Clarivate (CLVT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue declined to $622.2M, down 3.9% year-over-year, with all segments and geographies impacted by lower transactional sales, divestitures, and market headwinds.

• Net loss for Q3 was $65.6M, compared to net income of $12.3M in Q3 2023, driven by a $14M goodwill impairment and FX losses.

• Adjusted EBITDA for Q3 was $264.4M (42.5% margin), down from $281.4M (43.5%) last year.

• CEO transition led to a comprehensive review and launch of a Value Creation Plan focused on recurring revenue, sales execution, product innovation, and portfolio simplification.

• All previous guidance for 2024 and long-range outlooks have been withdrawn to prioritize execution of the transformation plan.

Financial highlights

• Q3 2024 revenue was $622.2M, down $25M or 3.9% year-over-year, with net loss of $65.6M and basic/diluted EPS of $(0.09).

• Adjusted diluted EPS for Q3 was $0.19, down from $0.21 year-over-year.

• Operating cash flow for Q3 was $202.9M, up $39.5M year-over-year; free cash flow was $126.3M, up $24.6M, but year-to-date free cash flow is $298.4M, down $76.3M.

• Adjusted EBITDA margin for Q3 was 42.5%, down 100 bps year-over-year; net loss margin was (10.5)%.

• Cash and cash equivalents at September 30, 2024, were $388.5M, with $691.9M available under the revolving credit facility.

Outlook and guidance

• All full-year and long-range guidance has been withdrawn due to leadership transition and strategic review.

• Management expects continued pressure on transactional and IP revenues, with subscription growth driven by price increases.

• More details and KPIs to track progress will be provided in the next earnings call.