Clarivate (CLVT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $650.3M, down 2.8–3% year-over-year, with organic revenues slightly down and subscription revenues up 0.7%; net loss widened to $316.8M, mainly due to a $302.8M goodwill impairment in Life Sciences & Healthcare.

• Adjusted EBITDA for Q2 was $274.4M (42.2% margin), down from $284.9M (42.6%) in Q2 2023; free cash flow for Q2 was $60.3M, down 42.5% year-over-year.

• Leadership transition announced, with Matti Shem Tov appointed CEO; all preferred shares converted to ordinary shares in June 2024, eliminating future preferred dividends.

• Management highlighted new product launches, improved renewal rates, and expects a return to organic growth in H2 2024; full-year guidance reaffirmed.

• Company reorganized into three segments to enhance innovation and customer engagement.

Financial highlights

• Six-month 2024 revenue was $1,271.5M, down 2% year-over-year; adjusted EBITDA for H1 was $510.7M (40.2% margin); free cash flow for H1 was $172.1M, down 37%.

• Net loss for Q2 was $316.8M, compared to $141.7M loss in Q2 2023; adjusted diluted EPS for Q2 was $0.20, down $0.01 year-over-year.

• Subscription revenues were flat year-over-year, with organic growth driven by price increases; transactional and re-occurring revenues declined due to divestitures and lower IP patent renewal volumes.

• Cash and cash equivalents at June 30, 2024 were $376.4M, with $692.4M available under the revolving credit facility.

• Capital expenditures for H1 2024 were $130.3M, focused on product and content development.

Outlook and guidance

• Full-year 2024 revenue guidance reaffirmed at $2.57B–$2.67B, with organic growth expected at 0–2%.

• Adjusted EBITDA expected between $1.055B and $1.115B, with a margin of 41%–42%; adjusted diluted EPS forecasted at $0.70–$0.80.

• Free cash flow guidance at $420M–$500M, expected near the low end due to higher capital spending and working capital needs.

• Q3 expected to return to growth (flat to 1%), with non-subscription revenues to drive H2 improvement.

• Guidance assumes no further acquisitions, divestitures, or unanticipated events.