LONDON, Nov. 6, 2024
/PRNewswire/ -- Clarivate Plc (NYSE: CLVT) (the "Company" or
"Clarivate"), a leading global provider of transformative
intelligence, today reported results for the third quarter ended
September 30, 2024.
Third Quarter 2024 Financial Highlights
- Revenues of $622.2 million
decreased 3.9%
- Organic revenues decreased 2.6%, as an increase in subscription
revenues of 0.6% was offset by a decrease in re-occurring revenues
of 1.1% and transactional and other revenues of 13.6%
- Net loss of $65.6 million; Net
loss per diluted share of $0.09
- Adjusted net income(1) of $134.1 million decreased 12.1%; Adjusted diluted
EPS(1) of $0.19 decreased
9.5% or $0.02
- Adjusted EBITDA(1) of $264.4
million decreased 6.0%; Adjusted EBITDA margin(1)
of 42.5% decreased 100 basis points primarily due to lower
revenues
- Net cash provided by operating activities of $202.9 million increased $39.5 million; Free cash flow(1) of
$126.3 million increased $24.6 million primarily due to the timing of
working capital
Nine Months Ended September 30,
2024 Financial Highlights
- Revenues of $1,893.7 million
decreased 2.6%
- Organic revenues decreased 1.5% as an increase in subscription
revenues of 1.2% was offset by a decline in re-occurring revenues
of 2.3% and transactional and other revenues of 9.3%
- Net loss of $444.9 million; Net
loss per diluted share of $0.69
- Adjusted net income(1) of $379.8 million decreased 12.8%; Adjusted diluted
EPS(1) of $0.52 decreased
11.9% or $0.07
- Adjusted EBITDA(1) of $775.1
million decreased 5.4%; Adjusted EBITDA margin(1)
of 40.9% decreased 120 basis points primarily due to lower
revenues
- Net cash provided by operating activities decreased
$48.0 million to $505.3 million; Free cash flow(1)
decreased $76.3 million to
$298.4 million primarily due to lower
operating income and increased capital expenditures
"Clarivate's third quarter results are unsatisfactory and
reflect an overdependency on fluctuating transactional revenue and
areas of the business with low margin characteristics," said
Matti Shem Tov, Chief Executive
Officer. "As we look ahead, it is clear the Company has work to do
to improve performance. Our Value Creation Plan is designed to
increase subscription and re-occurring revenue, improve sales
execution, accelerate innovation and continue portfolio solutions
rationalization. We will leverage Clarivate's strong foundation,
unique product offerings and talented team to take the necessary
actions to improve predictability and drive profitable growth.
Alongside the management team and Board, I am invigorated by the
opportunities before us and remain focused on successfully
executing our strategy to realize Clarivate's potential."
Removal of Outlook
As a result of the recent CEO transition and the work being done
under the Value Creation Plan, the Company has removed its
forward-looking outlook for 2024. All previous outlooks provided by
the Company should no longer be relied upon.
Selected Financial Information
|
Three Months
Ended
September
30,
|
|
Change
|
|
Nine Months
Ended
September 30,
|
|
Change
|
|
(in millions, except
percentages and per share data), (unaudited)
|
2024
|
|
2023
|
|
$
|
|
%
|
|
2024
|
|
2023
|
|
$
|
|
%
|
|
Revenues
|
$
622.2
|
|
$
647.2
|
|
$ (25.0)
|
|
(3.9) %
|
|
$
1,893.7
|
|
$
1,945.1
|
|
$ (51.4)
|
|
(2.6) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ (65.6)
|
|
$
12.3
|
|
$ (77.9)
|
|
N/M
|
|
$
(444.9)
|
|
$
(67.3)
|
|
$
(377.6)
|
|
N/M
|
|
Diluted EPS
|
$ (0.09)
|
|
$
(0.01)
|
|
$ (0.08)
|
|
N/M
|
|
$
(0.69)
|
|
$
(0.18)
|
|
$ (0.51)
|
|
N/M
|
|
Weighted average
ordinary shares, diluted
|
718.7
|
|
670.9
|
|
47.8
|
|
7.1 %
|
|
690.5
|
|
673.9
|
|
16.6
|
|
2.5 %
|
|
Adjusted
EBITDA(1)
|
$
264.4
|
|
$
281.4
|
|
$ (17.0)
|
|
(6.0) %
|
|
$ 775.1
|
|
$ 819.0
|
|
$ (43.9)
|
|
(5.4) %
|
|
Adjusted net
income(1)
|
$
134.1
|
|
$
152.6
|
|
$ (18.5)
|
|
(12.1) %
|
|
$ 379.8
|
|
$ 435.7
|
|
$ (55.9)
|
|
(12.8) %
|
|
Adjusted diluted
EPS(1)
|
$
0.19
|
|
$
0.21
|
|
$ (0.02)
|
|
(9.5) %
|
|
$ 0.52
|
|
$ 0.59
|
|
$ (0.07)
|
|
(11.9) %
|
|
Adjusted weighted
average ordinary shares, diluted(1)
|
723.5
|
|
731.4
|
|
(7.9)
|
|
(1.1) %
|
|
726.1
|
|
733.6
|
|
(7.5)
|
|
(1.0) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
202.9
|
|
$
163.4
|
|
$
39.5
|
|
24.2 %
|
|
$ 505.3
|
|
$ 553.3
|
|
$ (48.0)
|
|
(8.7) %
|
|
Free cash
flow(1)
|
$
126.3
|
|
$
101.7
|
|
$
24.6
|
|
24.2 %
|
|
$ 298.4
|
|
$ 374.7
|
|
$ (76.3)
|
|
(20.4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2024 Commentary
Revenues for the third quarter decreased $25.0 million, or 3.9%, to $622.2 million, primarily due to the divestiture
of Valipat in April 2024 and lower
transactional sales across all three segments. Organic
revenues decreased $16.5 million
or 2.6%.
Subscription revenues for the third quarter increased
$3.0 million, or 0.7%, to
$411.1 million. Organic subscription
revenues increased 0.6%, driven by price increases, partially
offset by lower net volume in IP and LS&H.
Re-occurring revenues for the third quarter decreased
$0.1 million, or 0.1%, to
$106.7 million. Organic re-occurring
revenues decreased 1.1%, primarily due to lower IP patent renewal
volume.
Transactional and other revenues for the third quarter decreased
$27.9 million, or 21.1%, to
$104.4 million. Organic transactional
and other revenues decreased 13.6%, due to lower sales across all
three segments.
Balance Sheet and Cash Flow
As of September 30, 2024, cash and
cash equivalents of $388.5 million
increased $17.8 million compared to
December 31, 2023.
The Company's total debt outstanding as of September 30, 2024 was $4,711.5 million, a decrease of $58.8 million compared to December 31, 2023, driven by an accelerated debt
repayment.
Net cash provided by operating activities of $505.3 million for the nine months ended
September 30, 2024 decreased
$48.0 million compared to the prior
year period, primarily due to lower operating results, partially
offset by timing differences in working capital. Free cash
flow(1) for the nine months ended September 30, 2024 was $298.4 million, a decrease of $76.3 million compared to the prior year
period.
|
Notes to press
release
|
|
(1) Non-GAAP
measure. Please see "Reconciliations to Certain Non-GAAP Measures"
in this release for important disclosures and reconciliations of
these financial measures to the most directly comparable GAAP
measure. These terms are defined elsewhere in this press
release.
|
|
N/M - Represents a
change approximately equal or in excess of 100% or not
meaningful.
|
|
Conference Call and Webcast
Clarivate will host a conference call and webcast today to
review the results for the third quarter at 9:00 a.m. Eastern Time. The webcast is open to
all interested parties and may include forward-looking
information.
The live webcast of the earnings call will be accessible through
the investor relations section of the Company's website. To join
the webcast please visit
https://events.q4inc.com/attendee/495058600.
Interested parties may access the live audio broadcast. U.S.
participants may call 800-715-9871; international participants may
call +1 646-307-1963 (long-distance charges will apply). The
conference ID number is 5907538.
A replay of the webcast will also be available on
https://ir.clarivate.com beginning two hours after the conclusion
of the live call and will remain available for one year.
Use of Non-GAAP Financial Measures
Non-GAAP results are financial measures that are not prepared in
accordance with U.S. generally accepted accounting principles
("GAAP") and are presented only as a supplement to our financial
statements based on GAAP. Non-GAAP financial information is
provided to enhance the reader's understanding of our financial
performance, but none of these non-GAAP financial measures are
recognized terms under GAAP. They are not measures of financial
condition or liquidity, and should not be considered as an
alternative to profit or loss for the period determined in
accordance with GAAP or operating cash flows determined in
accordance with GAAP. As a result, you should not consider such
measures in isolation from, or as a substitute for, financial
measures or results of operations calculated or determined in
accordance with GAAP.
We use non-GAAP measures in our operational and financial
decision-making. We believe that such measures allow us to focus on
what we deem to be a more reliable indicator of ongoing operating
performance and our ability to generate cash flow from operations,
and we also believe that investors may find these non-GAAP
financial measures useful for the same reasons. Non-GAAP measures
are frequently used by securities analysts, investors, and other
interested parties in their evaluation of companies comparable to
us, many of which present non-GAAP measures when reporting their
results. These measures can be useful in evaluating our performance
against our peer companies because we believe the measures provide
users with valuable insight into key components of GAAP financial
disclosures. However, non-GAAP measures have limitations as
analytical tools and because not all companies use identical
calculations, our presentation of non-GAAP financial measures may
not be comparable to other similarly titled measures of other
companies.
Definitions and reconciliations of non-GAAP measures, such as
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income,
Adjusted diluted EPS, and Free cash flow to the most directly
comparable GAAP measures are provided within the schedules attached
to this release. Our presentation of non-GAAP measures should not
be construed as an inference that our future results will be
unaffected by any of the adjusted items, or that any projections
and estimates will be realized in their entirety or at all.
Forward-Looking Statements
This communication includes statements that express our
opinions, expectations, beliefs, plans, objectives, assumptions, or
projections regarding future events or future results and therefore
are, or may be deemed to be, "forward-looking statements" within
the meaning of the "safe harbor provisions" of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified by the use of
forward-looking terminology, including the terms "believes,"
"estimates," "anticipates," "expects," "seeks," "projects,"
"intends," "plans," "may," "will," or "should" or, in each case,
their negative or other variations or comparable terminology. These
forward-looking statements include all matters that are not
historical facts, and include statements regarding our intentions,
beliefs, or current expectations concerning, among other things,
anticipated cost savings, results of operations, financial
condition, liquidity, prospects, growth, strategies, and the
markets in which we operate. Such forward-looking statements are
based on available current market material and management's
expectations, beliefs, and forecasts concerning future events
impacting us. There can be no assurance that future developments
affecting us will be those that we have anticipated. These
forward-looking statements involve a number of risks and
uncertainties (some of which are beyond our control) or other
assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described in Item 1A. Risk
Factors of our annual report on Form 10-K. Should one or more
of these risks or uncertainties materialize, or should any of the
assumptions prove incorrect, actual results may vary in material
respects from those projected in these forward-looking statements.
We do not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws. Please consult our public filings with
the SEC or on our website at www.clarivate.com.
About Clarivate
Clarivate™ is a leading global provider of transformative
intelligence. We offer enriched data, insights & analytics,
workflow solutions and expert services in the areas of Academia
& Government, Intellectual Property and Life Sciences &
Healthcare. For more information, please visit
www.clarivate.com.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
|
(In
millions)
|
September 30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents, including restricted cash
|
$
388.5
|
|
$
370.7
|
|
Accounts receivable,
net
|
771.8
|
|
908.3
|
|
Prepaid
expenses
|
97.7
|
|
88.5
|
|
Other current
assets
|
81.1
|
|
68.0
|
|
Assets held for
sale
|
—
|
|
26.7
|
|
Total current
assets
|
1,339.1
|
|
1,462.2
|
|
Property and equipment,
net
|
47.3
|
|
51.6
|
|
Other intangible
assets, net
|
8,726.7
|
|
9,006.6
|
|
Goodwill
|
1,736.8
|
|
2,023.7
|
|
Other non-current
assets
|
71.8
|
|
60.8
|
|
Deferred income
taxes
|
50.8
|
|
46.7
|
|
Operating lease
right-of-use assets
|
58.1
|
|
55.2
|
|
Total
assets
|
$
12,030.6
|
|
$
12,706.8
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
126.5
|
|
$
144.1
|
|
Accrued
compensation
|
111.7
|
|
126.5
|
|
Accrued expenses and
other current liabilities
|
375.1
|
|
315.2
|
|
Current portion of
deferred revenues
|
890.2
|
|
983.1
|
|
Current portion of
operating lease liability
|
22.1
|
|
24.4
|
|
Liabilities held for
sale
|
—
|
|
6.7
|
|
Total current
liabilities
|
1,525.6
|
|
1,600.0
|
|
Long-term
debt
|
4,632.5
|
|
4,721.1
|
|
Non-current portion of
deferred revenues
|
21.6
|
|
38.7
|
|
Other non-current
liabilities
|
52.5
|
|
41.9
|
|
Deferred income
taxes
|
227.0
|
|
249.6
|
|
Operating lease
liabilities
|
57.9
|
|
63.2
|
|
Total
liabilities
|
6,517.1
|
|
6,714.5
|
|
Commitments and
contingencies
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Preferred Shares, no
par value; 14.4 shares authorized; 5.25% Mandatory Convertible
Preferred Shares, Series A, zero and 14.4 shares issued and
outstanding as of September 30, 2024 and December 31, 2023,
respectively
|
—
|
|
1,392.6
|
|
Ordinary Shares, no par
value; unlimited shares authorized; 710.3 and 666.1 shares issued
and outstanding as of September 30, 2024 and December 31, 2023,
respectively
|
13,069.0
|
|
11,740.5
|
|
Accumulated other
comprehensive loss
|
(433.8)
|
|
(495.3)
|
|
Accumulated
deficit
|
(7,121.7)
|
|
(6,645.5)
|
|
Total shareholders'
equity
|
5,513.5
|
|
5,992.3
|
|
Total liabilities
and shareholders' equity
|
$
12,030.6
|
|
$
12,706.8
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(In millions, except
per share data)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues
|
$
622.2
|
|
$
647.2
|
|
$
1,893.7
|
|
$
1,945.1
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
210.1
|
|
220.6
|
|
641.5
|
|
674.8
|
|
Selling, general and
administrative costs
|
169.7
|
|
171.9
|
|
546.8
|
|
559.3
|
|
Depreciation and
amortization
|
177.2
|
|
176.8
|
|
541.0
|
|
527.5
|
|
Goodwill and
intangible asset impairments
|
13.8
|
|
—
|
|
316.6
|
|
135.2
|
|
Restructuring and
other impairments
|
4.0
|
|
3.7
|
|
14.2
|
|
25.3
|
|
Other operating
expense (income), net
|
25.7
|
|
(13.0)
|
|
46.9
|
|
(30.5)
|
|
Total operating
expenses
|
600.5
|
|
560.0
|
|
2,107.0
|
|
1,891.6
|
|
Income (loss) from
operations
|
21.7
|
|
87.2
|
|
(213.3)
|
|
53.5
|
|
Fair value adjustment
of warrants
|
—
|
|
(12.6)
|
|
(5.2)
|
|
(14.4)
|
|
Interest expense,
net
|
72.2
|
|
71.9
|
|
213.5
|
|
218.5
|
|
Income (loss) before
income taxes
|
(50.5)
|
|
27.9
|
|
(421.6)
|
|
(150.6)
|
|
Provision (benefit)
for income taxes
|
15.1
|
|
15.6
|
|
23.3
|
|
(83.3)
|
|
Net income
(loss)
|
(65.6)
|
|
12.3
|
|
(444.9)
|
|
(67.3)
|
|
Dividends on preferred
shares
|
—
|
|
18.9
|
|
31.3
|
|
56.3
|
|
Net income (loss)
attributable to ordinary shares
|
$
(65.6)
|
|
$
(6.6)
|
|
$
(476.2)
|
|
$
(123.6)
|
|
|
|
|
|
|
|
|
|
Per share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.09)
|
|
$
(0.01)
|
|
$
(0.69)
|
|
$
(0.18)
|
|
Diluted
|
$
(0.09)
|
|
$
(0.01)
|
|
$
(0.69)
|
|
$
(0.18)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute earnings per share:
|
|
|
|
|
|
|
|
|
Basic
|
718.7
|
|
670.9
|
|
690.5
|
|
673.9
|
|
Diluted
|
718.7
|
|
670.9
|
|
690.5
|
|
673.9
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
(In
millions)
|
2024
|
|
2023
|
|
Cash Flows From
Operating Activities
|
|
|
|
|
Net income
(loss)
|
$
(444.9)
|
|
$
(67.3)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
and amortization
|
541.0
|
|
527.5
|
|
Share-based
compensation
|
48.9
|
|
97.1
|
|
Restructuring
and other impairments, including goodwill
|
314.5
|
|
138.9
|
|
Gain on legal
settlement
|
—
|
|
(49.4)
|
|
Deferred income
taxes
|
(28.8)
|
|
(51.3)
|
|
Amortization of
debt issuance costs
|
11.1
|
|
12.9
|
|
Other operating
activities
|
36.1
|
|
2.4
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
148.2
|
|
110.3
|
|
Prepaid
expenses
|
(8.5)
|
|
(10.6)
|
|
Other
assets
|
(9.8)
|
|
19.5
|
|
Accounts
payable
|
(16.5)
|
|
(2.4)
|
|
Accrued
expenses and other current liabilities
|
22.1
|
|
(33.8)
|
|
Deferred
revenues
|
(102.3)
|
|
(56.9)
|
|
Operating
leases, net
|
(7.8)
|
|
(6.2)
|
|
Other
liabilities
|
2.0
|
|
(77.4)
|
|
Net cash provided by
operating activities
|
505.3
|
|
553.3
|
|
Cash Flows From
Investing Activities
|
|
|
|
|
Capital
expenditures
|
(206.9)
|
|
(178.6)
|
|
Payments for
acquisitions, net of cash acquired
|
(32.0)
|
|
(2.3)
|
|
Proceeds from
divestitures, net of cash divested
|
(19.2)
|
|
10.5
|
|
Net cash provided by
(used for) investing activities
|
(258.1)
|
|
(170.4)
|
|
Cash Flows From
Financing Activities
|
|
|
|
|
Principal
payments on term loans
|
(58.1)
|
|
(150.0)
|
|
Payment of debt
issuance costs and discounts
|
(20.1)
|
|
0.1
|
|
Repurchases of
ordinary shares
|
(100.0)
|
|
(100.0)
|
|
Cash dividends
on preferred shares
|
(37.7)
|
|
(56.7)
|
|
Payments
related to finance lease
|
(0.7)
|
|
(0.8)
|
|
Payments
related to tax withholding for share-based compensation
|
(13.9)
|
|
(14.8)
|
|
Net cash provided by
(used for) financing activities
|
(230.5)
|
|
(322.2)
|
|
Effects of
exchange rates
|
1.1
|
|
(10.3)
|
|
Net change in cash and
cash equivalents, including restricted cash
|
17.8
|
|
50.4
|
|
Cash and cash
equivalents, including restricted cash, beginning of
period
|
370.7
|
|
356.8
|
|
Cash and cash
equivalents, including restricted cash, end of period
|
$
388.5
|
|
$
407.2
|
|
Supplemental Revenues Information
Annualized contract value ("ACV") represents the annualized
value for the next 12 months of subscription-based client
license agreements, assuming that all expiring license agreements
during that period are renewed at their current price level. Our
ACV was $1,596.4 and $1,579.2 as of September
30, 2024 and 2023, respectively, which corresponds to an
increase of 1.1%. The increase in ACV was primarily due to the
impact of price increases, partially offset by volume declines.
The following tables present our revenues by type and by segment
for the periods indicated, as well as the drivers of the variances
between periods, including as a percentage of such revenues.
|
Three Months
Ended
September 30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Subscription
revenues
|
$
411.1
|
|
$
408.1
|
|
$
3.0
|
0.7 %
|
0.2 %
|
— %
|
(0.1) %
|
0.6 %
|
|
Re-occurring
revenues
|
106.7
|
|
106.8
|
|
(0.1)
|
(0.1) %
|
— %
|
— %
|
1.0 %
|
(1.1) %
|
|
Transactional and other
revenues
|
104.4
|
|
132.3
|
|
(27.9)
|
(21.1) %
|
0.5 %
|
(8.1) %
|
0.1 %
|
(13.6) %
|
|
Revenues
|
$
622.2
|
|
$
647.2
|
|
$
(25.0)
|
(3.9) %
|
0.2 %
|
(1.6) %
|
0.1 %
|
(2.6) %
|
|
|
Nine Months
Ended
September 30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Subscription
revenues
|
$ 1,219.8
|
|
$ 1,207.3
|
|
$
12.5
|
1.0 %
|
0.1 %
|
— %
|
(0.3) %
|
1.2 %
|
|
Re-occurring
revenues
|
317.8
|
|
325.5
|
|
(7.7)
|
(2.4) %
|
— %
|
— %
|
(0.1) %
|
(2.3) %
|
|
Transactional and other
revenues
|
356.1
|
|
412.3
|
|
(56.2)
|
(13.6) %
|
0.2 %
|
(4.5) %
|
— %
|
(9.3) %
|
|
Revenues
|
$ 1,893.7
|
|
$ 1,945.1
|
|
$
(51.4)
|
(2.6) %
|
0.1 %
|
(1.0) %
|
(0.2) %
|
(1.5) %
|
|
|
Three Months
Ended
September 30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Academia &
Government
|
$
321.3
|
|
$
327.2
|
|
$
(5.9)
|
(1.8) %
|
— %
|
— %
|
(0.1) %
|
(1.7) %
|
|
Intellectual
Property
|
199.8
|
|
211.7
|
|
(11.9)
|
(5.6) %
|
0.1 %
|
(4.6) %
|
0.7 %
|
(1.8) %
|
|
Life Sciences &
Healthcare
|
101.1
|
|
108.3
|
|
(7.2)
|
(6.6) %
|
0.9 %
|
(0.7) %
|
(0.3) %
|
(6.5) %
|
|
Revenues
|
$
622.2
|
|
$
647.2
|
|
$
(25.0)
|
(3.9) %
|
0.2 %
|
(1.6) %
|
0.1 %
|
(2.6) %
|
|
|
Nine Months
Ended
September 30,
|
|
Change
|
% of
Change
|
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
$
|
%
|
Acquisitions
|
Disposals
|
FX
|
Organic
|
|
Academia &
Government
|
$
983.5
|
|
$
983.9
|
|
$
(0.4)
|
— %
|
— %
|
— %
|
(0.1) %
|
0.1 %
|
|
Intellectual
Property
|
602.3
|
|
637.1
|
|
(34.8)
|
(5.5) %
|
— %
|
(2.6) %
|
(0.2) %
|
(2.7) %
|
|
Life Sciences &
Healthcare
|
307.9
|
|
324.1
|
|
(16.2)
|
(5.0) %
|
0.5 %
|
(0.6) %
|
(0.5) %
|
(4.4) %
|
|
Revenues
|
$ 1,893.7
|
|
$ 1,945.1
|
|
$
(51.4)
|
(2.6) %
|
0.1 %
|
(1.0) %
|
(0.2) %
|
(1.5) %
|
|
Reconciliations to Certain Non-GAAP Measures
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents Net income (loss) before the
Provision (benefit) for income taxes, Depreciation and
amortization, and Interest expense, net, adjusted to exclude
acquisition and/or disposal-related transaction costs, share-based
compensation, restructuring expenses, impairments, the impact of
certain non-cash fair value adjustments on financial instruments,
unrealized foreign currency gains/losses, legal settlements, and
other items that are included in Net income (loss) for the period
that we do not consider indicative of our ongoing operating
performance. Net income (loss) margin is calculated by dividing Net
income (loss) by Revenues. Adjusted EBITDA margin is calculated by
dividing Adjusted EBITDA by Revenues.
The following table presents our calculation of Adjusted EBITDA
and Adjusted EBITDA margin for the three and nine months ended
September 30, 2024 and 2023 and
reconciles these non-GAAP measures to our Net income (loss) and Net
income (loss) margin for the same periods:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
(In millions, except
percentages); (unaudited)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
$
(65.6)
|
|
$
12.3
|
|
$ (444.9)
|
|
$
(67.3)
|
|
Provision (benefit) for
income taxes
|
15.1
|
|
15.6
|
|
23.3
|
|
(83.3)
|
|
Depreciation and
amortization
|
177.2
|
|
176.8
|
|
541.0
|
|
527.5
|
|
Interest expense,
net
|
72.2
|
|
71.9
|
|
213.5
|
|
218.5
|
|
Transaction related
costs
|
6.1
|
|
2.7
|
|
13.6
|
|
5.1
|
|
Share-based
compensation expense
|
15.4
|
|
25.4
|
|
49.7
|
|
97.1
|
|
Goodwill and intangible
asset impairments
|
13.8
|
|
—
|
|
316.6
|
|
135.2
|
|
Restructuring and other
impairments
|
4.0
|
|
3.7
|
|
14.2
|
|
25.3
|
|
Fair value adjustment
of warrants
|
—
|
|
(12.6)
|
|
(5.2)
|
|
(14.4)
|
|
Other(1)
|
26.2
|
|
(14.4)
|
|
53.3
|
|
(24.7)
|
|
Adjusted
EBITDA
|
$
264.4
|
|
$
281.4
|
|
$
775.1
|
|
$
819.0
|
|
|
|
|
|
|
|
|
|
Net income (loss)
margin
|
(10.5) %
|
|
1.9 %
|
|
(23.5) %
|
|
(3.5) %
|
|
Adjusted EBITDA
margin
|
42.5 %
|
|
43.5 %
|
|
40.9 %
|
|
42.1 %
|
|
|
(1)
Primarily reflects the net impact of unrealized foreign currency
gains and losses, as well as other items that do not reflect our
ongoing operating performance. For the nine months ended September
30, 2024, the amount includes a $14.8 loss on divestiture and for
the nine months ended September 30, 2023, the amount includes a
$49.4 gain on legal settlement.
|
|
Adjusted net income and Adjusted diluted EPS
Adjusted net income represents Net income (loss), adjusted to
exclude acquisition and/or disposal-related transaction costs,
amortization related to acquired intangible assets, share-based
compensation, restructuring expenses, impairments, the impact of
certain non-cash fair value adjustments on financial instruments,
unrealized foreign currency gains/losses, legal settlements, and
other items that are included in net income (loss) for the period
that we do not consider indicative of our ongoing operating
performance and the associated income tax impact of such
adjustments.
Adjusted diluted EPS is calculated by dividing Adjusted net
income by Adjusted diluted weighted average shares. The Adjusted
diluted weighted average shares calculation assumes that all
instruments in the calculation are dilutive.
The following tables present our calculation of Adjusted net
income and Adjusted diluted EPS for the three and nine months ended
September 30, 2024 and 2023 and
reconciles these non-GAAP measures to our Net income (loss) and
diluted EPS for the same periods:
|
Three Months Ended
September 30,
|
|
2024
|
|
2023
|
|
(In millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Net income (loss) and
EPS
|
$
(65.6)
|
|
$
(0.09)
|
|
$
12.3
|
|
$
0.02
|
|
Transaction related
costs
|
6.1
|
|
0.01
|
|
2.7
|
|
—
|
|
Share-based
compensation expense
|
15.4
|
|
0.02
|
|
25.4
|
|
0.04
|
|
Amortization related to
acquired intangible assets
|
138.7
|
|
0.19
|
|
141.9
|
|
0.21
|
|
Goodwill and intangible
asset impairments
|
13.8
|
|
0.02
|
|
—
|
|
—
|
|
Restructuring and other
impairments
|
4.0
|
|
0.01
|
|
3.7
|
|
0.01
|
|
Fair value adjustment
of warrants
|
—
|
|
—
|
|
(12.6)
|
|
(0.02)
|
|
Other(1)
|
26.2
|
|
0.04
|
|
(14.4)
|
|
(0.04)
|
|
Income tax impact of
related adjustments
|
(4.5)
|
|
(0.01)
|
|
(6.4)
|
|
(0.01)
|
|
Adjusted net income and
Adjusted diluted EPS
|
$
134.1
|
|
$
0.19
|
|
$
152.6
|
|
$
0.21
|
|
Adjusted weighted
average ordinary shares, diluted
|
723.5
|
|
731.4
|
|
|
(1)
Primarily reflects the net impact of unrealized foreign currency
gains and losses, as well as other items that do not reflect our
ongoing operating performance.
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
(In millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Net income (loss) and
EPS
|
$
(444.9)
|
|
$
(0.64)
|
|
$
(67.3)
|
|
$
(0.10)
|
|
Transaction related
costs
|
13.6
|
|
0.02
|
|
5.1
|
|
0.01
|
|
Share-based
compensation expense
|
49.7
|
|
0.07
|
|
97.1
|
|
0.14
|
|
Amortization related to
acquired intangible assets
|
416.9
|
|
0.60
|
|
429.8
|
|
0.64
|
|
Goodwill and intangible
asset impairments
|
316.6
|
|
0.46
|
|
135.2
|
|
0.20
|
|
Restructuring and other
impairments
|
14.2
|
|
0.02
|
|
25.3
|
|
0.04
|
|
Fair value adjustment
of warrants
|
(5.2)
|
|
(0.01)
|
|
(14.4)
|
|
(0.02)
|
|
Other(1)
|
53.3
|
|
0.05
|
|
(24.7)
|
|
(0.10)
|
|
Income tax impact of
related adjustments
|
(34.4)
|
|
(0.05)
|
|
(150.4)
|
|
(0.22)
|
|
Adjusted net income and
Adjusted diluted EPS
|
$
379.8
|
|
$
0.52
|
|
$
435.7
|
|
$
0.59
|
|
Adjusted weighted
average ordinary shares, diluted
|
726.1
|
|
733.6
|
|
|
(1)
Primarily reflects the net impact of unrealized foreign currency
gains and losses, as well as other items that do not reflect our
ongoing operating performance. For the nine months ended September
30, 2024, the amount includes a $14.8 loss on divestiture and for
the nine months ended September 30, 2023, the amount includes a
$49.4 gain on legal settlement.
|
|
Free cash flow
Free cash flow represents Net cash provided by (used for)
operating activities less Capital expenditures. The following table
reconciles this non-GAAP measure to Net cash provided by operating
activities:
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(In millions);
(unaudited)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net cash provided by
operating activities
|
$
202.9
|
|
$
163.4
|
|
$
505.3
|
|
$
553.3
|
|
Capital
expenditures
|
(76.6)
|
|
(61.7)
|
|
(206.9)
|
|
(178.6)
|
|
Free cash
flow
|
$
126.3
|
|
$
101.7
|
|
$
298.4
|
|
$
374.7
|
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