Clarivate Reports Fourth Quarter and Full Year 2024 Results
Comunicato Precedente
Comunicato Successivo
— Repurchased $200 million ordinary shares and pre-paid $198 million of debt in 2024 as part of balanced capital allocation strategy —
— Initiates review of strategic alternatives including potential divestitures —
— Provides 2025 Outlook —
LONDON, Feb. 19, 2025 /PRNewswire/ -- Clarivate Plc (NYSE: CLVT) (the "Company" or "Clarivate"), a leading global provider of transformative intelligence, today reported results for the fourth quarter and full year ended December 31, 2024.
Total revenue for the fourth quarter of 2024 was $663.0 million, compared to total revenue of $683.7 million in the fourth quarter of 2023. Organic revenues for the fourth quarter of 2024 decreased 0.7%, as an increase in subscription and transactional revenues was offset by lower re-occurring revenues, compared to the fourth quarter of 2023.
Net loss for the fourth quarter of 2024 was $191.8 million, or $0.27 per diluted share, an improvement compared to a net loss of $843.9 million, or $1.30 per diluted share, in the fourth quarter of 2023. Adjusted net income for the fourth quarter of 2024 was $145.5 million, or $0.21 per diluted share, compared to $163.4 million, or $0.23 per diluted share, for the fourth quarter of 2023. Adjusted EBITDA was $285.3 million for the fourth quarter of 2024, compared to Adjusted EBITDA of $298.2 million for the fourth quarter of 2023.
Total revenue for the full year of 2024 was $2.56 billion, compared to total revenue of $2.63 billion for the full year of 2023. Organic revenues decreased 1.4%, as an increase in subscription revenues was offset by lower transactional and re-occurring revenues.
Net loss for the full year of 2024 was $636.7 million, or $0.96 per diluted share, an improvement compared to a net loss of $911.2 million, or $1.47 per diluted share, for the full year of 2023. Adjusted net income for the full year of 2024 was $525.3 million, or $0.73 per diluted share, compared to $599.1 million, or $0.82 per diluted share, for the full year of 2023. Adjusted EBITDA was $1,060.4 million for the full year of 2024, compared to Adjusted EBITDA of $1,117.2 million for the full year of 2023.
Clarivate generated $357.5 million of free cash flow for the full year of 2024 and repurchased $200.0 million of ordinary shares and pre-paid $198.1 million of term-loan debt. In December 2024, the Board of Directors authorized a new share repurchase program of up to $500.0 million of the Company's outstanding ordinary shares through open-market purchases for a period of two years, from January 1, 2025 through December 31, 2026.
"We are committed to reinvigorating our business to deliver healthy organic growth and build for the future," said Matti Shem Tov, Chief Executive Officer. "Last year we released a string of AI-powered product enhancements, and as part of our Value Creation Plan (VCP), we recently launched new subscription-based solutions including ProQuest e-Books, ProQuest Digital Collections and DRG Fusion. We are focused on driving subscription and re-occurring revenue growth and plan to discontinue sales of certain low-margin transactional products in 2025 and 2026, which will improve our revenue predictability."
Mr. Shem Tov continued: "Under our VCP initiatives, we are improving our sales execution by enhancing key leadership roles, realigning account management models around specialist areas, and investing in customer success teams. We are harnessing the power of technology and AI to accelerate product innovation and drive development velocity through customer collaboration. We believe the steps we are taking will improve our financial performance and operational efficiency."
Selected Financial Information
Fourth Quarter 2024 Commentary
Revenues for the fourth quarter decreased $20.7 million, or 3.0%, to $663.0 million, primarily due to IP and A&G product group divestitures completed in 2024. Organic revenues decreased $5.0 million or 0.7%.
Subscription revenues for the fourth quarter decreased $3.8 million, or 0.9%, to $407.0 million. Organic subscription revenues increased 0.1%.
Re-occurring revenues for the fourth quarter decreased $7.1 million, or 6.0%, to $112.0 million. Organic re-occurring revenues decreased 5.4%, primarily due to lower IP patent renewal volume.
Transactional revenues for the fourth quarter decreased $9.8 million, or 6.4%, to $144.0 million. Organic transactional revenues increased 0.6%, primarily due to higher A&G sales.
Full Year 2024 Commentary
Revenues for the full year 2024 decreased $72.1 million, or 2.7%, to $2,556.7 million, primarily due to lower transactional sales across all three segments and the IP product group divestiture. Organic revenues decreased $35.9 million, or 1.4%.
Subscription revenues for the full year 2024 increased $8.7 million, or 0.5%, to $1,626.8 million. Organic subscription revenues increased 0.9%, driven by price increases, partially offset by lower net volume in IP and LS&H.
Re-occurring revenues for the full year 2024 decreased $14.8 million, or 3.3%, to $429.8 million. Organic re-occurring revenues decreased 3.1%, primarily due to lower IP patent renewal volume.
Transactional revenues for the full year 2024 decreased $66.0 million, or 11.7%, to $500.1 million. Organic transactional revenues decreased 6.6%, primarily due to lower A&G and LS&H sales.
Balance Sheet and Cash Flow
As of December 31, 2024, cash and cash equivalents of $295.2 million decreased $75.5 million compared to December 31, 2023.
The Company's total debt outstanding as of December 31, 2024 was $4,571.1 million, a decrease of $199.2 million compared to December 31, 2023, driven by accelerated debt repayments.
Net cash provided by operating activities of $646.6 million for the year ended December 31, 2024 decreased $97.6 million compared to the prior year period, primarily due to lower operating results and higher working capital requirements due to timing of payments. Free cash flow for the year ended December 31, 2024 was $357.5 million, a decrease of $144.2 million compared to the prior year period.
Review of Strategic Alternatives
Clarivate also announced that it has initiated the exploration of strategic alternatives including potential divestitures. The Company, in consultation with financial and legal advisors, will review and consider a full range of options focused on maximizing shareholder value, including divesting business units or an entire segment.
The Company intends to be diligent and thorough in reviewing its options and completing its review in a timely manner, but does not intend to comment until the process is concluded or it is otherwise determined that further disclosure is necessary or appropriate. There can be no assurance that the review process will result in any transaction or any other strategic change or outcome, or as to the timing of any of the foregoing.
Morgan Stanley & Co. LLC and Moelis & Company LLC are serving as financial advisors to the Company.
Outlook for 2025 (forward-looking statement)
"Our 2025 outlook includes the disposal of specific Academia & Government and Life Sciences & Healthcare transactional products, which are expected to be completed by the end of 2026," said
Jonathan Collins, Executive Vice President and Chief Financial Officer. "We currently expect recurring organic revenues (subscription and re-occurring revenues combined) to be flat, at the mid-point in 2025. We will continue to aggressively manage our cost structure and currently expect a balanced approach to capital allocation in 2025."
The full year outlook presented below assumes no further acquisitions, divestitures, or unanticipated events.
Conference Call and Webcast
Clarivate will host a conference call and webcast today to review the results for the fourth quarter and full year 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/673591630.
Interested parties may access the live audio broadcast. U.S. participants may call 800-715-9871; international participants may call +1 646-307-1963 (long-distance charges will apply). The conference ID number is 8621261.
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 under the caption "Risk Factors" in our annual report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission ("SEC"). 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.
Supplemental Revenues Information
Annualized contract value ("ACV"), at any point in time, represents the annualized value of all active customer subscription-based license agreements for the next 12 months, assuming those coming up for renewal during the measurement period are renewed at their current price level. Our organic ACV grew 0.9% in 2024, compared to 2023, primarily driven by price increases. Our total ACV for 2024, compared to 2023, declined 1.1% primarily due to the ScholarOne divestiture in November 2024.
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.
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 share-based compensation, impairments, restructuring expenses, the impact of certain non-cash fair value adjustments on financial instruments, acquisition and/or disposal-related transaction costs, unrealized foreign currency gains/losses, legal settlements, 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 fourth quarter and full year of 2024 and 2023, respectively, and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss) margin for the same periods:
Adjusted net income and Adjusted diluted EPS
Adjusted net income represents Net income (loss), adjusted to exclude amortization related to acquired intangible assets, share-based compensation, impairments, restructuring expenses, the impact of certain non-cash fair value adjustments on financial instruments, acquisition and/or disposal-related transaction costs, unrealized foreign currency gains/losses, legal settlements, 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 associated income tax impact of such adjustments.
Adjusted diluted EPS is calculated by dividing Adjusted net income by Adjusted diluted weighted average shares. The Adjusted diluted weighted average shares calculation 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 fourth quarter and full year of 2024 and 2023, respectively, and reconciles these non-GAAP measures to our Net income (loss) and Diluted EPS for the same periods:
Free cash flow
Free cash flow represents Net cash provided by operating activities less Capital expenditures. The following table reconciles this non-GAAP measure to Net cash provided by operating activities for the same periods:
Reconciliations to Certain Non-GAAP Measures - 2025 Outlook
Adjusted EBITDA and Adjusted EBITDA Margin
The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the 2025 outlook and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss) margin for the same period:
Adjusted diluted EPS
The following table presents our calculation of Adjusted diluted EPS for the 2025 outlook and reconciles this non-GAAP measure to our per share Net income (loss) for the same period:
Free cash flow
The following table presents our calculation of Free cash flow for the 2025 outlook and reconciles this non-GAAP measure to our Net cash provided by operating activities for the same period:
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