Clarivate Reports Third Quarter 2024 Results
Clarivate (NYSE: CLVT) reported Q3 2024 financial results showing revenue decline to $622.2 million, down 3.9%, with organic revenues decreasing 2.6%. The company posted a net loss of $65.6 million ($0.09 per diluted share). Adjusted EBITDA fell 6.0% to $264.4 million, with margins declining 100 basis points to 42.5%. Free cash flow improved to $126.3 million. For the nine months ended September 30, revenues declined 2.6% to $1,893.7 million, with a net loss of $444.9 million. The CEO acknowledged unsatisfactory results, citing overdependence on fluctuating transactional revenue and announced a Value Creation Plan to improve performance.
Clarivate (NYSE: CLVT) ha riportato i risultati finanziari del terzo trimestre del 2024, evidenziando una diminuzione del fatturato a 622,2 milioni di dollari, in calo del 3,9%, con ricavi organici in diminuzione del 2,6%. L'azienda ha registrato una perdita netta di 65,6 milioni di dollari (0,09 dollari per azione diluita). EBITDA rettificato è sceso del 6,0% a 264,4 milioni di dollari, con margini in calo di 100 punti base al 42,5%. Il flusso di cassa libero è migliorato a 126,3 milioni di dollari. Nei nove mesi conclusi il 30 settembre, i ricavi sono diminuiti del 2,6% a 1.893,7 milioni di dollari, con una perdita netta di 444,9 milioni di dollari. Il CEO ha riconosciuto i risultati insoddisfacenti, citando l'eccessiva dipendenza dai ricavi transazionali fluttuanti e ha annunciato un Piano di Creazione di Valore per migliorare le prestazioni.
Clarivate (NYSE: CLVT) reportó los resultados financieros del tercer trimestre de 2024, mostrando una disminución de ingresos a 622,2 millones de dólares, una caída del 3,9%, con ingresos orgánicos disminuyendo un 2,6%. La empresa registró una pérdida neta de 65,6 millones de dólares (0,09 dólares por acción diluida). EBITDA ajustado cayó un 6,0% a 264,4 millones de dólares, con márgenes disminuyendo 100 puntos básicos al 42,5%. El flujo de caja libre mejoró a 126,3 millones de dólares. Para los nueve meses terminados el 30 de septiembre, los ingresos disminuyeron un 2,6% a 1.893,7 millones de dólares, con una pérdida neta de 444,9 millones de dólares. El CEO reconoció resultados insatisfactorios, citando la sobredependencia de los ingresos transaccionales fluctuantes y anunció un Plan de Creación de Valor para mejorar el rendimiento.
Clarivate (NYSE: CLVT)는 2024년 3분기 재무 결과를 발표하며 수익이 6억 2,220만 달러로 3.9% 감소했고, 유기적 수익이 2.6% 감소했다고 보고했습니다. 회사는 6,560만 달러의 순손실(희석 주당 0.09달러)을 기록했습니다. 조정된 EBITDA는 6.0% 감소하여 2억 6,440만 달러에 달했으며, 마진은 42.5%로 100베이시스 포인트 하락했습니다. 자유 현금 흐름은 1억 2,630만 달러로 개선되었습니다. 9월 30일로 종료된 9개월 동안 수익은 2.6% 감소하여 18억 9,370만 달러에 달했으며, 순손실은 4억 4,490만 달러에 이릅니다. CEO는 만족스럽지 못한 결과를 인정하며, 변동성이 큰 거래 수익에 대한 과도한 의존을 언급하고 성과 향상을 위한 가치 창출 계획을 발표했습니다.
Clarivate (NYSE: CLVT) a annoncé les résultats financiers du troisième trimestre 2024, montrant une baisse des revenus à 622,2 millions de dollars, soit une diminution de 3,9 %, avec des revenus organiques en baisse de 2,6 %. L'entreprise a affiché une perte nette de 65,6 millions de dollars (0,09 dollar par action diluée). EBITDA ajusté a chuté de 6,0 % à 264,4 millions de dollars, les marges ayant diminué de 100 points de base à 42,5 %. Le flux de trésorerie disponible a augmenté à 126,3 millions de dollars. Pour les neuf mois se terminant le 30 septembre, les revenus ont diminué de 2,6 % à 1 893,7 millions de dollars, avec une perte nette de 444,9 millions de dollars. Le PDG a reconnu des résultats insatisfaisants, citant une dépendance excessive à des revenus transactionnels fluctuants et a annoncé un Plan de Création de Valeur pour améliorer les performances.
Clarivate (NYSE: CLVT) hat die Finanzergebnisse für das dritte Quartal 2024 veröffentlicht, dabei sank der Umsatz auf 622,2 Millionen US-Dollar, was einem Rückgang von 3,9% entspricht, während die organischen Einnahmen um 2,6% zurückgingen. Das Unternehmen verzeichnete einen Nettoverlust von 65,6 Millionen US-Dollar (0,09 US-Dollar pro verwässerter Aktie). Bereinigtes EBITDA fiel um 6,0% auf 264,4 Millionen US-Dollar, wobei die Margen um 100 Basispunkte auf 42,5% sanken. Der freie Cashflow verbesserte sich auf 126,3 Millionen US-Dollar. In den neun Monaten bis zum 30. September sanken die Einnahmen um 2,6% auf 1.893,7 Millionen US-Dollar, bei einem Nettoverlust von 444,9 Millionen US-Dollar. Der CEO erkannte unzufriedenstellende Ergebnisse an, nannte die übermäßige Abhängigkeit von schwankenden Transaktionseinnahmen und kündigte einen Wertschöpfungsplan zur Verbesserung der Leistung an.
- Free cash flow increased by $24.6 million to $126.3 million in Q3
- Subscription revenues showed slight growth of 0.6% in Q3
- Operating cash flow improved by $39.5 million to $202.9 million
- Q3 revenues declined 3.9% to $622.2 million
- Net loss of $65.6 million in Q3 2024
- Adjusted EBITDA decreased 6.0% with margins declining 100 basis points
- Transactional and other revenues dropped 13.6%
- Nine-month net loss of $444.9 million
- Company removed financial outlook
Insights
The Q3 results reveal significant challenges at Clarivate, with concerning trends across key metrics. Revenue declined -3.9% to
The most worrying aspect is the
The new CEO's acknowledgment of "unsatisfactory" results and overdependence on fluctuating revenue streams suggests fundamental business model issues that will require significant restructuring through their Value Creation Plan.
Third Quarter 2024 Financial Highlights
- Revenues of
$622.2 million 3.9% - Organic revenues decreased
2.6% , as an increase in subscription revenues of0.6% was offset by a decrease in re-occurring revenues of1.1% and transactional and other revenues of13.6% - Net loss of
$65.6 million $0.09 - Adjusted net income(1) of
$134.1 million 12.1% ; Adjusted diluted EPS(1) of$0.19 9.5% or$0.02 - Adjusted EBITDA(1) of
$264.4 million 6.0% ; Adjusted EBITDA margin(1) of42.5% decreased 100 basis points primarily due to lower revenues - Net cash provided by operating activities of
$202.9 million $39.5 million $126.3 million $24.6 million
Nine Months Ended September 30, 2024 Financial Highlights
- Revenues of
$1,893.7 million 2.6% - Organic revenues decreased
1.5% as an increase in subscription revenues of1.2% was offset by a decline in re-occurring revenues of2.3% and transactional and other revenues of9.3% - Net loss of
$444.9 million $0.69 - Adjusted net income(1) of
$379.8 million 12.8% ; Adjusted diluted EPS(1) of$0.52 11.9% or$0.07 - Adjusted EBITDA(1) of
$775.1 million 5.4% ; Adjusted EBITDA margin(1) of40.9% decreased 120 basis points primarily due to lower revenues - Net cash provided by operating activities decreased
$48.0 million $505.3 million $76.3 million $298.4 million
"Clarivate's third quarter results are unsatisfactory and reflect an overdependency on fluctuating transactional revenue and areas of the business with low margin characteristics," said Matti Shem Tov, Chief Executive Officer. "As we look ahead, it is clear the Company has work to do to improve performance. Our Value Creation Plan is designed to increase subscription and re-occurring revenue, improve sales execution, accelerate innovation and continue portfolio solutions rationalization. We will leverage Clarivate's strong foundation, unique product offerings and talented team to take the necessary actions to improve predictability and drive profitable growth. Alongside the management team and Board, I am invigorated by the opportunities before us and remain focused on successfully executing our strategy to realize Clarivate's potential."
Removal of Outlook
As a result of the recent CEO transition and the work being done under the Value Creation Plan, the Company has removed its forward-looking outlook for 2024. All previous outlooks provided by the Company should no longer be relied upon.
Selected Financial Information
Three Months Ended September 30, | Change | Nine Months Ended | Change | ||||||||||||
(in millions, except percentages and per share data), (unaudited) | 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||
Revenues | $ 622.2 | $ 647.2 | $ (25.0) | (3.9) % | $ 1,893.7 | $ 1,945.1 | $ (51.4) | (2.6) % | |||||||
Net income (loss) | $ (65.6) | $ 12.3 | $ (77.9) | N/M | $ (444.9) | $ (67.3) | $ (377.6) | N/M | |||||||
Diluted EPS | $ (0.09) | $ (0.01) | $ (0.08) | N/M | $ (0.69) | $ (0.18) | $ (0.51) | N/M | |||||||
Weighted average ordinary shares, diluted | 718.7 | 670.9 | 47.8 | 7.1 % | 690.5 | 673.9 | 16.6 | 2.5 % | |||||||
Adjusted EBITDA(1) | $ 264.4 | $ 281.4 | $ (17.0) | (6.0) % | $ 775.1 | $ 819.0 | $ (43.9) | (5.4) % | |||||||
Adjusted net income(1) | $ 134.1 | $ 152.6 | $ (18.5) | (12.1) % | $ 379.8 | $ 435.7 | $ (55.9) | (12.8) % | |||||||
Adjusted diluted EPS(1) | $ 0.19 | $ 0.21 | $ (0.02) | (9.5) % | $ 0.52 | $ 0.59 | $ (0.07) | (11.9) % | |||||||
Adjusted weighted average ordinary shares, diluted(1) | 723.5 | 731.4 | (7.9) | (1.1) % | 726.1 | 733.6 | (7.5) | (1.0) % | |||||||
Net cash provided by operating activities | $ 202.9 | $ 163.4 | $ 39.5 | 24.2 % | $ 505.3 | $ 553.3 | $ (48.0) | (8.7) % | |||||||
Free cash flow(1) | $ 126.3 | $ 101.7 | $ 24.6 | 24.2 % | $ 298.4 | $ 374.7 | $ (76.3) | (20.4) % | |||||||
Third Quarter 2024 Commentary
Revenues for the third quarter decreased
Subscription revenues for the third quarter increased
Re-occurring revenues for the third quarter decreased
Transactional and other revenues for the third quarter decreased
Balance Sheet and Cash Flow
As of September 30, 2024, cash and cash equivalents of
The Company's total debt outstanding as of September 30, 2024 was
Net cash provided by operating activities of
Notes to press release |
(1) Non-GAAP measure. Please see "Reconciliations to Certain Non-GAAP Measures" in this release for important disclosures and reconciliations of these financial measures to the most directly comparable GAAP measure. These terms are defined elsewhere in this press release. |
N/M - Represents a change approximately equal or in excess of |
Conference Call and Webcast
Clarivate will host a conference call and webcast today to review the results for the third 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/495058600.
Interested parties may access the live audio broadcast.
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
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) | September 30, | December 31, | |
ASSETS | |||
Current assets: | |||
Cash and cash equivalents, including restricted cash | $ 388.5 | $ 370.7 | |
Accounts receivable, net | 771.8 | 908.3 | |
Prepaid expenses | 97.7 | 88.5 | |
Other current assets | 81.1 | 68.0 | |
Assets held for sale | — | 26.7 | |
Total current assets | 1,339.1 | 1,462.2 | |
Property and equipment, net | 47.3 | 51.6 | |
Other intangible assets, net | 8,726.7 | 9,006.6 | |
Goodwill | 1,736.8 | 2,023.7 | |
Other non-current assets | 71.8 | 60.8 | |
Deferred income taxes | 50.8 | 46.7 | |
Operating lease right-of-use assets | 58.1 | 55.2 | |
Total assets | $ 12,030.6 | $ 12,706.8 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 126.5 | $ 144.1 | |
Accrued compensation | 111.7 | 126.5 | |
Accrued expenses and other current liabilities | 375.1 | 315.2 | |
Current portion of deferred revenues | 890.2 | 983.1 | |
Current portion of operating lease liability | 22.1 | 24.4 | |
Liabilities held for sale | — | 6.7 | |
Total current liabilities | 1,525.6 | 1,600.0 | |
Long-term debt | 4,632.5 | 4,721.1 | |
Non-current portion of deferred revenues | 21.6 | 38.7 | |
Other non-current liabilities | 52.5 | 41.9 | |
Deferred income taxes | 227.0 | 249.6 | |
Operating lease liabilities | 57.9 | 63.2 | |
Total liabilities | 6,517.1 | 6,714.5 | |
Commitments and contingencies | |||
Shareholders' equity: | |||
Preferred Shares, no par value; 14.4 shares authorized; | — | 1,392.6 | |
Ordinary Shares, no par value; unlimited shares authorized; 710.3 and 666.1 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | 13,069.0 | 11,740.5 | |
Accumulated other comprehensive loss | (433.8) | (495.3) | |
Accumulated deficit | (7,121.7) | (6,645.5) | |
Total shareholders' equity | 5,513.5 | 5,992.3 | |
Total liabilities and shareholders' equity | $ 12,030.6 | $ 12,706.8 | |
Condensed Consolidated Statements of Operations (Unaudited) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(In millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |||
Revenues | $ 622.2 | $ 647.2 | $ 1,893.7 | $ 1,945.1 | |||
Operating expenses: | |||||||
Cost of revenues | 210.1 | 220.6 | 641.5 | 674.8 | |||
Selling, general and administrative costs | 169.7 | 171.9 | 546.8 | 559.3 | |||
Depreciation and amortization | 177.2 | 176.8 | 541.0 | 527.5 | |||
Goodwill and intangible asset impairments | 13.8 | — | 316.6 | 135.2 | |||
Restructuring and other impairments | 4.0 | 3.7 | 14.2 | 25.3 | |||
Other operating expense (income), net | 25.7 | (13.0) | 46.9 | (30.5) | |||
Total operating expenses | 600.5 | 560.0 | 2,107.0 | 1,891.6 | |||
Income (loss) from operations | 21.7 | 87.2 | (213.3) | 53.5 | |||
Fair value adjustment of warrants | — | (12.6) | (5.2) | (14.4) | |||
Interest expense, net | 72.2 | 71.9 | 213.5 | 218.5 | |||
Income (loss) before income taxes | (50.5) | 27.9 | (421.6) | (150.6) | |||
Provision (benefit) for income taxes | 15.1 | 15.6 | 23.3 | (83.3) | |||
Net income (loss) | (65.6) | 12.3 | (444.9) | (67.3) | |||
Dividends on preferred shares | — | 18.9 | 31.3 | 56.3 | |||
Net income (loss) attributable to ordinary shares | $ (65.6) | $ (6.6) | $ (476.2) | $ (123.6) | |||
Per share: | |||||||
Basic | $ (0.09) | $ (0.01) | $ (0.69) | $ (0.18) | |||
Diluted | $ (0.09) | $ (0.01) | $ (0.69) | $ (0.18) | |||
Weighted average shares used to compute earnings per share: | |||||||
Basic | 718.7 | 670.9 | 690.5 | 673.9 | |||
Diluted | 718.7 | 670.9 | 690.5 | 673.9 | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
Nine Months Ended September 30, | |||
(In millions) | 2024 | 2023 | |
Cash Flows From Operating Activities | |||
Net income (loss) | $ (444.9) | $ (67.3) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 541.0 | 527.5 | |
Share-based compensation | 48.9 | 97.1 | |
Restructuring and other impairments, including goodwill | 314.5 | 138.9 | |
Gain on legal settlement | — | (49.4) | |
Deferred income taxes | (28.8) | (51.3) | |
Amortization of debt issuance costs | 11.1 | 12.9 | |
Other operating activities | 36.1 | 2.4 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 148.2 | 110.3 | |
Prepaid expenses | (8.5) | (10.6) | |
Other assets | (9.8) | 19.5 | |
Accounts payable | (16.5) | (2.4) | |
Accrued expenses and other current liabilities | 22.1 | (33.8) | |
Deferred revenues | (102.3) | (56.9) | |
Operating leases, net | (7.8) | (6.2) | |
Other liabilities | 2.0 | (77.4) | |
Net cash provided by operating activities | 505.3 | 553.3 | |
Cash Flows From Investing Activities | |||
Capital expenditures | (206.9) | (178.6) | |
Payments for acquisitions, net of cash acquired | (32.0) | (2.3) | |
Proceeds from divestitures, net of cash divested | (19.2) | 10.5 | |
Net cash provided by (used for) investing activities | (258.1) | (170.4) | |
Cash Flows From Financing Activities | |||
Principal payments on term loans | (58.1) | (150.0) | |
Payment of debt issuance costs and discounts | (20.1) | 0.1 | |
Repurchases of ordinary shares | (100.0) | (100.0) | |
Cash dividends on preferred shares | (37.7) | (56.7) | |
Payments related to finance lease | (0.7) | (0.8) | |
Payments related to tax withholding for share-based compensation | (13.9) | (14.8) | |
Net cash provided by (used for) financing activities | (230.5) | (322.2) | |
Effects of exchange rates | 1.1 | (10.3) | |
Net change in cash and cash equivalents, including restricted cash | 17.8 | 50.4 | |
Cash and cash equivalents, including restricted cash, beginning of period | 370.7 | 356.8 | |
Cash and cash equivalents, including restricted cash, end of period | $ 388.5 | $ 407.2 | |
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
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 | Change | % of Change | ||||||||
(In millions, except percentages); (unaudited) | 2024 | 2023 | $ | % | Acquisitions | Disposals | FX | Organic | ||
Subscription revenues | $ 411.1 | $ 408.1 | $ 3.0 | 0.7 % | 0.2 % | — % | (0.1) % | 0.6 % | ||
Re-occurring revenues | 106.7 | 106.8 | (0.1) | (0.1) % | — % | — % | 1.0 % | (1.1) % | ||
Transactional and other revenues | 104.4 | 132.3 | (27.9) | (21.1) % | 0.5 % | (8.1) % | 0.1 % | (13.6) % | ||
Revenues | $ 622.2 | $ 647.2 | $ (25.0) | (3.9) % | 0.2 % | (1.6) % | 0.1 % | (2.6) % | ||
Nine Months Ended | Change | % of Change | ||||||||
(In millions, except percentages); (unaudited) | 2024 | 2023 | $ | % | Acquisitions | Disposals | FX | Organic | ||
Subscription revenues | $ 1,219.8 | $ 1,207.3 | $ 12.5 | 1.0 % | 0.1 % | — % | (0.3) % | 1.2 % | ||
Re-occurring revenues | 317.8 | 325.5 | (7.7) | (2.4) % | — % | — % | (0.1) % | (2.3) % | ||
Transactional and other revenues | 356.1 | 412.3 | (56.2) | (13.6) % | 0.2 % | (4.5) % | — % | (9.3) % | ||
Revenues | $ 1,893.7 | $ 1,945.1 | $ (51.4) | (2.6) % | 0.1 % | (1.0) % | (0.2) % | (1.5) % | ||
Three Months Ended | Change | % of Change | ||||||||
(In millions, except percentages); (unaudited) | 2024 | 2023 | $ | % | Acquisitions | Disposals | FX | Organic | ||
Academia & Government | $ 321.3 | $ 327.2 | $ (5.9) | (1.8) % | — % | — % | (0.1) % | (1.7) % | ||
Intellectual Property | 199.8 | 211.7 | (11.9) | (5.6) % | 0.1 % | (4.6) % | 0.7 % | (1.8) % | ||
Life Sciences & Healthcare | 101.1 | 108.3 | (7.2) | (6.6) % | 0.9 % | (0.7) % | (0.3) % | (6.5) % | ||
Revenues | $ 622.2 | $ 647.2 | $ (25.0) | (3.9) % | 0.2 % | (1.6) % | 0.1 % | (2.6) % | ||
Nine Months Ended | Change | % of Change | ||||||||
(In millions, except percentages); (unaudited) | 2024 | 2023 | $ | % | Acquisitions | Disposals | FX | Organic | ||
Academia & Government | $ 983.5 | $ 983.9 | $ (0.4) | — % | — % | — % | (0.1) % | 0.1 % | ||
Intellectual Property | 602.3 | 637.1 | (34.8) | (5.5) % | — % | (2.6) % | (0.2) % | (2.7) % | ||
Life Sciences & Healthcare | 307.9 | 324.1 | (16.2) | (5.0) % | 0.5 % | (0.6) % | (0.5) % | (4.4) % | ||
Revenues | $ 1,893.7 | $ 1,945.1 | $ (51.4) | (2.6) % | 0.1 % | (1.0) % | (0.2) % | (1.5) % | ||
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, restructuring expenses, impairments, the impact of certain non-cash fair value adjustments on financial instruments, 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 three and nine months ended September 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 | Nine Months Ended | ||||||
(In millions, except percentages); (unaudited) | 2024 | 2023 | 2024 | 2023 | |||
Net income (loss) | $ (65.6) | $ 12.3 | $ (444.9) | $ (67.3) | |||
Provision (benefit) for income taxes | 15.1 | 15.6 | 23.3 | (83.3) | |||
Depreciation and amortization | 177.2 | 176.8 | 541.0 | 527.5 | |||
Interest expense, net | 72.2 | 71.9 | 213.5 | 218.5 | |||
Transaction related costs | 6.1 | 2.7 | 13.6 | 5.1 | |||
Share-based compensation expense | 15.4 | 25.4 | 49.7 | 97.1 | |||
Goodwill and intangible asset impairments | 13.8 | — | 316.6 | 135.2 | |||
Restructuring and other impairments | 4.0 | 3.7 | 14.2 | 25.3 | |||
Fair value adjustment of warrants | — | (12.6) | (5.2) | (14.4) | |||
Other(1) | 26.2 | (14.4) | 53.3 | (24.7) | |||
Adjusted EBITDA | $ 264.4 | $ 281.4 | $ 775.1 | $ 819.0 | |||
Net income (loss) margin | (10.5) % | 1.9 % | (23.5) % | (3.5) % | |||
Adjusted EBITDA margin | 42.5 % | 43.5 % | 40.9 % | 42.1 % | |||
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance. For the nine months ended September 30, 2024, the amount includes a | |||||||
Adjusted net income and Adjusted diluted EPS
Adjusted net income represents Net income (loss), adjusted to exclude acquisition and/or disposal-related transaction costs, amortization related to acquired intangible assets, share-based compensation, restructuring expenses, impairments, the impact of certain non-cash fair value adjustments on financial instruments, 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 three and nine months ended September 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 September 30, | |||||||
2024 | 2023 | ||||||
(In millions, except per share amounts); (unaudited) | Amount | Per Share | Amount | Per Share | |||
Net income (loss) and EPS | $ (65.6) | $ (0.09) | $ 12.3 | $ 0.02 | |||
Transaction related costs | 6.1 | 0.01 | 2.7 | — | |||
Share-based compensation expense | 15.4 | 0.02 | 25.4 | 0.04 | |||
Amortization related to acquired intangible assets | 138.7 | 0.19 | 141.9 | 0.21 | |||
Goodwill and intangible asset impairments | 13.8 | 0.02 | — | — | |||
Restructuring and other impairments | 4.0 | 0.01 | 3.7 | 0.01 | |||
Fair value adjustment of warrants | — | — | (12.6) | (0.02) | |||
Other(1) | 26.2 | 0.04 | (14.4) | (0.04) | |||
Income tax impact of related adjustments | (4.5) | (0.01) | (6.4) | (0.01) | |||
Adjusted net income and Adjusted diluted EPS | $ 134.1 | $ 0.19 | $ 152.6 | $ 0.21 | |||
Adjusted weighted average ordinary shares, diluted | 723.5 | 731.4 | |||||
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance. |
Nine Months Ended September 30, | |||||||
2024 | 2023 | ||||||
(In millions, except per share amounts); (unaudited) | Amount | Per Share | Amount | Per Share | |||
Net income (loss) and EPS | $ (444.9) | $ (0.64) | $ (67.3) | $ (0.10) | |||
Transaction related costs | 13.6 | 0.02 | 5.1 | 0.01 | |||
Share-based compensation expense | 49.7 | 0.07 | 97.1 | 0.14 | |||
Amortization related to acquired intangible assets | 416.9 | 0.60 | 429.8 | 0.64 | |||
Goodwill and intangible asset impairments | 316.6 | 0.46 | 135.2 | 0.20 | |||
Restructuring and other impairments | 14.2 | 0.02 | 25.3 | 0.04 | |||
Fair value adjustment of warrants | (5.2) | (0.01) | (14.4) | (0.02) | |||
Other(1) | 53.3 | 0.05 | (24.7) | (0.10) | |||
Income tax impact of related adjustments | (34.4) | (0.05) | (150.4) | (0.22) | |||
Adjusted net income and Adjusted diluted EPS | $ 379.8 | $ 0.52 | $ 435.7 | $ 0.59 | |||
Adjusted weighted average ordinary shares, diluted | 726.1 | 733.6 | |||||
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance. For the nine months ended September 30, 2024, the amount includes a | |||||||
Free cash flow
Free cash flow represents Net cash provided by (used for) operating activities less Capital expenditures. The following table reconciles this non-GAAP measure to Net cash provided by operating activities:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(In millions); (unaudited) | 2024 | 2023 | 2024 | 2023 | |||
Net cash provided by operating activities | $ 202.9 | $ 163.4 | $ 505.3 | $ 553.3 | |||
Capital expenditures | (76.6) | (61.7) | (206.9) | (178.6) | |||
Free cash flow | $ 126.3 | $ 101.7 | $ 298.4 | $ 374.7 | |||
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SOURCE Clarivate Plc
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