— Reaffirms 2024 Outlook —
LONDON, May 8, 2024 /PRNewswire/ -- Clarivate Plc
(NYSE: CLVT) (the "Company" or "Clarivate"), a leading global
provider of transformative intelligence, today reported results for
the first quarter ended March 31,
2024.
First Quarter 2024 Financial Highlights
- Revenues of $621.2 million
decreased 1.3%
- Organic revenues decreased 1.7%, as an increase in subscription
revenues of 2.4% was more than offset by a decrease in
transactional and other revenues of 11.4% and re-occurring revenues
of 5.1%
- Net loss attributable to ordinary shares of $93.8 million; Net loss per diluted share of
$0.14
- Adjusted net income(1) of $103.5 million decreased 20.9%; Adjusted diluted
EPS(1) of $0.14 decreased
22.2% or $0.04
- Adjusted EBITDA(1) of $236.3
million decreased 6.5%; Adjusted EBITDA margin(1)
of 38.0% decreased 220 basis points primarily due to lower
revenues
- Net cash provided by operating activities of $176.2 million decreased $51.3 million; Free cash flow(1) of
$111.8 million decreased $56.4 million primarily due to the timing of
working capital
"We are making great progress this year on key objectives
including product investments and operational initiatives to drive
future organic revenue growth," said Jonathan Gear, Chief Executive Officer. "Our
Intellectual Property segment refined its go-to-market operating
model and revived patent intelligence solutions, which is resulting
in commercial success across our software solutions, particularly
IPFolio, and improved Derwent renewal rates. We released a new
real-world data framework in the Life Sciences & Healthcare
segment and were awarded deals with two top-10 global
pharmaceutical clients. Additionally, we recently acquired two
startup companies, MotionHall and Global QMS, Inc. which will
enhance our portfolio and expertise in the LS&H segment. We
continue to make the necessary improvements to revitalize Clarivate
and drive enhanced value for clients, colleagues, and
shareholders."
Selected Financial Information
|
Three Months
Ended
March 31,
|
|
Change
|
(In millions, except
percentages and per share data), (unaudited)
|
2024
|
|
2023
|
|
$
|
|
%
|
Revenues
|
$ 621.2
|
|
$ 629.1
|
|
$
(7.9)
|
|
(1.3) %
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ordinary shares
|
$ (93.8)
|
|
$ 24.7
|
|
$
(118.5)
|
|
N/M
|
Net income (loss) per
share, diluted
|
$ (0.14)
|
|
$ 0.04
|
|
$ (0.18)
|
|
N/M
|
Weighted-average
ordinary shares (diluted)
|
666.9
|
|
679.3
|
|
(12.4)
|
|
(1.8) %
|
Adjusted
EBITDA(1)
|
$ 236.3
|
|
$ 252.7
|
|
$ (16.4)
|
|
(6.5) %
|
|
|
|
|
|
|
|
|
Adjusted net
income(1)
|
$ 103.5
|
|
$ 130.9
|
|
$ (27.4)
|
|
(20.9) %
|
Adjusted diluted
EPS(1)(2)
|
$
0.14
|
|
$ 0.18
|
|
$ (0.04)
|
|
(22.2) %
|
Adjusted
weighted-average ordinary shares (diluted)(1)
|
727.6
|
|
734.7
|
|
(7.0)
|
|
(1.0) %
|
Net cash provided by
operating activities
|
$ 176.2
|
|
$ 227.5
|
|
$ (51.3)
|
|
(22.5) %
|
Free cash
flow(1)
|
$ 111.8
|
|
$ 168.2
|
|
$ (56.4)
|
|
(33.5) %
|
First Quarter 2024 Commentary
Revenues for the first quarter decreased $7.9 million, or 1.3%, to $621.2 million. Organic revenues decreased
$10.5 million or 1.7%.
Subscription revenues for the first quarter increased
$9.9 million, or 2.5%, to
$403.1 million. Organic subscription
revenues increased 2.4%, driven by price increases.
Re-occurring revenues for the first quarter decreased
$5.2 million, or 4.8%, to
$102.5 million. Organic re-occurring
revenues decreased 5.1%, primarily due to lower IP patent renewal
volumes.
Transactional and other revenues for the first quarter decreased
$12.6 million, or 9.8%, to
$115.6 million. Organic transactional
and other revenues decreased 11.4%, due to lower A&G volumes
and LS&H real world data sales.
Balance Sheet and Cash Flow
As of March 31, 2024, cash and
cash equivalents of $361.8 million
decreased $8.9 million compared to
December 31, 2023.
The Company's total debt outstanding as of March 31, 2024 was $4,722.6 million, a decrease of $47.7 million compared to December 31, 2023, driven by an accelerated debt
repayment.
Net cash provided by operating activities of $176.2 million for the three months ended
March 31, 2024 decreased $51.3 million compared to $227.5 million for the prior year period,
primarily due to timing differences in working capital. Free cash
flow(1) for the three months ended March 31, 2024, was $111.8
million, a decrease of $56.4
million compared to the prior year period.
Reaffirmed Outlook for 2024 (forward-looking
statement)
"With first quarter results in line with our expectations, we
reaffirm our 2024 full year outlook," said Jonathan Collins, Executive Vice President and
Chief Financial Officer. "Currently, we anticipate a sequential
improvement in organic revenue growth in the second quarter
compared to the first quarter. For the full year, we continue to
expect to deliver improved growth across our three segments driven
by the benefit of product investments and modestly improving market
conditions."
The full year outlook presented below assumes no further
acquisitions, divestitures, or unanticipated events.
|
2024
Outlook
|
Revenues
|
$2.57B
to $2.67B
|
Organic revenue
growth
|
0% to 2%
|
Adjusted
EBITDA(1)
|
$1.055B
to $1.115B
|
Adjusted EBITDA
margin(1)
|
41% to 42%
|
Adjusted diluted
EPS(1)(2)
|
$0.70
to $0.80
|
Free cash
flow(1)
|
$420M
to $500M
|
Notes to earnings press release
(1) Non-GAAP measure. Please see "Reconciliations to
Certain Non-GAAP Measures" in this earnings release for important
disclosures and reconciliations of these financial measures to the
most directly comparable GAAP measure. These terms are defined
elsewhere in this earnings release.
(2) Adjusted diluted EPS for 2024 is calculated based on
approximately 730 million fully diluted weighted average ordinary
shares outstanding.
N/M - Represents a change approximately equal or in excess of 100%
or not meaningful.
Conference Call and Webcast
Clarivate will host a conference call and webcast today to
review the results for the first quarter at 9:00 a.m. Eastern Time. The webcast is open to
all interested parties and may include forward-looking
information.
The live webcast of the earnings call will be accessible through
the investor relations section of the Company's website. To join
the webcast please visit
https://events.q4inc.com/attendee/319586540.
Interested parties may access the live audio broadcast by
dialing +1 404-975-4839 or toll-free +1 833-470-1428 (in
North America) and +44 208 068
2558 or toll free +44 808 189 6484 (internationally). The
conference ID number is 143104.
A replay of the webcast will also be available on
https://ir.clarivate.com beginning two hours after the conclusion
of the live call, and will remain available for one year.
Use of Non-GAAP Financial Measures
Non-GAAP results are financial measures that are not prepared in
accordance with U.S. generally accepted accounting principles
("GAAP") and are presented only as a supplement to our financial
statements based on GAAP. Non-GAAP financial information is
provided to enhance the reader's understanding of our financial
performance, but none of these non-GAAP financial measures are
recognized terms under GAAP. They are not measures of financial
condition or liquidity, and should not be considered as an
alternative to profit or loss for the period determined in
accordance with GAAP or operating cash flows determined in
accordance with GAAP. As a result, you should not consider such
measures in isolation from, or as a substitute for, financial
measures or results of operations calculated or determined in
accordance with GAAP.
We use non-GAAP measures in our operational and financial
decision-making. We believe that such measures allow us to focus on
what we deem to be a more reliable indicator of ongoing operating
performance and our ability to generate cash flow from operations,
and we also believe that investors may find these non-GAAP
financial measures useful for the same reasons. Non-GAAP measures
are frequently used by securities analysts, investors, and other
interested parties in their evaluation of companies comparable to
us, many of which present non-GAAP measures when reporting their
results. These measures can be useful in evaluating our performance
against our peer companies because we believe the measures provide
users with valuable insight into key components of GAAP financial
disclosures. However, non-GAAP measures have limitations as
analytical tools and because not all companies use identical
calculations, our presentation of non-GAAP financial measures may
not be comparable to other similarly titled measures of other
companies.
Definitions and reconciliations of non-GAAP measures, such as
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income,
Adjusted diluted EPS, and Free cash flow to the most directly
comparable GAAP measures are provided within the schedules attached
to this release. Our presentation of non-GAAP measures should not
be construed as an inference that our future results will be
unaffected by any of the adjusted items, or that any projections
and estimates will be realized in their entirety or at all.
Forward-Looking Statements
This communication includes statements that express our
opinions, expectations, beliefs, plans, objectives, assumptions, or
projections regarding future events or future results and therefore
are, or may be deemed to be, "forward-looking statements" within
the meaning of the "safe harbor provisions" of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified by the use of
forward-looking terminology, including the terms "believes,"
"estimates," "anticipates," "expects," "seeks," "projects,"
"intends," "plans," "may," "will," or "should" or, in each case,
their negative or other variations or comparable terminology. These
forward-looking statements include all matters that are not
historical facts, and include statements regarding our intentions,
beliefs, or current expectations concerning, among other things,
anticipated cost savings, results of operations, financial
condition, liquidity, prospects, growth, strategies, and the
markets in which we operate. Such forward-looking statements are
based on available current market material and management's
expectations, beliefs, and forecasts concerning future events
impacting us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These
forward-looking statements involve a number of risks and
uncertainties (some of which are beyond our control) or other
assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described in Item 1A. Risk
Factors of our annual report on Form 10-K. Should one or more
of these risks or uncertainties materialize, or should any of the
assumptions prove incorrect, actual results may vary in material
respects from those projected in these forward-looking statements.
We do not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws. Please consult our public filings with
the SEC or on our website at www.clarivate.com.
About Clarivate
Clarivate™ is a leading global provider of transformative
intelligence. We offer enriched data, insights & analytics,
workflow solutions and expert services in the areas of Academia
& Government, Intellectual Property and Life Sciences &
Healthcare. For more information, please visit
www.clarivate.com.
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(In
millions)
|
March 31,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents, including restricted cash
|
$
361.8
|
|
$
370.7
|
Accounts receivable,
net
|
822.9
|
|
908.3
|
Prepaid
expenses
|
100.0
|
|
88.5
|
Other current
assets
|
67.9
|
|
68.0
|
Assets held for
sale
|
38.2
|
|
26.7
|
Total current
assets
|
1,390.8
|
|
1,462.2
|
Property and equipment,
net
|
49.2
|
|
51.6
|
Other intangible
assets, net
|
8,874.2
|
|
9,006.6
|
Goodwill
|
2,023.4
|
|
2,023.7
|
Other non-current
assets
|
68.5
|
|
60.8
|
Deferred income
taxes
|
46.6
|
|
46.7
|
Operating lease
right-of-use assets
|
52.0
|
|
55.2
|
Total
assets
|
$
12,504.7
|
|
$
12,706.8
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
102.7
|
|
$
144.1
|
Accrued
compensation
|
85.8
|
|
126.5
|
Accrued expenses and
other current liabilities
|
365.1
|
|
315.2
|
Current portion of
deferred revenues
|
1,010.1
|
|
983.1
|
Current portion of
operating lease liability
|
24.3
|
|
24.4
|
Liabilities held for
sale
|
26.8
|
|
6.7
|
Total current
liabilities
|
1,614.8
|
|
1,600.0
|
Long-term
debt
|
4,637.9
|
|
4,721.1
|
Non-current portion of
deferred revenues
|
17.7
|
|
38.7
|
Other non-current
liabilities
|
41.7
|
|
41.9
|
Deferred income
taxes
|
246.2
|
|
249.6
|
Operating lease
liabilities
|
58.0
|
|
63.2
|
Total
liabilities
|
6,616.3
|
|
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, 14.4 shares issued and outstanding as
of both March 31, 2024 and December 31, 2023
|
1,392.6
|
|
1,392.6
|
Ordinary Shares, no par
value; unlimited shares authorized; 668.2(1) and 666.1
shares issued and outstanding as of March 31, 2024 and December 31,
2023, respectively
|
11,747.4
|
|
11,740.5
|
Accumulated other
comprehensive loss
|
(512.3)
|
|
(495.3)
|
Accumulated
deficit
|
(6,739.3)
|
|
(6,645.5)
|
Total shareholders'
equity
|
5,888.4
|
|
5,992.3
|
Total liabilities
and shareholders' equity
|
$
12,504.7
|
|
$
12,706.8
|
(1)
Refer to the Condensed Consolidated
Statements of Changes in Equity within the 10-Q.
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
Three Months Ended
March 31,
|
(In millions, except
per share data)
|
2024
|
|
2023
|
Revenues
|
$
621.2
|
|
$
629.1
|
Operating
expenses:
|
|
|
|
Cost of
revenues
|
217.8
|
|
229.7
|
Selling, general and
administrative costs
|
191.9
|
|
194.8
|
Depreciation and
amortization
|
179.4
|
|
172.6
|
Restructuring
|
9.5
|
|
9.4
|
Other operating
expense (income), net
|
17.6
|
|
(32.0)
|
Total operating
expenses
|
616.2
|
|
574.5
|
Income (loss) from
operations
|
5.0
|
|
54.6
|
Fair value adjustment
of warrants
|
(5.2)
|
|
1.1
|
Interest expense,
net
|
70.2
|
|
73.6
|
Income (loss) before
income taxes
|
(60.0)
|
|
(20.1)
|
Provision (benefit) for
income taxes
|
15.0
|
|
(63.6)
|
Net income
(loss)
|
(75.0)
|
|
43.5
|
Dividends on preferred
shares
|
18.8
|
|
18.8
|
Net income (loss)
attributable to ordinary shares
|
$
(93.8)
|
|
$
24.7
|
|
|
|
|
Per share:
|
|
|
|
Basic
|
$
(0.14)
|
|
$
0.04
|
Diluted
|
$
(0.14)
|
|
$
0.04
|
|
|
|
|
Weighted average shares
used to compute earnings per share:
|
|
|
|
Basic
|
666.9
|
|
674.8
|
Diluted
|
666.9
|
|
679.3
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Three Months Ended
March 31,
|
(In
millions)
|
2024
|
|
2023
|
Cash Flows From
Operating Activities
|
|
|
|
Net income
(loss)
|
$
(75.0)
|
|
$
43.5
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
179.4
|
|
172.6
|
Share-based
compensation
|
14.9
|
|
40.7
|
Gain on legal
settlement
|
—
|
|
(49.4)
|
Amortization of debt
issuance costs
|
4.7
|
|
5.1
|
Other operating
activities
|
10.1
|
|
9.7
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
74.8
|
|
42.3
|
Prepaid
expenses
|
(11.8)
|
|
(21.7)
|
Other
assets
|
(3.0)
|
|
13.7
|
Accounts
payable
|
(37.3)
|
|
(0.1)
|
Accrued expenses and
other current liabilities
|
(10.0)
|
|
(33.0)
|
Deferred
revenues
|
31.0
|
|
85.5
|
Operating leases,
net
|
(1.8)
|
|
(2.0)
|
Other
liabilities
|
0.2
|
|
(79.4)
|
Net cash provided by
operating activities
|
176.2
|
|
227.5
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(64.4)
|
|
(59.3)
|
Payments for
acquisitions
|
—
|
|
(1.1)
|
Net cash provided by
(used for) investing activities
|
(64.4)
|
|
(60.4)
|
Cash Flows From
Financing Activities
|
|
|
|
Principal payments on
term loan
|
(47.4)
|
|
(125.0)
|
Payment of debt
issuance costs and discounts
|
(20.0)
|
|
—
|
Cash dividends on
preferred shares
|
(18.9)
|
|
(18.9)
|
Payments related to
finance lease
|
(0.3)
|
|
(0.2)
|
Payments related to
tax withholding for stock-based compensation
|
(8.6)
|
|
(7.5)
|
Net cash provided by
(used for) financing activities
|
(95.2)
|
|
(151.6)
|
Effects of exchange
rates
|
(6.3)
|
|
2.0
|
Net change in cash and
cash equivalents, including restricted cash
|
$
10.3
|
|
$
17.5
|
Cash and cash
equivalents, including restricted cash, beginning of
period
|
370.7
|
|
356.8
|
Cash and cash
equivalents, including restricted cash, end of
period(1)
|
$
381.0
|
|
$
374.3
|
(1)
Includes $19.2 of cash that was
reclassified to current assets held for sale in the Condensed
Consolidated Balance Sheet as of March 31, 2024.
|
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 $1,583.3 and $1,555.2 as of March 31,
2024 and 2023, respectively, which corresponds to an
increase of 1.8%. The increase in ACV was primarily due to the
impact of price increases.
The following tables present our revenues by type and by segment
for the periods indicated, as well as the drivers of the variances
between periods, including as a percentage of such revenues.
|
Three Months
Ended
March 31,
|
|
Change
|
|
Percentage of
Change
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
Subscription
revenues
|
$
403.1
|
|
$ 393.2
|
|
$
9.9
|
2.5 %
|
|
0.1 %
|
— %
|
— %
|
2.4 %
|
Re-occurring
revenues
|
102.5
|
|
107.7
|
|
(5.2)
|
(4.8) %
|
|
— %
|
— %
|
0.3 %
|
(5.1) %
|
Transactional and other
revenues
|
115.6
|
|
128.2
|
|
(12.6)
|
(9.8) %
|
|
0.1 %
|
0.9 %
|
0.6 %
|
(11.4) %
|
Revenues
|
$
621.2
|
|
$ 629.1
|
|
$
(7.9)
|
(1.3) %
|
|
— %
|
0.2 %
|
0.2 %
|
(1.7) %
|
|
|
|
Three Months
Ended
March 31,
|
|
Change
|
|
Percentage of
Change
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
Academia &
Government
|
$
317.7
|
|
$ 314.7
|
|
$
3.0
|
1.0 %
|
|
— %
|
— %
|
0.4 %
|
0.6 %
|
Intellectual
Property
|
200.9
|
|
209.1
|
|
(8.2)
|
(3.9) %
|
|
— %
|
0.5 %
|
0.1 %
|
(4.5) %
|
Life Sciences &
Healthcare
|
102.6
|
|
105.3
|
|
(2.7)
|
(2.6) %
|
|
0.3 %
|
— %
|
(0.1) %
|
(2.8) %
|
Revenues
|
$
621.2
|
|
$ 629.1
|
|
$
(7.9)
|
(1.3) %
|
|
— %
|
0.2 %
|
0.2 %
|
(1.7) %
|
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, mandatory convertible preferred share ("MCPS")
dividend expense, unrealized foreign currency gains/losses,
restructuring expenses, non-operating income and/or expense, the
impact of certain non-cash fair value adjustments on financial
instruments, legal settlements, impairments, and other items that
are included in Net income (loss) for the period that we do not
consider indicative of our ongoing operating performance. 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 months ended March 31, 2024 and 2023 and reconciles these
non-GAAP measures to our Net income (loss) for the same
periods:
|
Three Months Ended
March 31,
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
Net income (loss)
attributable to ordinary shares
|
$
(93.8)
|
|
$
24.7
|
Dividends on preferred
shares
|
18.8
|
|
18.8
|
Net income
(loss)
|
(75.0)
|
|
43.5
|
Provision (benefit) for
income taxes
|
15.0
|
|
(63.6)
|
Depreciation and
amortization
|
179.4
|
|
172.6
|
Interest expense,
net
|
70.2
|
|
73.6
|
Transaction related
costs
|
4.4
|
|
1.7
|
Share-based
compensation expense
|
15.4
|
|
41.2
|
Restructuring
|
9.5
|
|
9.4
|
Fair value adjustment
of warrants
|
(5.2)
|
|
1.1
|
Other(1)
|
22.6
|
|
(26.8)
|
Adjusted
EBITDA
|
$
236.3
|
|
$
252.7
|
Adjusted EBITDA
margin
|
38.0 %
|
|
40.2 %
|
|
(1)
Primarily reflects the net impact of
foreign exchange gains and losses related to the remeasurement of
balances and other items that do not reflect our ongoing operating
performance. The three months ended March 31, 2024 also includes a
$15.8 loss on a small divestiture. The three months ended March 31,
2023 also includes a $49.4 gain on legal settlement.
|
Adjusted net income and Adjusted diluted EPS
Adjusted net income is calculated using Net income (loss),
adjusted to exclude acquisition and/or disposal-related transaction
costs (such costs include net income from continuing operations
before the provision for income taxes, depreciation and
amortization, and interest income and expense from the divested
business), amortization related to acquired intangible assets,
share-based compensation, MCPS dividend expense, unrealized foreign
currency gains/losses, restructuring expenses, the impact of
certain non-cash fair value adjustments on financial instruments,
legal settlements, impairments, and other items that are included
in net income (loss) for the period that we do not consider
indicative of our ongoing operating performance and the income tax
impact of any adjustments.
Adjusted diluted EPS is calculated by dividing Adjusted net
income by Adjusted diluted weighted average shares for the period.
The Adjusted diluted weighted average shares assumes that all
instruments in the calculation are dilutive.
The following table presents our calculation of Adjusted net
income and Adjusted diluted EPS for the three months ended
March 31, 2024 and 2023 and
reconciles these non-GAAP measures to our Net income (loss) and
diluted EPS for the same periods:
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
(In millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net income (loss)
attributable to ordinary shares
|
(93.8)
|
|
(0.14)
|
|
24.7
|
|
0.04
|
Dividends on preferred
shares
|
18.8
|
|
0.03
|
|
18.8
|
|
0.03
|
Net income (loss) and
EPS
|
(75.0)
|
|
(0.11)
|
|
43.5
|
|
0.06
|
Transaction related
costs
|
4.4
|
|
0.01
|
|
1.7
|
|
—
|
Share-based
compensation expense
|
15.4
|
|
0.02
|
|
41.2
|
|
0.06
|
Amortization related to
acquired intangible assets
|
138.5
|
|
0.21
|
|
144.4
|
|
0.21
|
Restructuring
|
9.5
|
|
0.01
|
|
9.4
|
|
0.01
|
Fair value adjustment
of warrants
|
(5.2)
|
|
(0.01)
|
|
1.1
|
|
—
|
Other(1)
|
22.6
|
|
0.02
|
|
(26.8)
|
|
(0.04)
|
Income tax impact of
related adjustments
|
(6.7)
|
|
(0.01)
|
|
(83.6)
|
|
(0.12)
|
Adjusted net income
and Adjusted diluted EPS
|
$
103.5
|
|
$
0.14
|
|
$
130.9
|
|
$
0.18
|
Adjusted
weighted-average ordinary shares (diluted)
|
727.6
|
|
734.7
|
(1)
Primarily reflects the net impact of
foreign exchange gains and losses related to the remeasurement of
balances and other items that do not reflect our ongoing operating
performance. The three months ended March 31, 2024 also includes a
$15.8 loss on a small divestiture. The three months ended March 31,
2023 also includes a $49.4 gain on legal settlement.
|
Free cash flow
Free cash flow is calculated using Net cash provided by
operating activities less Capital expenditures. The following table
reconciles this non-GAAP measure to Net cash provided by operating
activities:
|
Three Months Ended
March 31,
|
(In millions);
(unaudited)
|
2024
|
|
2023
|
Net cash provided by
operating activities
|
$
176.2
|
|
$
227.5
|
Capital
expenditures
|
(64.4)
|
|
(59.3)
|
Free cash
flow
|
$
111.8
|
|
$
168.2
|
Reconciliations to Certain Non-GAAP Measures - 2024
Outlook
Adjusted EBITDA and Adjusted EBITDA margin
The following table presents our calculation of Adjusted EBITDA
and Adjusted EBITDA margin for the 2024 outlook and reconciles
these non-GAAP measures to our Net income (loss) for the same
period:
|
Year Ending December
31, 2024 (Forecasted)
|
(In millions);
(unaudited)
|
Low
|
|
High
|
Net income (loss)
attributable to ordinary shares
|
$
(160)
|
|
$
(100)
|
Dividends on preferred
shares(1)
|
35
|
|
35
|
Net income
(loss)
|
(125)
|
|
(65)
|
Provision (benefit) for
income taxes
|
60
|
|
60
|
Depreciation and
amortization
|
720
|
|
720
|
Interest expense,
net
|
280
|
|
280
|
Restructuring(2)
|
10
|
|
10
|
Transaction related
costs
|
15
|
|
15
|
Fair value adjustment
of warrants
|
(5)
|
|
(5)
|
Share-based
compensation expense
|
80
|
|
80
|
Other
|
20
|
|
20
|
Adjusted
EBITDA
|
$
1,055
|
|
$
1,115
|
Adjusted EBITDA
margin
|
41 %
|
|
42 %
|
(1)
Dividends on our MCPS are payable
quarterly at an annual rate of 5.25% of the liquidation preference
of $100 per share. For the purposes of calculating net loss
attributable to Clarivate, we have excluded the accrued and
anticipated MCPS dividends.
|
(2)
Reflects restructuring costs expected to
be incurred in 2024 associated with the Segment Optimization
restructuring program.
|
Adjusted diluted EPS
The following table presents our calculation of Adjusted diluted
EPS for the 2024 outlook and reconciles this non-GAAP measure to
our per share Net income (loss) for the same period:
|
Year Ending December
31, 2024
(Forecasted)
|
|
Low
|
|
High
|
(Unaudited)
|
Per
Share
|
|
Per
Share
|
Net income (loss)
attributable to ordinary shares
|
$
(0.24)
|
|
$
(0.14)
|
Dividends on preferred
shares(1)
|
0.05
|
|
0.05
|
Net income
(loss)
|
(0.19)
|
|
(0.09)
|
Restructuring(2)
|
0.01
|
|
0.01
|
Transaction related
costs
|
0.02
|
|
0.02
|
Share-based
compensation expense
|
0.11
|
|
0.11
|
Amortization related to
acquired intangible assets
|
0.75
|
|
0.75
|
Mark to market
adjustment on financial instruments
|
(0.01)
|
|
(0.01)
|
Other
|
0.05
|
|
0.05
|
Income tax impact of
related adjustments
|
(0.04)
|
|
(0.04)
|
Adjusted diluted
EPS
|
$
0.70
|
|
$
0.80
|
Adjusted
weighted-average ordinary shares
(diluted)(3)
|
730 million
|
(1-2)
Refer to associated line item
descriptions provided for the Adjusted EBITDA outlook
reconciliation table above.
|
(3)
For the purposes of calculating Adjusted
diluted EPS, we have excluded the accrued and anticipated MCPS
dividends and assumed the "if-converted" method of share
dilution.
|
Free cash flow
The following table presents our calculation of Free cash flow
for the 2024 outlook and reconciles this non-GAAP measure to our
Net cash provided by operating activities for the same period:
|
Year Ending December
31, 2024
(Forecasted)
|
(In millions);
(unaudited)
|
Low
|
|
High
|
Net cash provided by
operating activities
|
$
685
|
|
$
765
|
Capital
expenditures
|
(265)
|
|
(265)
|
Free cash
flow
|
$
420
|
|
$
500
|
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