Clarivate (CLVT) Goldman Sachs Communacopia + Technology Conference 2024 summary

Organic growth targets and business segment performance

• Targeting 4-6% organic revenue growth by 2026, with current progress in A&G and IP segments and ongoing investments to accelerate growth.

• A&G segment subscription growth has exceeded 3% due to platform enhancements and AI-driven features like Researcher Assistant.

• IP segment is recovering from market softness, with patent renewal volumes improving and new software solutions gaining traction.

• Life sciences segment is being repositioned with a focus on analytics and subscription models, with new platform launches planned through 2026.

• Life sciences expected to have the highest long-term growth potential, followed by IP and A&G.

Product innovation and AI initiatives

• Significant investments in product development, content expansion, and AI integration across all segments.

• Web of Science enhancements include a new UI, expanded journal coverage, and AI-powered Researcher Assistant.

• AI-driven products like TrademarkVision and MotionHall are already contributing to growth and customer value.

• AI and GenAI investments are a meaningful and growing part of the budget, with benefits expected to materialize in 2025 and beyond.

• Integration of content and tools across platforms (e.g., ProQuest, Alma, InCites) is a key focus for future product improvements.

Revenue mix, pricing, and margin outlook

• Emphasis on growing recurring and subscription revenue streams, with ongoing portfolio review to divest non-core or growth-dilutive businesses.

• Pricing increases have historically been 3-4%, with future upside tied to enhanced product value and innovation.

• Margins are expected to compress in the near term due to reinvestment, but margin expansion is targeted as organic growth accelerates.

• Productivity gains from AI tools are improving development efficiency, with potential for future cost savings.

• EBITDA margin expansion of 50+ basis points annually is seen as reasonable once mid-single-digit growth is achieved.