
|
453.9
|
|
Selling, general and
administrative costs
|
185.2
|
|
192.9
|
|
377.1
|
|
387.7
|
|
Depreciation and
amortization
|
184.4
|
|
178.1
|
|
363.8
|
|
350.7
|
|
Goodwill and
intangible asset impairments
|
302.8
|
|
135.2
|
|
302.8
|
|
135.2
|
|
Restructuring and
other impairments
|
0.7
|
|
12.2
|
|
10.2
|
|
21.6
|
|
Other operating
expense (income), net
|
3.6
|
|
14.5
|
|
21.2
|
|
(17.5)
|
|
Total operating
expenses
|
890.3
|
|
757.1
|
|
1,506.5
|
|
1,331.6
|
|
Income (loss) from
operations
|
(240.0)
|
|
(88.3)
|
|
(235.0)
|
|
(33.7)
|
|
Fair value adjustment
of warrants
|
—
|
|
(2.9)
|
|
(5.2)
|
|
(1.8)
|
|
Interest expense,
net
|
71.1
|
|
73.0
|
|
141.3
|
|
146.6
|
|
Income (loss) before
income taxes
|
(311.1)
|
|
(158.4)
|
|
(371.1)
|
|
(178.5)
|
|
Provision (benefit)
for income taxes
|
(6.8)
|
|
(35.3)
|
|
8.2
|
|
(98.9)
|
|
Net income
(loss)
|
(304.3)
|
|
(123.1)
|
|
(379.3)
|
|
(79.6)
|
|
Dividends on preferred
shares
|
12.5
|
|
18.6
|
|
31.3
|
|
37.4
|
|
Net income (loss)
attributable to ordinary shares
|
$
(316.8)
|
|
$
(141.7)
|
|
$
(410.6)
|
|
$
(117.0)
|
|
|
|
|
|
|
|
|
|
Per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.46)
|
|
$
(0.21)
|
|
$
(0.61)
|
|
$
(0.17)
|
|
Diluted
|
$
(0.46)
|
|
$
(0.21)
|
|
$
(0.61)
|
|
$
(0.17)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
685.6
|
|
675.9
|
|
676.2
|
|
675.4
|
|
Diluted
|
685.6
|
|
675.9
|
|
676.2
|
|
675.4
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Six Months Ended
June 30,
|
|
(In
millions)
|
2024
|
|
2023
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
Net income
(loss)
|
$
(379.3)
|
|
$
(79.6)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
and amortization
|
363.8
|
|
350.7
|
|
Share-based
compensation
|
33.9
|
|
71.6
|
|
Restructuring
and other impairments, including goodwill
|
301.3
|
|
138.7
|
|
Gain on legal
settlement
|
—
|
|
(49.4)
|
|
Deferred income
taxes
|
(24.6)
|
|
(47.8)
|
|
Amortization of
debt issuance costs
|
7.9
|
|
9.1
|
|
Other operating
activities
|
14.3
|
|
17.0
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
103.2
|
|
121.7
|
|
Prepaid
expenses
|
1.1
|
|
(11.9)
|
|
Other
assets
|
(5.4)
|
|
38.6
|
|
Accounts
payable
|
(12.2)
|
|
6.2
|
|
Accrued
expenses and other current liabilities
|
(38.3)
|
|
(74.2)
|
|
Deferred
revenues
|
(59.7)
|
|
(18.4)
|
|
Operating
leases, net
|
(4.8)
|
|
(4.5)
|
|
Other
liabilities
|
1.2
|
|
(77.9)
|
|
Net cash provided by
operating activities
|
302.4
|
|
389.9
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
Capital
expenditures
|
(130.3)
|
|
(116.9)
|
|
Payments for
acquisitions, net of cash acquired
|
(17.1)
|
|
(1.1)
|
|
Proceeds from
divestitures, net of cash divested
|
(19.2)
|
|
10.5
|
|
Net cash provided by
(used for) investing activities
|
(166.6)
|
|
(107.5)
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
Principal
payments on term loans
|
(52.7)
|
|
(150.0)
|
|
Payment of debt
issuance costs and discounts
|
(20.1)
|
|
0.1
|
|
Cash dividends
on preferred shares
|
(37.7)
|
|
(37.7)
|
|
Payments
related to finance lease
|
(0.4)
|
|
(0.5)
|
|
Payments
related to tax withholding for share-based compensation
|
(9.9)
|
|
(9.7)
|
|
Net cash provided by
(used for) financing activities
|
(120.8)
|
|
(197.8)
|
|
Effects of
exchange rates
|
(9.3)
|
|
1.7
|
|
Net change in cash and
cash equivalents, including restricted cash
|
$
5.7
|
|
$
86.3
|
|
Cash and cash
equivalents, including restricted cash, beginning of
period
|
$
370.7
|
|
$
356.8
|
|
Cash and cash
equivalents, including restricted cash, end of period
|
$
376.4
|
|
$
443.1
|
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 $1,591.8 and $1,567.2 as of June 30,
2024 and 2023, respectively, which corresponds to an
increase of 1.6%. The increase in ACV was primarily due to the
impact of price increases.
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
June 30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages);
(unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Subscription
revenues
|
$
405.6
|
|
$
406.0
|
|
$
(0.4)
|
(0.1) %
|
0.1 %
|
— %
|
(0.9) %
|
0.7 %
|
|
Re-occurring
revenues
|
108.6
|
|
111.0
|
|
(2.4)
|
(2.2) %
|
— %
|
— %
|
(1.5) %
|
(0.7) %
|
|
Transactional and other
revenues
|
136.1
|
|
151.8
|
|
(15.7)
|
(10.3) %
|
0.1 %
|
(6.0) %
|
(0.3) %
|
(4.1) %
|
|
Revenues
|
$
650.3
|
|
$
668.8
|
|
$
(18.5)
|
(2.8) %
|
0.1 %
|
(1.4) %
|
(0.9) %
|
(0.6) %
|
|
|
|
Six Months Ended
June
30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages);
(unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Subscription
revenues
|
$
808.7
|
|
$
799.2
|
|
$
9.5
|
1.2 %
|
0.1 %
|
— %
|
(0.4) %
|
1.5 %
|
|
Re-occurring
revenues
|
211.1
|
|
218.7
|
|
(7.6)
|
(3.5) %
|
— %
|
— %
|
(0.6) %
|
(2.9) %
|
|
Transactional and other
revenues
|
251.7
|
|
280.0
|
|
(28.3)
|
(10.1) %
|
0.1 %
|
(2.9) %
|
— %
|
(7.3) %
|
|
Revenues
|
$ 1,271.5
|
|
$ 1,297.9
|
|
$
(26.4)
|
(2.0) %
|
0.1 %
|
(0.6) %
|
(0.4) %
|
(1.1) %
|
|
|
|
Three Months
Ended
June 30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages);
(unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Academia &
Government
|
$
344.5
|
|
$
342.0
|
|
$
2.5
|
0.7 %
|
— %
|
— %
|
(0.6) %
|
1.3 %
|
|
Intellectual
Property
|
201.6
|
|
216.3
|
|
(14.7)
|
(6.8) %
|
— %
|
(3.7) %
|
(1.3) %
|
(1.8) %
|
|
Life Sciences &
Healthcare
|
104.2
|
|
110.5
|
|
(6.3)
|
(5.7) %
|
0.4 %
|
(1.1) %
|
(1.1) %
|
(3.9) %
|
|
Revenues
|
$
650.3
|
|
$
668.8
|
|
$
(18.5)
|
(2.8) %
|
0.1 %
|
(1.4) %
|
(0.9) %
|
(0.6) %
|
|
|
|
Six Months Ended
June
30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages);
(unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Academia &
Government
|
$
662.2
|
|
$
656.7
|
|
$
5.5
|
0.8 %
|
— %
|
— %
|
(0.1) %
|
0.9 %
|
|
Intellectual
Property
|
402.5
|
|
425.4
|
|
(22.9)
|
(5.4) %
|
— %
|
(1.6) %
|
(0.6) %
|
(3.2) %
|
|
Life Sciences &
Healthcare
|
206.8
|
|
215.8
|
|
(9.0)
|
(4.2) %
|
0.3 %
|
(0.6) %
|
(0.6) %
|
(3.3) %
|
|
Revenues
|
$ 1,271.5
|
|
$ 1,297.9
|
|
$
(26.4)
|
(2.0) %
|
0.1 %
|
(0.6) %
|
(0.4) %
|
(1.1) %
|
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, unrealized foreign currency gains/losses,
restructuring expenses, non-operating income and/or expense, the
impact of certain non-cash fair value adjustments on financial
instruments, legal settlements, impairments, 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 six months ended
June 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
June 30,
|
|
Six Months Ended
June 30,
|
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
$ (304.3)
|
|
$ (123.1)
|
|
$ (379.3)
|
|
$
(79.6)
|
|
Provision (benefit) for
income taxes
|
(6.8)
|
|
(35.3)
|
|
8.2
|
|
(98.9)
|
|
Depreciation and
amortization
|
184.4
|
|
178.1
|
|
363.8
|
|
350.7
|
|
Interest expense,
net
|
71.1
|
|
73.0
|
|
141.3
|
|
146.6
|
|
Transaction related
costs
|
3.1
|
|
0.7
|
|
7.5
|
|
2.4
|
|
Share-based
compensation expense
|
18.9
|
|
30.5
|
|
34.3
|
|
71.7
|
|
Goodwill and intangible
asset impairments
|
302.8
|
|
135.2
|
|
302.8
|
|
135.2
|
|
Restructuring and other
impairments
|
0.7
|
|
12.2
|
|
10.2
|
|
21.6
|
|
Fair value adjustment
of warrants
|
—
|
|
(2.9)
|
|
(5.2)
|
|
(1.8)
|
|
Other(1)
|
4.5
|
|
16.5
|
|
27.1
|
|
(10.3)
|
|
Adjusted
EBITDA
|
$
274.4
|
|
$
284.9
|
|
$
510.7
|
|
$
537.6
|
|
|
|
|
|
|
|
|
|
Net income (loss)
margin
|
(46.8) %
|
|
(18.4) %
|
|
(29.8) %
|
|
(6.1) %
|
|
Adjusted EBITDA
margin
|
42.2 %
|
|
42.6 %
|
|
40.2 %
|
|
41.4 %
|
|
(1)
Primarily reflects the net impact of foreign exchange gains and
losses related to the remeasurement of balances and other items
that do not reflect our ongoing operating performance. In addition
to the net unrealized foreign exchange loss, the six months ended
June 30, 2024 also includes a $14.8 loss on divestiture and the six
months ended June 30, 2023 includes a $49.4 gain on legal
settlement.
|
Adjusted net income and Adjusted diluted EPS
Adjusted net income is calculated using Net income (loss),
adjusted to exclude acquisition and/or disposal-related transaction
costs (such costs include net income from continuing operations
before the provision for income taxes, depreciation and
amortization, and interest income and expense from the divested
business), amortization related to acquired intangible assets,
share-based compensation, unrealized foreign currency gains/losses,
restructuring expenses, the impact of certain non-cash fair value
adjustments on financial instruments, legal settlements,
impairments, 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 income tax impact of any
adjustments.
Adjusted diluted EPS is calculated by dividing Adjusted net
income by Adjusted diluted weighted average shares for the period.
The Adjusted diluted weighted average shares 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 six months ended
June 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
June 30,
|
|
2024
|
|
2023
|
|
(In millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Net income (loss) and
EPS
|
$
(304.3)
|
|
$
(0.44)
|
|
$
(123.1)
|
|
$
(0.18)
|
|
Transaction related
costs
|
3.1
|
|
—
|
|
0.7
|
|
—
|
|
Share-based
compensation expense
|
18.9
|
|
0.03
|
|
30.5
|
|
0.05
|
|
Amortization related to
acquired intangible assets
|
139.7
|
|
0.20
|
|
143.5
|
|
0.21
|
|
Goodwill and intangible
asset impairments
|
302.8
|
|
0.44
|
|
135.2
|
|
0.20
|
|
Restructuring and other
impairments
|
0.7
|
|
—
|
|
12.2
|
|
0.02
|
|
Fair value adjustment
of warrants
|
—
|
|
—
|
|
(2.9)
|
|
—
|
|
Other(1)
|
4.5
|
|
—
|
|
16.5
|
|
—
|
|
Income tax impact of
related adjustments
|
(23.2)
|
|
(0.03)
|
|
(60.4)
|
|
(0.09)
|
|
Adjusted net income and
Adjusted diluted EPS
|
$
142.2
|
|
$
0.20
|
|
$
152.2
|
|
$
0.21
|
|
Adjusted weighted
average ordinary shares, diluted
|
726.8
|
|
734.9
|
|
(1)
Primarily reflects the net impact of foreign exchange gains and
losses related to the remeasurement of balances and other items
that do not reflect our ongoing operating performance.
|
|
Six Months Ended
June 30,
|
|
2024
|
|
2023
|
|
(In millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Net income (loss) and
EPS
|
$
(379.3)
|
|
$
(0.56)
|
|
$
(79.6)
|
|
$
(0.12)
|
|
Transaction related
costs
|
7.5
|
|
0.01
|
|
2.4
|
|
—
|
|
Share-based
compensation expense
|
34.3
|
|
0.05
|
|
71.7
|
|
0.11
|
|
Amortization related to
acquired intangible assets
|
278.2
|
|
0.41
|
|
287.9
|
|
0.43
|
|
Goodwill and intangible
asset impairments
|
302.8
|
|
0.45
|
|
135.2
|
|
0.20
|
|
Restructuring and other
impairments
|
10.2
|
|
0.02
|
|
21.6
|
|
0.03
|
|
Fair value adjustment
of warrants
|
(5.2)
|
|
(0.01)
|
|
(1.8)
|
|
—
|
|
Other(1)
|
27.1
|
|
0.01
|
|
(10.3)
|
|
(0.05)
|
|
Income tax impact of
related adjustments
|
(29.9)
|
|
(0.04)
|
|
(144.0)
|
|
(0.21)
|
|
Adjusted net income and
Adjusted diluted EPS
|
$
245.7
|
|
$
0.34
|
|
$
283.1
|
|
$
0.39
|
|
Adjusted weighted
average ordinary shares, diluted
|
727.2
|
|
734.8
|
|
(1)
Primarily reflects the net impact of foreign exchange gains and
losses related to the remeasurement of balances and other items
that do not reflect our ongoing operating performance. In addition
to the net unrealized foreign exchange loss, the six months ended
June 30, 2024 also includes a $14.8 loss on divestiture and the six
months ended June 30, 2023 includes a $49.4 gain on legal
settlement.
|
Free cash flow
Free cash flow is calculated using Net cash provided by
operating activities less Capital expenditures. The following table
reconciles this non-GAAP measure to Net cash provided by operating
activities:
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
(In millions);
(unaudited)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net cash provided by
operating activities
|
$
126.2
|
|
$
162.4
|
|
$
302.4
|
|
$
389.9
|
|
Capital
expenditures
|
(65.9)
|
|
(57.6)
|
|
(130.3)
|
|
(116.9)
|
|
Free cash
flow
|
$
60.3
|
|
$
104.8
|
|
$
172.1
|
|
$
273.0
|
Reconciliations to Certain Non-GAAP Measures - 2024
Outlook
Adjusted EBITDA and Adjusted EBITDA Margin
The following table presents our calculation of Adjusted EBITDA
and Adjusted EBITDA margin for the 2024 outlook and reconciles
these non-GAAP measures to our Net income (loss) and Net income
(loss) margin for the same period:
|
Year Ending December
31, 2024
(Forecasted)
|
|
(In millions, except
percentages); (unaudited)
|
Low
|
|
High
|
|
Net income
(loss)
|
$
(415)
|
|
$
(355)
|
|
Provision (benefit) for
income taxes
|
35
|
|
35
|
|
Depreciation and
amortization
|
730
|
|
730
|
|
Interest expense,
net
|
283
|
|
283
|
|
Transaction related
costs
|
11
|
|
11
|
|
Share-based
compensation expense
|
71
|
|
71
|
|
Goodwill
impairment
|
303
|
|
303
|
|
Restructuring and other
impairments(1)
|
15
|
|
15
|
|
Fair value adjustment
of warrants
|
(5)
|
|
(5)
|
|
Other
|
27
|
|
27
|
|
Adjusted
EBITDA
|
$
1,055
|
|
$
1,115
|
|
|
|
|
|
Net income (loss)
margin
|
(16) %
|
|
(13) %
|
|
Adjusted EBITDA
margin
|
41 %
|
|
42 %
|
|
(1) Reflects restructuring costs
expected to be incurred in 2024 associated with the Segment
Optimization restructuring program.
|
Adjusted diluted EPS
The following table presents our calculation of Adjusted diluted
EPS for the 2024 outlook and reconciles this non-GAAP measure to
our per share Net income (loss) for the same period:
|
Year Ending December
31, 2024
(Forecasted)
|
|
(Unaudited)
|
Low
|
|
High
|
|
Net income
(loss)
|
$
(0.58)
|
|
$
(0.49)
|
|
Transaction related
costs
|
0.02
|
|
0.02
|
|
Share-based
compensation expense
|
0.10
|
|
0.10
|
|
Amortization related to
acquired intangible assets
|
0.76
|
|
0.76
|
|
Goodwill
impairment
|
0.42
|
|
0.42
|
|
Restructuring and other
impairments(1)
|
0.02
|
|
0.02
|
|
Fair value adjustment
of warrants
|
(0.01)
|
|
(0.01)
|
|
Other
|
0.03
|
|
0.04
|
|
Income tax impact of
related adjustments
|
(0.06)
|
|
(0.06)
|
|
Adjusted diluted
EPS
|
$
0.70
|
|
$
0.80
|
|
Adjusted weighted
average ordinary shares, diluted(2)
|
725 million
|
|
(1) Refer to
associated line item descriptions provided for the Adjusted EBITDA
outlook reconciliation table above.
|
|
(2) For the
purposes of calculating Adjusted diluted EPS, we have assumed the
"if-converted" method of share dilution on a full year
basis.
|
Free cash flow
The following table presents our calculation of Free cash flow
for the 2024 outlook and reconciles this non-GAAP measure to our
Net cash provided by operating activities for the same period:
|
Year Ending December
31, 2024
(Forecasted)
|
|
(In millions);
(unaudited)
|
Low
|
|
High
|
|
Net cash provided by
operating activities
|
$
695
|
|
$
775
|
|
Capital
expenditures
|
(275)
|
|
(275)
|
|
Free cash
flow
|
$
420
|
|
$
500
|
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multimedia:https://www.prnewswire.com/news-releases/clarivate-reports-second-quarter-2024-results-302215128.html
SOURCE Clarivate Plc