— Reaffirms 2023 Outlook —
London, UK — November 7, 2023 Clarivate Plc – (NYSE: CLVT) (the “Company” or “Clarivate”), a global leader in connecting people and organizations to intelligence they can trust to transform their world, today reported results for the third quarter.
Third Quarter 2023 Financial Highlights
- Revenues of $647.2 million increased 1.8%, and decreased 1.3% at constant currency(2)
- Organic revenues increased 1.7% driven by an increase in transactional and other revenues of 3.5%, subscription revenues of 1.3% and re-occurring revenues of 0.5%
- Net loss attributable to ordinary shares of $6.6 million; Net loss per diluted share of $0.01
- Adjusted Net Income(1)of $152.6 million increased 6.2%; Adjusted Income per diluted share(1) of $0.21 increased 5.0% or $0.01
- Adjusted EBITDA(1) of $281.4 million increased 3.6% driven by cost savings from integration programs; Adjusted EBITDA Margin(1) of 43.5% increased 80 basis points
- Net cash provided by operating activities decreased $44.4 million to $163.4 million; Free cash flow(1) decreased $38.7 million to $101.7 million, driven by timing-related, in quarter working capital requirements
Nine Months Ended September 30, 2023 Financial Highlights
- Revenues of $1,945.1 million decreased 2.0%, and 2.6% at constant currency(2), driven primarily by the divestiture of MarkMonitor in October 2022, for which there were no comparable amounts in the current year period
- Organic revenues increased 0.3% as an increase in subscription revenues of 2.3% was offset by a decline in re-occurring revenues of 1.0% and transactional and other revenues of 4.3%
- Net loss attributable to ordinary shares of $123.6 million; Net loss per diluted share of $0.18
- Adjusted Net Income(1) of $435.7 million decreased 6.1%; Adjusted Income per diluted share(1) of $0.59 decreased 6.3% or $0.04
- Adjusted EBITDA(1) of $819.0 million increased 1.3% driven by cost savings from integration programs; Adjusted EBITDA Margin(1) of 42.1% increased 140 basis points
- Net cash provided by operating activities increased $180.9 million to $553.3 million; Free cash flow(1) increased $158.8 million to $374.7 million
“Our improved third quarter performance was driven by organic growth from our Academia & Government and Life Sciences & Healthcare (LS&H) segments, each delivering their highest quarterly revenue growth rate over the past year,” said Jonathan Gear, Chief Executive Officer. “During the quarter, we secured new customer wins across all three of our segments and launched new product offerings including an AI-powered tool to simplify IP budgets and forecasts and an enhanced search platform within LS&H powered by generative artificial intelligence. We continue to drive operational improvements and innovation, which will benefit both our customers and Clarivate in the future.”
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in millions, except percentages and per share data), (unaudited) | 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues, net | $ | 647.2 | $ | 635.7 | $ | 11.5 | 1.8 | % | $ | 1,945.1 | $ | 1,984.5 | $ | (39.4) | (2.0) | % | |||||||||||||||||||||||||||||||
Net loss attributable to ordinary shares | $ | (6.6) | $ | (4,434.4) | $ | 4,427.8 | N/M | $ | (123.6) | $ | (4,339.9) | $ | 4,216.3 | N/M | |||||||||||||||||||||||||||||||||
Net loss per share, diluted | $ | (0.01) | $ | (6.64) | $ | 6.63 | N/M | $ | (0.18) | $ | (6.66) | $ | 6.48 | N/M | |||||||||||||||||||||||||||||||||
Weighted-average ordinary shares (diluted) | 670.9 | 675.2 | — | (0.6) | % | 673.9 | 680.6 | — | (1.0) | % | |||||||||||||||||||||||||||||||||||||
Adjusted EBITDA(1)
|
$ | 281.4 | $ | 271.6 | $ | 9.8 | 3.6 | % | $ | 819.0 | $ | 808.3 | $ | 10.7 | 1.3 | % | |||||||||||||||||||||||||||||||
Adjusted net income(1)
|
$ | 152.6 | $ | 143.7 | $ | 8.9 | 6.2 | % | $ | 435.7 | $ | 464.0 | $ | (28.3) | (6.1) | % | |||||||||||||||||||||||||||||||
Adjusted diluted EPS(1)(3)
|
$ | 0.21 | $ | 0.20 | $ | 0.01 | 5.0 | % | $ | 0.59 | $ | 0.63 | $ | (0.04) | (6.3) | % | |||||||||||||||||||||||||||||||
Adjusted weighted-average ordinary shares (diluted)(1)
|
731.4 | 732.9 | — | (0.2) | % | 733.6 | 739.0 | — | (0.7) | % | |||||||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 163.4 | $ | 207.8 | $ | (44.4) | (21.3) | % | $ | 553.3 | $ | 372.4 | $ | 180.9 | 48.6 | % | |||||||||||||||||||||||||||||||
Free cash flow(1)
|
$ | 101.7 | $ | 140.4 | $ | (38.7) | (27.5) | % | $ | 374.7 | $ | 215.9 | $ | 158.8 | 73.6 | % | |||||||||||||||||||||||||||||||
2023 Outlook | |||||
Revenues |
$2.60B to $2.67B
|
||||
Organic Revenue Growth |
0.00% to 2.00%
|
||||
Adjusted EBITDA(1)
|
$1.09B to $1.14B
|
||||
Adjusted EBITDA Margin(1)
|
42% to 42.5% | ||||
Adjusted Diluted EPS(1)(3)
|
$0.77 to $0.83
|
||||
Free Cash Flow(1)
|
$450M to $500M
|
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 398.9 | $ | 348.8 | |||||||
Restricted cash | 8.3 | 8.0 | |||||||||
Accounts receivable, net | 766.9 | 872.1 | |||||||||
Prepaid expenses | 100.0 | 89.4 | |||||||||
Other current assets | 75.1 | 76.9 | |||||||||
Assets held for sale | 25.5 | — | |||||||||
Total current assets | 1,374.7 | 1,395.2 | |||||||||
Property and equipment, net | 49.7 | 54.5 | |||||||||
Other intangible assets, net | 8,955.3 | 9,437.7 | |||||||||
Goodwill | 2,865.2 | 2,876.5 | |||||||||
Other non-current assets | 89.8 | 97.9 | |||||||||
Deferred income taxes | 26.4 | 24.2 | |||||||||
Operating lease right-of-use assets | 56.9 | 58.9 | |||||||||
Total Assets | $ | 13,418.0 | $ | 13,944.9 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 99.2 | $ | 101.4 | |||||||
Accrued compensation | 102.5 | 132.1 | |||||||||
Accrued expenses and other current liabilities | 346.7 | 352.1 | |||||||||
Current portion of deferred revenues | 889.2 | 947.5 | |||||||||
Current portion of operating lease liability | 23.5 | 25.7 | |||||||||
Current portion of long-term debt | 1.1 | 1.0 | |||||||||
Liabilities held for sale | 6.4 | — | |||||||||
Total current liabilities | 1,468.6 | 1,559.8 | |||||||||
Long-term debt | 4,866.4 | 5,005.0 | |||||||||
Non-current portion of deferred revenues | 36.5 | 38.5 | |||||||||
Other non-current liabilities | 41.3 | 140.1 | |||||||||
Deferred income taxes | 255.6 | 316.1 | |||||||||
Operating lease liabilities | 67.5 | 72.9 | |||||||||
Total liabilities | 6,735.9 | 7,132.4 | |||||||||
Commitments and contingencies | |||||||||||
Shareholders’ equity: | |||||||||||
Preferred Shares, no par value; 14.4 shares authorized; 5.25% Mandatory Convertible Preferred Shares, Series A, 14.4 shares issued and outstanding as of both September 30, 2023 and December 31, 2022 | 1,392.6 | 1,392.6 | |||||||||
Ordinary Shares, no par value; unlimited shares authorized; 663.9 and 674.4 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 11,729.8 | 11,744.7 | |||||||||
Accumulated other comprehensive loss | (657.8) | (665.9) | |||||||||
Accumulated deficit | (5,782.5) | (5,658.9) | |||||||||
Total shareholders’ equity | 6,682.1 | 6,812.5 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 13,418.0 | $ | 13,944.9 |
Condensed Consolidated Statement of Operations | |||||||||||
(In millions) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Revenues, net | $ | 647.2 | $ | 635.7 | |||||||
Operating expenses: | |||||||||||
Cost of revenues | 220.6 | 223.7 | |||||||||
Selling, general and administrative costs | 171.9 | 169.5 | |||||||||
Depreciation and amortization | 176.8 | 169.7 | |||||||||
Restructuring and lease impairments | 3.7 | 26.0 | |||||||||
Goodwill and intangible asset impairments | — | 4,448.6 | |||||||||
Other operating income, net | (13.0) | (26.6) | |||||||||
Total operating expenses | 560.0 | 5,010.9 | |||||||||
Income (loss) from operations | 87.2 | (4,375.2) | |||||||||
Mark to market gain on financial instruments | (12.6) | (53.3) | |||||||||
Interest expense and amortization of debt discount, net | 71.9 | 71.5 | |||||||||
Income (loss) before income taxes | 27.9 | (4,393.4) | |||||||||
Provision for income taxes | 15.6 | 22.1 | |||||||||
Net income (loss) | 12.3 | (4,415.5) | |||||||||
Dividends on preferred shares | 18.9 | 18.9 | |||||||||
Net loss attributable to ordinary shares | $ | (6.6) | $ | (4,434.4) | |||||||
Per share: | |||||||||||
Basic | $ | (0.01) | $ | (6.58) | |||||||
Diluted | $ | (0.01) | $ | (6.64) | |||||||
Weighted average shares used to compute earnings per share: | |||||||||||
Basic | 670.9 | 673.6 | |||||||||
Diluted | 670.9 | 675.2 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Revenues, net | $ | 1,945.1 | $ | 1,984.5 | |||||||
Operating expenses: | |||||||||||
Cost of revenues | 674.8 | 717.0 | |||||||||
Selling, general and administrative costs | 559.3 | 549.3 | |||||||||
Depreciation and amortization | 527.5 | 521.7 | |||||||||
Restructuring and lease impairments | 25.3 | 56.9 | |||||||||
Goodwill and intangible asset impairments | 135.2 | 4,448.6 | |||||||||
Other operating income, net | (30.5) | (64.9) | |||||||||
Total operating expenses | 1,891.6 | 6,228.6 | |||||||||
Income (loss) from operations | 53.5 | (4,244.1) | |||||||||
Mark to market gain on financial instruments | (14.4) | (202.7) | |||||||||
Interest expense and amortization of debt discount, net | 218.5 | 193.3 | |||||||||
Loss before income taxes | (150.6) | (4,234.7) | |||||||||
(Benefit) provision for income taxes | (83.3) | 48.9 | |||||||||
Net loss | (67.3) | (4,283.6) | |||||||||
Dividends on preferred shares | 56.3 | 56.3 | |||||||||
Net loss attributable to ordinary shares | $ | (123.6) | $ | (4,339.9) | |||||||
Per share: | |||||||||||
Basic | $ | (0.18) | $ | (6.41) | |||||||
Diluted | $ | (0.18) | $ | (6.66) | |||||||
Weighted average shares used to compute earnings per share: | |||||||||||
Basic | 673.9 | 676.7 | |||||||||
Diluted | 673.9 | 680.6 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash Flows From Operating Activities | |||||||||||
Net loss | $ | (67.3) | $ | (4,283.6) | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 527.5 | 521.7 | |||||||||
Share-based compensation | 97.1 | 66.5 | |||||||||
Restructuring and impairments, including goodwill | 138.9 | 4,469.9 | |||||||||
Mark to market gain on financial instruments | (14.4) | (202.7) | |||||||||
Amortization of debt issuance costs | 12.9 | 11.4 | |||||||||
Gain on legal settlement | (49.4) | — | |||||||||
Deferred income taxes | (51.3) | (3.3) | |||||||||
Other operating activities | 16.8 | (48.9) | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 110.3 | 76.9 | |||||||||
Prepaid expenses | (10.6) | (29.4) | |||||||||
Other assets | 19.5 | (57.5) | |||||||||
Accounts payable | (2.4) | (15.8) | |||||||||
Accrued expenses and other current liabilities | (33.8) | (54.0) | |||||||||
Deferred revenues | (56.9) | (68.2) | |||||||||
Operating leases, net | (6.2) | (5.2) | |||||||||
Other liabilities | (77.4) | (5.4) | |||||||||
Net cash provided by operating activities | 553.3 | 372.4 | |||||||||
Cash Flows From Investing Activities | |||||||||||
Capital expenditures | (178.6) | (156.5) | |||||||||
Payments for acquisitions and cost method investments, net of cash acquired | (2.3) | (14.3) | |||||||||
Proceeds from divestitures, net of cash and restricted cash | 10.5 | — | |||||||||
Net cash used in investing activities | (170.4) | (170.8) | |||||||||
Cash Flows From Financing Activities | |||||||||||
Principal payments on term loan | (150.0) | (21.5) | |||||||||
Payment of debt issuance costs and discounts | 0.1 | (2.1) | |||||||||
Proceeds from issuance of treasury shares | — | 2.2 | |||||||||
Repurchases of ordinary shares | (100.0) | (175.0) | |||||||||
Cash dividends on preferred shares | (56.7) | (56.6) | |||||||||
Proceeds from stock options exercised | — | 0.8 | |||||||||
Payments related to finance lease | (0.8) | (1.5) | |||||||||
Payments related to tax withholding for stock-based compensation | (14.8) | (13.8) | |||||||||
Net cash used in financing activities | (322.2) | (267.5) | |||||||||
Effects of exchange rates | (10.3) | (64.5) | |||||||||
Net increase in cash and cash equivalents | $ | 50.1 | $ | 17.7 | |||||||
Net increase (decrease) in restricted cash | 0.3 | (148.1) | |||||||||
Net increase (decrease) in cash and cash equivalents, and restricted cash | 50.4 | (130.4) | |||||||||
Beginning of period: | |||||||||||
Cash and cash equivalents | $ | 348.8 | $ | 430.9 | |||||||
Restricted cash | 8.0 | 156.7 | |||||||||
Total cash and cash equivalents, and restricted cash, beginning of period | 356.8 | 587.6 | |||||||||
End of period: | |||||||||||
Cash and cash equivalents | 398.9 | 448.6 | |||||||||
Restricted cash | 8.3 | 8.6 | |||||||||
Total cash and cash equivalents, and restricted cash, end of period | $ | 407.2 | $ | 457.2 | |||||||
Supplemental Cash Flow Information: | |||||||||||
Cash paid for interest | $ | 176.8 | $ | 152.2 | |||||||
Cash paid for income tax | $ | 29.1 | $ | 44.2 | |||||||
Capital expenditures included in accounts payable | $ | 15.2 | $ | 4.8 | |||||||
September 30, |
Change(1)
|
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(in millions, except percentages); (unaudited) | 2023 | 2022 | $ | % | |||||||||||||||||||
Annualized Contract Value | $ | 1,579.2 | $ | 1,647.1 | $ | (67.9) | (4.1) | % | |||||||||||||||
(1) The change in ACV is primarily due to the divestiture of MarkMonitor in October 2022 and changes in foreign exchange rates, partially offset by organic ACV growth of 2.6% largely attributed to the impact of price increases.
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Three Months Ended September 30, |
Change
|
Percentage of Change
|
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(in millions, except percentages); (unaudited) | 2023 | 2022 | $ | % | Acquisitions |
Disposals(1)
|
FX Impact
|
Organic
|
||||||||||||||||||||||||
Subscription revenues | $ | 408.1 | $ | 408.3 | $ | (0.2) | — | % | — | % | (4.4) | % | 3.1 | % | 1.3 | % | ||||||||||||||||
Re-occurring revenues | 106.8 | 102.7 | 4.1 | 4.0 | % | — | % | — | % | 3.5 | % | 0.5 | % | |||||||||||||||||||
Transactional and other revenues | 132.3 | 125.0 | 7.3 | 5.8 | % | — | % | (0.4) | % | 2.7 | % | 3.5 | % | |||||||||||||||||||
Deferred revenues adjustment | — | (0.3) | 0.3 | 100.0 | % | 100.0 | % | — | % | — | % | — | % | |||||||||||||||||||
Revenues, net | $ | 647.2 | $ | 635.7 | $ | 11.5 | 1.8 | % | — | % | (3.0) | % | 3.1 | % | 1.7 | % | ||||||||||||||||
(1) Represents revenues from the MarkMonitor divestiture completed in October 2022 and from the assets held-for-sale disposal group.
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Nine Months Ended September 30, |
Change
|
Percentage of Change
|
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(in millions, except percentages); (unaudited) | 2023 | 2022 | $ | % | Acquisitions |
Disposals(1)
|
FX Impact
|
Organic
|
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Subscription revenues | $ | 1,207.3 | $ | 1,220.7 | $ | (13.4) | (1.1) | % | — | % | (4.4) | % | 1.0 | % | 2.3 | % | ||||||||||||||||
Re-occurring revenues | 325.5 | 329.2 | (3.7) | (1.1) | % | — | % | — | % | (0.1) | % | (1.0) | % | |||||||||||||||||||
Transactional and other revenues | 412.3 | 435.5 | (23.2) | (5.3) | % | — | % | (1.2) | % | 0.2 | % | (4.3) | % | |||||||||||||||||||
Deferred revenues adjustment | — | (0.9) | 0.9 | 100.0 | % | 100.0 | % | — | % | — | % | — | % | |||||||||||||||||||
Revenues, net | $ | 1,945.1 | $ | 1,984.5 | $ | (39.4) | (2.0) | % | — | % | (3.0) | % | 0.7 | % | 0.3 | % | ||||||||||||||||
(1) Represents revenues from the MarkMonitor divestiture completed in October 2022 and from the assets held-for-sale disposal group.
|
Three Months Ended September 30, |
Change
|
Percentage of Change
|
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(in millions, except percentages); (unaudited) | 2023 | 2022 | $ | % | Acquisitions |
Disposals(1)
|
FX Impact
|
Organic
|
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Academia & Government | $ | 327.2 | $ | 307.1 | $ | 20.1 | 6.5 | % | — | % | — | % | 3.1 | % | 3.4 | % | ||||||||||||||||
Intellectual Property | 211.7 | 225.3 | (13.6) | (6.0) | % | — | % | (8.3) | % | 3.2 | % | (0.9) | % | |||||||||||||||||||
Life Sciences & Healthcare | 108.3 | 103.6 | 4.7 | 4.5 | % | — | % | — | % | 2.8 | % | 1.7 | % | |||||||||||||||||||
Deferred revenues adjustment | — | (0.3) | 0.3 | 100.0 | % | 100.0 | % | — | % | — | % | — | % | |||||||||||||||||||
Revenues, net | $ | 647.2 | $ | 635.7 | $ | 11.5 | 1.8 | % | — | % | (3.0) | % | 3.1 | % | 1.7 | % | ||||||||||||||||
(1) Represents revenues from the MarkMonitor divestiture completed in October 2022 and from the assets held-for-sale disposal group.
|
Nine Months Ended September 30, |
Change
|
Percentage of Change
|
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(in millions, except percentages); (unaudited) | 2023 | 2022 | $ | % | Acquisitions |
Disposals(1)
|
FX Impact
|
Organic
|
||||||||||||||||||||||||
Academia & Government | $ | 983.9 | $ | 951.6 | $ | 32.3 | 3.4 | % | — | % | — | % | 1.0 | % | 2.4 | % | ||||||||||||||||
Intellectual Property | 637.1 | 480.8 | (69.0) | (9.8) | % | — | % | (8.4) | % | 0.1 | % | (1.5) | % | |||||||||||||||||||
Life Sciences & Healthcare | 324.1 | 327.7 | (3.6) | (1.1) | % | — | % | — | % | 0.9 | % | (2.0) | % | |||||||||||||||||||
Deferred revenues adjustment | — | (0.9) | 0.9 | 100.0 | % | 100.0 | % | — | % | — | % | — | % | |||||||||||||||||||
Revenues, net | $ | 1,945.1 | $ | 1,984.5 | $ | (39.4) | (2.0) | % | — | % | (3.0) | % | 0.7 | % | 0.3 | % | ||||||||||||||||
(1) Represents revenues from the MarkMonitor divestiture completed in October 2022 and from the assets held-for-sale disposal group.
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions, except percentages); (unaudited) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net loss attributable to ordinary shares | $ | (6.6) | $ | (4,434.4) | $ | (123.6) | $ | (4,339.9) | |||||||||||||||
Dividends on preferred shares | 18.9 | 18.9 | 56.3 | 56.3 | |||||||||||||||||||
Net income (loss)
|
$ | 12.3 | $ | (4,415.5) | $ | (67.3) | $ | (4,283.6) | |||||||||||||||
Provision (benefit) for income taxes
|
15.6 | 22.1 | (83.3) | 48.9 | |||||||||||||||||||
Depreciation and amortization | 176.8 | 169.7 | 527.5 | 521.7 | |||||||||||||||||||
Interest expense and amortization of debt discount, net | 71.9 | 71.5 | 218.5 | 193.3 | |||||||||||||||||||
Deferred revenues adjustment | — | 0.3 | — | 0.9 | |||||||||||||||||||
Transaction related costs(1)
|
2.7 | (3.7) | 5.1 | 8.1 | |||||||||||||||||||
Share-based compensation expense | 25.4 | 20.8 | 97.1 | 79.9 | |||||||||||||||||||
Restructuring and lease impairments(2)
|
3.7 | 26.0 | 25.3 | 56.9 | |||||||||||||||||||
Goodwill and intangible asset impairments(3)
|
— | 4,448.6 | 135.2 | 4,448.6 | |||||||||||||||||||
Mark to market gain on financial instruments(4)
|
(12.6) | (53.3) | (14.4) | (202.7) | |||||||||||||||||||
Other(5)
|
(14.4) | (14.9) | (24.7) | (63.7) | |||||||||||||||||||
Adjusted EBITDA | $ | 281.4 | $ | 271.6 | $ | 819.0 | $ | 808.3 | |||||||||||||||
Adjusted EBITDA Margin | 43.5 | % | 42.7 | % | 42.1 | % | 40.7 | % | |||||||||||||||
(1) Includes costs incurred to complete business combination transactions, including acquisitions, dispositions, and capital market activities and include advisory, legal, and other professional and consulting costs.
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(2) Primarily reflects severance and related benefit costs related to approved restructuring programs.
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(3) During the nine months ended September 30, 2023, the Company recorded an impairment charge of $132.2 in connection with intangible assets classified as assets held-for-sale and a $3.0 goodwill impairment charge associated with the disposal group’s allocated portion of the IP segment reporting unit’s goodwill balance. During the three months ended September 30, 2022, a quantitative goodwill impairment assessment was performed over the Company’s reporting units, resulting in goodwill impairment of $4,448.6 for the three and nine months ended September 30, 2022.
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(4) Reflects mark-to-market adjustments on financial instruments under ASC 815, Derivatives and Hedging.
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(5) The current and prior year periods include the unrealized net gain or loss on foreign exchange re-measurement and other individually insignificant items that do not reflect our ongoing operating performance. The current year-to-date period also includes a $49.4 gain on legal settlement.
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Three Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(in millions, except per share amounts); (unaudited) | Amount | Per Share | Amount | Per Share | |||||||||||||||||||
Net loss attributable to ordinary shares, diluted | $ | (6.6) | $ | (0.01) | $ | (4,483.4) | $ | (6.64) | |||||||||||||||
Change in fair value of private placement warrants | — | — | 49.0 | 0.07 | |||||||||||||||||||
Net loss attributable to ordinary shares | $ | (6.6) | $ | (0.01) | $ | (4,434.4) | $ | (6.58) | |||||||||||||||
Dividends on preferred shares | 18.9 | 0.03 | 18.9 | 0.03 | |||||||||||||||||||
Net income (loss)
|
$ | 12.3 | $ | 0.02 | $ | (4,415.5) | $ | (6.54) | |||||||||||||||
Deferred revenues adjustment | — | — | 0.3 | — | |||||||||||||||||||
Transaction related costs(1)
|
2.7 | — | (3.7) | (0.01) | |||||||||||||||||||
Share-based compensation expense | 25.4 | 0.04 | 20.8 | 0.03 | |||||||||||||||||||
Amortization related to acquired intangible assets | 141.9 | 0.21 | 141.2 | 0.21 | |||||||||||||||||||
Restructuring and lease impairments(2)
|
3.7 | 0.01 | 26.0 | 0.04 | |||||||||||||||||||
Goodwill and intangible asset impairments(3)
|
— | — | 4,448.6 | 6.59 | |||||||||||||||||||
Mark to market gain on financial instruments(4)
|
(12.6) | (0.02) | (53.3) | (0.08) | |||||||||||||||||||
Other(5)
|
(14.4) | (0.04) | (14.9) | (0.03) | |||||||||||||||||||
Income tax impact of related adjustments | (6.4) | (0.01) | (5.8) | (0.01) | |||||||||||||||||||
Adjusted net income and Adjusted diluted EPS | $ | 152.6 | $ | 0.21 | $ | 143.7 | $ | 0.20 | |||||||||||||||
Adjusted weighted-average ordinary shares (Diluted) | 731.4 | 732.9 | |||||||||||||||||||||
(1-5) Refer to associated line item descriptions provided for the Adjusted EBITDA reconciliation table above.
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Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(in millions, except per share amounts); (unaudited) | Amount | Per Share | Amount | Per Share | |||||||||||||||||||
Net loss attributable to ordinary shares, diluted | $ | (123.6) | $ | (0.18) | $ | (4,530.6) | $ | (6.66) | |||||||||||||||
Change in fair value of private placement warrants | — | — | 190.7 | 0.28 | |||||||||||||||||||
Net loss attributable to ordinary shares | $ | (123.6) | $ | (0.18) | $ | (4,339.9) | $ | (6.38) | |||||||||||||||
Dividends on preferred shares | 56.3 | 0.08 | 56.3 | 0.08 | |||||||||||||||||||
Net loss | $ | (67.3) | $ | (0.10) | $ | (4,283.6) | $ | (6.29) | |||||||||||||||
Deferred revenues adjustment | — | — | 0.9 | — | |||||||||||||||||||
Transaction related costs(1)
|
5.1 | 0.01 | 8.1 | 0.01 | |||||||||||||||||||
Share-based compensation expense | 97.1 | 0.14 | 79.9 | 0.12 | |||||||||||||||||||
Amortization related to acquired intangible assets | 429.8 | 0.64 | 437.1 | 0.64 | |||||||||||||||||||
Restructuring and lease impairments(2)
|
25.3 | 0.04 | 56.9 | 0.08 | |||||||||||||||||||
Goodwill and intangible asset impairments(3)
|
135.2 | 0.20 | 4,448.6 | 6.54 | |||||||||||||||||||
Mark to market gain on financial instruments(4)
|
(14.4) | (0.02) | (202.7) | (0.30) | |||||||||||||||||||
Other(5)
|
(24.7) | (0.10) | (63.7) | (0.14) | |||||||||||||||||||
Income tax impact of related adjustments | (150.4) | (0.22) | (17.5) | (0.03) | |||||||||||||||||||
Adjusted net income and Adjusted diluted EPS | $ | 435.7 | $ | 0.59 | $ | 464.0 | $ | 0.63 | |||||||||||||||
Adjusted weighted-average ordinary shares (Diluted) | 733.6 | 739.0 | |||||||||||||||||||||
(1-5) Refer to associated line item descriptions provided for the Adjusted EBITDA reconciliation table above.
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions); (unaudited) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net cash provided by operating activities | $ | 163.4 | $ | 207.8 | $ | 553.3 | $ | 372.4 | |||||||||||||||
Capital expenditures | (61.7) | (67.4) | (178.6) | (156.5) | |||||||||||||||||||
Free cash flow | $ | 101.7 | $ | 140.4 | $ | 374.7 |
|
$ | 215.9 |
(in millions); (unaudited) | Twelve months ended September 30, 2023 | ||||
Net income attributable to ordinary shares
|
$ | 180.7 | |||
Dividends on preferred shares | 75.4 | ||||
Net income
|
$ | 256.1 | |||
(Benefit) provision for income taxes
|
(161.1) | ||||
Depreciation and amortization | 716.3 | ||||
Interest expense and amortization of debt discount, net | 295.5 | ||||
Deferred revenues adjustment | 0.1 | ||||
Transaction related costs | 11.2 | ||||
Share-based compensation expense | 119.4 | ||||
Gain on sale from divestitures(1)
|
(278.5) | ||||
Restructuring and lease impairments(2)
|
35.1 | ||||
Goodwill and intangible asset impairments(3)
|
135.7 | ||||
Mark-to-market gain on financial instruments(4)
|
(18.5) | ||||
Other | 12.1 | ||||
Adjusted EBITDA | $ | 1,123.4 | |||
Realized foreign exchange gain | (16.1) | ||||
Cost savings(5)
|
1.6 | ||||
Standalone Adjusted EBITDA | $ | 1,108.9 | |||
(1) Represents the net gain from the sale of the MarkMonitor Domain Management business during the three months ended December 31, 2022.
|
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(2) Primarily reflects severance and related benefit costs related to approved restructuring programs.
|
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(3) Primarily includes the intangible assets impairment recorded during the three months ended June 30, 2023 related to Assets Held for Sale and Divested Operations.
|
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(4) Reflects mark-to-market adjustments on financial instruments under ASC 815, Derivatives and Hedging.
|
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(5) Reflects the estimated annualized run-rate cost savings, net of actual cost savings realized, related to restructuring and other cost savings initiatives undertaken during the period (exclusive of any cost reductions in our estimated standalone operating costs), including synergies related to acquisitions.
|
Year Ending December 31, 2023 (Forecasted) |
|||||||||||
(in millions, except percentages) | Low | High | |||||||||
Net loss attributable to ordinary shares | $ | (182) | $ | (132) | |||||||
Dividends on preferred shares(1)
|
75 | 75 | |||||||||
Net loss | $ | (107) | $ | (57) | |||||||
(Benefit) provision for income taxes | (63) | (63) | |||||||||
Depreciation and amortization | 707 | 707 | |||||||||
Interest expense and amortization of debt discount, net | 292 | 292 | |||||||||
Restructuring and lease impairments(2)
|
30 | 30 | |||||||||
Goodwill and intangible asset impairments(3)
|
135 | 135 | |||||||||
Transaction related costs | 5 | 5 | |||||||||
Mark to market adjustment on financial instruments | (14) | (14) | |||||||||
Share-based compensation expense | 130 | 130 | |||||||||
Other(4)
|
(25) | (25) | |||||||||
Adjusted EBITDA | $ | 1,090 | $ | 1,140 | |||||||
Adjusted EBITDA margin | 42.0 | % | 42.5 | % | |||||||
(1) Dividends on our mandatory convertible preferred shares (“MCPS”) are payable quarterly at an annual rate of 5.25% of the liquidation preference of $100 per share. For the purposes of calculating net loss attributable to Clarivate, we have excluded the accrued and anticipated MCPS dividends.
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(2) Reflects restructuring costs expected to be incurred in 2023 associated with the ProQuest acquisition and Segment Optimization restructuring programs.
|
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(3) Primarily includes the intangible assets impairment recorded during the three months ended June 30, 2023 related to Assets Held for Sale and Divested Operations
|
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(4) Primarily includes the gain on legal settlement partially offset by a net loss on foreign exchange re-measurement.
|
Year Ending December 31, 2023 (Forecasted) |
|||||||||||
(in millions) | Low | High | |||||||||
Net loss attributable to ordinary shares | $ | (0.25) | $ | (0.18) | |||||||
Dividends on preferred shares(1)
|
0.10 | 0.10 | |||||||||
Net loss | $ | (0.15) | $ | (0.08) | |||||||
Restructuring and lease impairments(2)
|
0.04 | 0.04 | |||||||||
Goodwill and intangible asset impairments(3)
|
0.18 | 0.18 | |||||||||
Share-based compensation expense | 0.18 | 0.18 | |||||||||
Amortization related to acquired intangible assets | 0.78 | 0.78 | |||||||||
Other(4)
|
(0.04) | (0.05) | |||||||||
Income tax impact of related adjustments | (0.22) | (0.22) | |||||||||
Adjusted Diluted EPS | $ | 0.77 | $ | 0.83 | |||||||
Adjusted weighted-average ordinary shares (Diluted)(5)
|
734 million | ||||||||||
(1-4) Refer to associated line item descriptions provided for the Adjusted EBITDA outlook reconciliation table above.
|
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(5) For the purposes of calculating adjusted earnings per share, the Company has excluded the accrued and anticipated MCPS dividends and assumed the “if-converted” method of share dilution.
|
Year Ending December 31, 2023 (Forecasted) |
|||||||||||
(in millions) | Low | High | |||||||||
Net cash provided by operating activities | $ | 695 | $ | 745 | |||||||
Capital expenditures | (245) | (245) | |||||||||
Free cash flow | $ | 450 | $ | 500 |
Media Contact:
Amy Bourke-Waite, Senior Director, Corporate Communications
newsroom@clarivate.com
Investor Relations Contact:
Mark Donohue, Vice President, Investor Relations
investor.relations@clarivate.com
215-243-2202