0001764046false00-000000000017640462024-11-062024-11-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

November 6, 2024
Date of Report (date of earliest event reported)

CLARIVATE PLC
(Exact name of registrant as specified in its charter)
Jersey, Channel Islands
(State or other jurisdiction of incorporation or organization)
001-38911
(Commission File Number)
N/A
(I.R.S. Employer Identification No.)
70 St. Mary Axe
London
EC3A 8BE
United Kingdom
(Address of Principal Executive Offices)
(44) 207-433-4000
Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, no par valueCLVTNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐


Item 2.02.  Results of Operations and Financial Condition.

On November 6, 2024, Clarivate Plc (the “Company”) issued a press release announcing earnings for the third quarter ended September 30, 2024. The press release has been furnished with this Form 8-K as Exhibit 99.1 and is posted on the investor relations section of the Company’s website (http://ir.clarivate.com/).
The information in this Item 2.02, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as otherwise expressly stated in such filing.

Item 7.01. Regulation FD Disclosure.

On November 6, 2024, the Company posted to its website supplemental information related to revenue, earnings and guidance. The supplemental information has been furnished with this Current Report on Form 8-K as Exhibit 99.2 and is posted on the investor relations section of the Company’s website (http://ir.clarivate.com/).
The information in this Item 7.01, including Exhibit 99.2 furnished herewith, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section and shall not be incorporated by reference into any filing pursuant to the Securities Act or the Exchange Act, except as otherwise expressly stated in such filing.

Item 9.01.    Financial Statements and Exhibits
(d) Exhibits.
No.Description
99.1
99.2
104
The cover page from the Company's Current Report on Form 8-K dated November 6, 2024, formatted in Inline XBRL


SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 CLARIVATE PLC
 
Date: November 6, 2024
By: /s/ Jonathan M. Collins
 Name: Jonathan M. Collins
 
Executive Vice President & Chief Financial Officer
 


Clarivate Reports Third Quarter 2024 Results

London, UK -- November 6, 2024 Clarivate Plc (NYSE: CLVT) (the “Company” or “Clarivate”), a leading global provider of transformative intelligence, today reported results for the third quarter ended September 30, 2024.

Third Quarter 2024 Financial Highlights
•Revenues of $622.2 million decreased 3.9%
•Organic revenues decreased 2.6%, as an increase in subscription revenues of 0.6% was offset by a decrease in re-occurring revenues of 1.1% and transactional and other revenues of 13.6%
•Net loss of $65.6 million; Net loss per diluted share of $0.09
•Adjusted net income(1) of $134.1 million decreased 12.1%; Adjusted diluted EPS(1) of $0.19 decreased 9.5% or $0.02
•Adjusted EBITDA(1) of $264.4 million decreased 6.0%; Adjusted EBITDA margin(1) of 42.5% decreased 100 basis points primarily due to lower revenues
•Net cash provided by operating activities of $202.9 million increased $39.5 million; Free cash flow(1) of $126.3 million increased $24.6 million primarily due to the timing of working capital

Nine Months Ended September 30, 2024 Financial Highlights
•Revenues of $1,893.7 million decreased 2.6%
•Organic revenues decreased 1.5% as an increase in subscription revenues of 1.2% was offset by a decline in re-occurring revenues of 2.3% and transactional and other revenues of 9.3%
•Net loss of $444.9 million; Net loss per diluted share of $0.69
•Adjusted net income(1) of $379.8 million decreased 12.8%; Adjusted diluted EPS(1) of $0.52 decreased 11.9% or $0.07
•Adjusted EBITDA(1) of $775.1 million decreased 5.4%; Adjusted EBITDA margin(1) of 40.9% decreased 120 basis points primarily due to lower revenues
•Net cash provided by operating activities decreased $48.0 million to $505.3 million; Free cash flow(1) decreased $76.3 million to $298.4 million primarily due to lower operating income and increased capital expenditures

“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.
1

Selected Financial Information
Three Months Ended September 30,ChangeNine Months Ended September 30,Change
(in millions, except percentages and per share data), (unaudited)20242023 $%20242023$%
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 $25.0 million, or 3.9%, to $622.2 million, primarily due to the divestiture of Valipat in April 2024 and lower transactional sales across all three segments. Organic revenues decreased $16.5 million or 2.6%.
Subscription revenues for the third quarter increased $3.0 million, or 0.7%, to $411.1 million. Organic subscription revenues increased 0.6%, driven by price increases, partially offset by lower net volume in IP and LS&H.
Re-occurring revenues for the third quarter decreased $0.1 million, or 0.1%, to $106.7 million. Organic re-occurring revenues decreased 1.1%, primarily due to lower IP patent renewal volume.
Transactional and other revenues for the third quarter decreased $27.9 million, or 21.1%, to $104.4 million. Organic transactional and other revenues decreased 13.6%, due to lower sales across all three segments.
Balance Sheet and Cash Flow
As of September 30, 2024, cash and cash equivalents of $388.5 million increased $17.8 million compared to December 31, 2023.
The Company's total debt outstanding as of September 30, 2024 was $4,711.5 million, a decrease of $58.8 million compared to December 31, 2023, driven by an accelerated debt repayment.
Net cash provided by operating activities of $505.3 million for the nine months ended September 30, 2024 decreased $48.0 million compared to the prior year period, primarily due to lower operating results, partially offset by timing differences in working capital. Free cash flow(1) for the nine months ended September 30, 2024 was $298.4 million, a decrease of $76.3 million compared to the prior year period.




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 100% or not meaningful.


2

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. 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 5907538.

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.
3

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.
4

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)September 30, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents, including restricted cash$388.5 $370.7 
Accounts receivable, net771.8 908.3 
Prepaid expenses97.7 88.5 
Other current assets81.1 68.0 
Assets held for sale— 26.7 
Total current assets1,339.1 1,462.2 
Property and equipment, net47.3 51.6 
Other intangible assets, net8,726.7 9,006.6 
Goodwill1,736.8 2,023.7 
Other non-current assets71.8 60.8 
Deferred income taxes50.8 46.7 
Operating lease right-of-use assets58.1 55.2 
Total assets$12,030.6 $12,706.8 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$126.5 $144.1 
Accrued compensation111.7 126.5 
Accrued expenses and other current liabilities375.1 315.2 
Current portion of deferred revenues890.2 983.1 
Current portion of operating lease liability22.1 24.4 
Liabilities held for sale— 6.7 
Total current liabilities1,525.6 1,600.0 
Long-term debt4,632.5 4,721.1 
Non-current portion of deferred revenues21.6 38.7 
Other non-current liabilities52.5 41.9 
Deferred income taxes227.0 249.6 
Operating lease liabilities57.9 63.2 
Total liabilities6,517.1 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 September 30, 2024 and December 31, 2023, respectively— 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, respectively13,069.0 11,740.5 
Accumulated other comprehensive loss(433.8)(495.3)
Accumulated deficit(7,121.7)(6,645.5)
Total shareholders' equity5,513.5 5,992.3 
Total liabilities and shareholders' equity$12,030.6 $12,706.8 
5

Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
(In millions, except per share data)
2024202320242023
Revenues$622.2 $647.2 $1,893.7 $1,945.1 
Operating expenses:
Cost of revenues210.1 220.6 641.5 674.8 
Selling, general and administrative costs169.7 171.9 546.8 559.3 
Depreciation and amortization177.2 176.8 541.0 527.5 
Goodwill and intangible asset impairments13.8 — 316.6 135.2 
Restructuring and other impairments4.0 3.7 14.2 25.3 
Other operating expense (income), net25.7 (13.0)46.9 (30.5)
Total operating expenses600.5 560.0 2,107.0 1,891.6 
Income (loss) from operations21.7 87.2 (213.3)53.5 
Fair value adjustment of warrants— (12.6)(5.2)(14.4)
Interest expense, net72.2 71.9 213.5 218.5 
Income (loss) before income taxes(50.5)27.9 (421.6)(150.6)
Provision (benefit) for income taxes15.1 15.6 23.3 (83.3)
Net income (loss)(65.6)12.3 (444.9)(67.3)
Dividends on preferred shares— 18.9 31.3 56.3 
Net income (loss) attributable to ordinary shares$(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:
Basic718.7 670.9 690.5 673.9 
Diluted718.7 670.9 690.5 673.9 
6

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,
(In millions)
20242023
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 amortization541.0 527.5 
Share-based compensation48.9 97.1 
Restructuring and other impairments, including goodwill314.5 138.9 
Gain on legal settlement— (49.4)
Deferred income taxes(28.8)(51.3)
Amortization of debt issuance costs11.1 12.9 
Other operating activities36.1 2.4 
Changes in operating assets and liabilities:
Accounts receivable148.2 110.3 
Prepaid expenses(8.5)(10.6)
Other assets(9.8)19.5 
Accounts payable(16.5)(2.4)
Accrued expenses and other current liabilities22.1 (33.8)
Deferred revenues(102.3)(56.9)
Operating leases, net(7.8)(6.2)
Other liabilities2.0 (77.4)
Net cash provided by operating activities505.3 553.3 
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 rates1.1 (10.3)
Net change in cash and cash equivalents, including restricted cash17.8 50.4 
Cash and cash equivalents, including restricted cash, beginning of period370.7 356.8 
Cash and cash equivalents, including restricted cash, end of period
$388.5 $407.2 
7

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 $1,596.4 and $1,579.2 as of September 30, 2024 and 2023, respectively, which corresponds to an increase of 1.1%. The increase in ACV was primarily due to the impact of price increases, partially offset by volume declines.
The following tables present our revenues by type and by segment for the periods indicated, as well as the drivers of the variances between periods, including as a percentage of such revenues.
Three Months Ended September 30,Change
% of Change
(In millions, except percentages); (unaudited)
20242023$%Acquisitions
Disposals
FX
Organic
Subscription revenues$411.1 $408.1 $3.0 0.7 %0.2 %— %(0.1)%0.6 %
Re-occurring revenues106.7 106.8 (0.1)(0.1)%— %— %1.0 %(1.1)%
Transactional and other revenues104.4 132.3 (27.9)(21.1)%0.5 %(8.1)%0.1 %(13.6)%
Revenues$622.2 $647.2 $(25.0)(3.9)%0.2 %(1.6)%0.1 %(2.6)%
Nine Months Ended September 30,Change
% of Change
(In millions, except percentages); (unaudited)
20242023$%Acquisitions
Disposals
FX
Organic
Subscription revenues$1,219.8 $1,207.3 $12.5 1.0 %0.1 %— %(0.3)%1.2 %
Re-occurring revenues317.8 325.5 (7.7)(2.4)%— %— %(0.1)%(2.3)%
Transactional and other revenues356.1 412.3 (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 September 30,Change
% of Change
(In millions, except percentages); (unaudited)
20242023$%Acquisitions
Disposals
FX
Organic
Academia & Government$321.3 $327.2 $(5.9)(1.8)%— %— %(0.1)%(1.7)%
Intellectual Property199.8 211.7 (11.9)(5.6)%0.1 %(4.6)%0.7 %(1.8)%
Life Sciences & Healthcare101.1 108.3 (7.2)(6.6)%0.9 %(0.7)%(0.3)%(6.5)%
Revenues$622.2 $647.2 $(25.0)(3.9)%0.2 %(1.6)%0.1 %(2.6)%
Nine Months Ended September 30,Change
% of Change
(In millions, except percentages); (unaudited)
20242023$%Acquisitions
Disposals
FX
Organic
Academia & Government$983.5 $983.9 $(0.4)— %— %— %(0.1)%0.1 %
Intellectual Property602.3 637.1 (34.8)(5.5)%— %(2.6)%(0.2)%(2.7)%
Life Sciences & Healthcare307.9 324.1 (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)%







8

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 September 30,Nine Months Ended September 30,
(In millions, except percentages); (unaudited)
2024202320242023
Net income (loss)$(65.6)$12.3 $(444.9)$(67.3)
Provision (benefit) for income taxes15.1 15.6 23.3  (83.3)
Depreciation and amortization177.2 176.8 541.0  527.5 
Interest expense, net72.2 71.9 213.5  218.5 
Transaction related costs
6.1 2.7 13.6  5.1 
Share-based compensation expense15.4 25.4 49.7  97.1 
Goodwill and intangible asset impairments
13.8— 316.6 135.2 
Restructuring and other impairments
4.03.7 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 $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.

9

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,

20242023
(In millions, except per share amounts); (unaudited)
AmountPer ShareAmountPer 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 expense15.4 0.02 25.4 0.04 
Amortization related to acquired intangible assets138.7 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
723.5731.4
(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.
10

Nine Months Ended September 30,
20242023
(In millions, except per share amounts); (unaudited)
AmountPer ShareAmountPer 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 expense49.7 0.07 97.1 0.14 
Amortization related to acquired intangible assets416.9 0.60 429.8 0.64 
Goodwill and intangible asset impairments316.6 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
726.1733.6
(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 $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.

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)
2024202320242023
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 











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
11
Q3 2024 Earnings Call November 6, 2024

 
Safe Harbor Statement and Non-GAAP Financial Measures © 2024 Clarivate. All rights reserved. 2 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.

 
Safe Harbor Statement and Non-GAAP Financial Measures © 2024 Clarivate. All rights reserved. 3 Non-GAAP Financial Measures This presentation contains financial measures which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Free Cash Flow Conversion. Non-GAAP financial measures are not recognized terms under GAAP, 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 internally in our operational and financial decision-making, to assess the operating performance of our business, to assess performance for employee compensation purposes and to decide how to allocate resources. 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. 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. In the Appendix to this presentation, we provide definitions of these non-GAAP measures and reconciliations to the corresponding most directly comparable GAAP measures. Industry and Market Data The market data and other statistical information used throughout this presentation are based on industry publications and surveys, public filings, and various government sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. We have not independently verified such third-party information, nor have we ascertained the underlying economic assumptions relied upon in those sources, and we are unable to assure you of the accuracy or completeness of such information contained in this presentation. While we are not aware of any misstatements regarding our market, industry, or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors.

 
Agenda 4© 2024 Clarivate. All rights reserved. Business Review Financial Review Q&A Matti Shem Tov Chief Executive Officer Jonathan Collins Executive Vice President and Chief Financial Officer

 
Matti Shem Tov Chief Executive Officer Business Review

 
CEO’s Comprehensive Business Review © 2024 Clarivate. All rights reserved. 6 Strategy and Product Deep Dives Conducted deep dive sessions across all segments, covering market dynamics, product portfolios, AI strategy, key growth initiatives and financial performance Execution Assessment Assessed segment operations and GTM strategy covering organization structure, sales, product innovation, technology, talent and all shared service functions Colleagues and Customers Engaged with colleagues through a series of meet and greet sessions across multiple offices and conducted select customer engagements to strengthen insights 90 Day Activities Conducted Comprehensive Business Review Identified and Validated Key Strategic Priorities Developed Initial Business Value Creation Plan

 
Exceptional Foundation To Drive Long-Term Sustainable Growth © 2024 Clarivate. All rights reserved. 7 Scaled Information Services Provider Comprehensive, mission critical solutions across the innovation value chain  Market Leading Solutions Best-in-class data and SaaS workflow solutions, e.g. ProQuest One, Web of Science, Derwent, Cortellis, Alma, IPFolio Blue Chip Customer Base Thousands of customers, including leading academic institutions, top pharmaceutical companies and top-tier corporates and law firms  Highly Talented Team Global and diverse team with strong expertise across segments and disciplines 

 
Meaningful Opportunity To Renew Focus and Improve Business Performance © 2024 Clarivate. All rights reserved. 8 Declining and Volatile Transactional Revenue Opportunity to rationalize solutions with declining revenue and negligible cash flow Sub Optimal Go-To-Market Motion Opportunity to excel sales execution and commercial models Insufficient Pace of Product Execution Opportunity to increase ROI on existing product development spend Certain Non-Core Legacy Solutions Opportunity to drive greater focus across flagship solutions     Near term challenges have impacted ability to execute effectively

 
Value Creation Plan To Drive Focus, Growth and Innovation Product & AI Accelerated Innovation Invest in proprietary assets and drive development velocity through customer collaboration Optimize ROI and Support Sales Execution Sales Improved Sales Execution Drive sales execution, customer engagement and retention Increase Organic Growth and Achieve Targets Revenue Business Model Optimization Focus on driving core subscription and re-occurring revenue improving predictability Increase Subscription and Reoccurring Revenue Mix Portfolio Solutions Rationalization Streamline solutions portfolio to increase execution focus and optimize capital allocation Improve Financial Performance 9© 2024 Clarivate. All rights reserved. Value Creation Enablers Talent and Culture Cost Rationalization Enterprise Technology

 
Jonathan Collins Chief Financial Officer Financial Review

 
Q3 and YTD 2024 Financial Results 11 Changes from Prior Year $m except per share data Q3 ‘24 Q3 ‘23 Change YTD ‘24 YTD ‘23 Change Revenues $622 $647 $(25) $1,894 $1,945 $(51) Income / (Loss) from Operations 22 87 (65) (213) 54 (267) Fair Value Adjustment of Warrants (Gain) / Loss - (13) 13 (5) (14) 9 Interest Expense, Net 72 72 - 214 219 (5) Income Tax Expense (Benefit) 15 16 (1) 23 (83) 106 Net Income / (Loss) to Ordinary Shares $(66) $(7) $(59) $(476) $(124) $(352) Net Income / (Loss) Per Share, basic $(0.09) $(0.01) $(0.08) $(0.69) $(0.18) $(0.51) Adjusted EBITDA1 264 281 (17) 775 819 (44) Adjusted EBITDA Margin1 42.5% 43.5% (100 bps) 40.9% 42.1% (120 bps) Adjusted Diluted EPS1 $0.19 $0.21 $(0.02) $0.52 $0.59 $(0.07) Operating Cash Flow $203 $163 $40 $505 $553 $(48) Capital Spending 77 62 15 207 179 28 Free Cash Flow1 126 102 24 298 375 (77) Revenues • Q3 decline due to transactional revenue and impact of the Valipat divestiture in April Net Income • Q3 decrease due to goodwill impairment of ($14)m and net Fx impact of ($40)m on weaker USD Operating Cash Flow • Q3 improvement as most of H1 working capital use unwound 1 See the Appendix for a reconciliation of GAAP to Non-GAAP measures. Amounts in table may not sum due to rounding. © 2024 Clarivate. All rights reserved.

 
Changes from Prior Year Q3 2024 Revenues and Adj. EBITDA1 12 Organic • Transactional revenue decline of 14% caused 2.6% total decline • Revenue decline partially offset by lower operating expenses Inorganic • Valipat divestiture net of nominal revenue contributions from Motion Hall, Global Q, and Rowan Foreign Exchange • Nominal impact as USD weakened sequentially Revenues Adj. EBITDA1 Year + Better - Worse $ millions Q3 2023 Organic Inorganic FX Q3 2024 $647 ($17) ($9) $622 $281 43.5% $264 42.5% ($11) ($6) $0 $1 © 2024 Clarivate. All rights reserved.1 See the Appendix for a reconciliation of GAAP to Non-GAAP measures. Amounts in table may not sum due to rounding.

 
Changes from Prior Year YTD 2024 Revenues and Adj. EBITDA1 13 Organic • ACV / subs revenue growth at 1% • Transactional revenue decline of 9% caused 1.5% total decline • Revenue flowed through to EBITDA on essentially flat operating expenses as cost inflation were offset by efficiencies Inorganic • Valipat divestiture net of nominal revenue contributions from Motion Hall, Global Q, and Rowan Foreign Exchange • USD slightly stronger than basket of foreign currencies Revenues Adj. EBITDA1 Year + Better - Worse $ millions $1,945 ($30) ($17) $1,894 $819 42.1% $775 40.9% ($31) ($10) ($3) ($4) © 2024 Clarivate. All rights reserved.1 See the Appendix for a reconciliation of GAAP to Non-GAAP measures. Amounts in table may not sum due to rounding. YTD 2023 Organic Inorganic FX YTD 2024

 
Q3 and YTD 2024 Cash Flow 14 Changes from Prior Year Free Cash Flow1 • Q3 growth driven by working capital / other improvement from H1 decline Capital Allocation • Utilized majority of FCF to repurchase $100m of shares in Q3 $m Q3 ‘24 Q3 ‘23 Change YTD ‘24 YTD ‘23 Change Adj. EBITDA1 $264 $281 $(17) $775 $819 $(44) One-Time Costs (8) (7) (1) (33) (54) 21 Interest (41) (40) (1) (173) (177) 4 Taxes (11) (7) (4) (35) (29) (6) Working Capital / Other (1) (64) 63 (29) (6) (23) Operating Cash Flow 203 163 40 505 553 (48) Capital Spending (77) (62) (15) (207) (179) (28) Free Cash Flow1 $126 $102 $24 $298 $375 $(77) Conversion 48% 36% 12% 39% 46% (7%) Preferred Dividend - (19) 19 (38) (57) 19 Share Repurchase (100) (100) - (100) (100) - Debt Repayment (5) - (5) (58) (150) 92 M&A (15) (1) (14) (51) 8 (59) Other2 6 (18) 24 (33) (26) (7) Cash Flow $12 $(36) $48 $18 $50 $(32) © 2024 Clarivate. All rights reserved. 1 See the Appendix for a reconciliation of GAAP to Non-GAAP measures. ² Fx, Tax withholding for share-based comp and refinancing cost. Amounts in table may not sum due to rounding.

 
Q&A Session

 
© 2024 Clarivate Clarivate and its logo, as well as all other trademarks used herein are trademarks of their respective owners and used under license. 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

 
Appendix Presentation of Certain Non-GAAP Financial Measures

 
18© 2024 Clarivate. All rights reserved. Presentation of Certain Non-GAAP Financial 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. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues. Net income (loss) margin is calculated by dividing Net income (loss) by Revenues. 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. Free cash flow and Free cash flow conversion Free cash flow represents Net cash provided by (used for) operating activities less capital expenditures. Free cash flow conversion is calculated by dividing Free cash flow by Adjusted EBITDA. Operating cash flow conversion is calculated by dividing Net cash provided by (used for) operating activities by Net income (loss).

 
Reconciliation of Non-GAAP Financial Measures 19 Net income (loss) to Adjusted EBITDA and Adjusted EBITDA margin $m Q3 ‘24 Q3 ‘23 YTD ’24 YTD ’23 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) Other1 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% © 2024 Clarivate. All rights reserved. Descriptions 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 $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.

 
Reconciliation of Non-GAAP Financial Measures 20 Net income (loss) and Net income (loss) per share to Adjusted net income and Adjusted diluted EPS Q3 ‘24 Q3 ‘23 YTD ‘24 YTD ‘23 $m except per share data Amount Per Share Amount Per Share Amount Per Share Amount Per Share Net income (loss) and EPS $(65.6) $(0.09) $12.3 $0.02 $(444.9) $(0.64) $(67.3) $(0.10) Transaction related costs 6.1 0.01 2.7 — 13.6 0.02 5.1 0.01 Share-based compensation expense 15.4 0.02 25.4 0.04 49.7 0.07 97.1 0.14 Amortization related to acquired intangible assets 138.7 0.19 141.9 0.21 416.9 0.60 429.8 0.64 Goodwill and intangible asset impairments 13.8 0.02 — — 316.6 0.46 135.2 0.20 Restructuring and other impairments 4.0 0.01 3.7 0.01 14.2 0.02 25.3 0.04 Fair value adjustment of warrants — — (12.6) (0.02) (5.2) (0.01) (14.4) (0.02) Other1 26.2 0.04 (14.4) (0.04) 53.3 0.05 (24.7) (0.10) Income tax impact of related adjustments (4.5) (0.01) (6.4) (0.01) (34.4) (0.05) (150.4) (0.22) Adjusted net income and Adjusted diluted EPS $134.1 $0.19 $152.6 $0.21 $379.8 $0.52 $435.7 $0.59 Adjusted weighted average shares, diluted 723.5 731.4 726.1 733.6 © 2024 Clarivate. All rights reserved. Descriptions 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 $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.

 
Reconciliation of Non-GAAP Financial Measures 21 Net cash provided by operating activities to Free cash flow and Free cash flow conversion $m Q3 ‘24 Q3 ‘23 YTD ’24 YTD ’23 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 Operating cash flow conversion (309.3)% 1,328.5% (113.6)% (822.1)% Free cash flow conversion 47.8% 36.1% 38.5% 45.8% © 2024 Clarivate. All rights reserved.

 
v3.24.3
Document and Entity Information Document
Nov. 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 06, 2024
Entity Registrant Name CLARIVATE PLC
Entity Incorporation, State or Country Code Y9
Entity File Number 001-38911
Entity Tax Identification Number 00-0000000
Entity Address, Address Line One 70 St. Mary Axe
Entity Address, City or Town London
Entity Address, Postal Zip Code EC3A 8BE
Entity Address, Country GB
City Area Code 44
Local Phone Number 207-433-4000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Ordinary Shares, no par value
Trading Symbol CLVT
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001764046
Amendment Flag false
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