Clarivate (CLVT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $593.7M, down 4% year-over-year, mainly due to divestitures and product wind-downs, while organic revenue grew 0.3% and organic ACV increased 1.2% year-over-year.

• Net loss widened to $103.9M from $93.8M in Q1 2024, primarily due to higher restructuring costs related to the Value Creation Plan.

• Adjusted EBITDA was $233.2M, with a margin of 39.3%, nearly flat year-over-year; free cash flow was $110.3M, stable from the prior year.

• Strategic focus on subscription and recurring revenue, sales execution, and product innovation continues, with major partnerships expanded, including a multi-year British Library deal and a 57% increase in Brazilian higher education institutions under contract.

• $50M in ordinary shares were repurchased in Q1 2025 as part of the capital allocation strategy.

Financial highlights

• Subscription revenue fell 3.6% to $388.6M, mainly from the ScholarOne divestiture; transactional revenue dropped 14.2% to $99.2M, impacted by Valipat divestiture and product exits.

• Adjusted EBITDA margin improved by 130 bps to 39.3%; adjusted diluted EPS remained flat at $0.14.

• Free cash flow conversion held steady at 47%; net cash from operating activities was $171.2M.

• Cost of revenues decreased 5% to $207.0M, and SG&A costs dropped 7% to $178.4M, reflecting cost management.

• Interest expense fell 8% to $64.3M, reflecting lower borrowings.

Outlook and guidance

• 2025 revenue guidance reaffirmed at $2.28B–$2.40B; adjusted EBITDA expected at $940M–$1.00B (margin 40.5%–42.5%).

• Adjusted diluted EPS forecasted at $0.60–$0.70; free cash flow expected between $300M–$380M.

• Organic ACV growth projected at 1.0%–2.0%; recurring organic revenue growth between -1.0% and 1.0%.

• Recurring revenue mix projected to improve to 85% for the year, supported by strategic disposals.

• Management expects wind-down of three product groups to reduce annual revenues by less than 10% and profit by less than 5%.