Clarivate (CLVT) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $586 million, with organic ACV up 1.6% and subscription organic revenue up 1.7%, reflecting a successful shift to subscription-based solutions and progress on the Value Creation Plan.

• Adjusted EBITDA reached $241.2 million (41.2% margin), up from $233.2 million (39.3% margin) in the prior year, driven by cost discipline and subscription growth.

• Free cash flow was $79 million, enabling $143 million in debt retirement and $18 million in share repurchases during the quarter.

• The company is actively pursuing the sale of its Life Sciences & Healthcare (LS&H) segment to focus on Academia & Government (A&G) and Intellectual Property (IP) businesses.

• Strategic focus remains on subscription and recurring revenue, AI-driven innovation, and portfolio rationalization.

Financial highlights

• Q1 revenue was $586 million, with a net loss of $40 million, a $64 million improvement year-over-year due to FX benefits and lower expenses.

• Adjusted diluted EPS increased to $0.18, supported by EBITDA growth, lower interest and tax expenses, and share repurchases.

• Operating cash flow was $135 million; free cash flow was $79 million, down year-over-year due to higher working capital needs.

• Cost of revenues decreased 7% year-over-year, reflecting improved cost management and product wind-downs.

• Subscription revenues grew organically, offset by declines in transactional revenues due to product group wind-downs in LS&H and A&G.

Outlook and guidance

• Full-year organic ACV growth expected between 2%-3%, with recurring organic growth at about 1.5%.

• Revenue projected at $2.30B–$2.42B, with a decline due to business disposals but recurring revenue mix to improve to 88%-90%.

• Adjusted EBITDA margin expected at 42.0%–43.5%, and adjusted diluted EPS to grow about 9% to $0.70–$0.80.

• Free cash flow forecasted to grow 10% to $365M–$435M.

• Guidance assumes ownership of LS&H for the full year; potential sale may prompt revisions.