Clarivate PLC (CLVT, Financial), a global leader in providing trusted insights and analytics, released its Q3 2023 earnings report on November 7, 2023. The company reported a 1.8% increase in revenues, reaching $647.2 million. However, on a constant currency basis, revenues decreased by 1.3%. The company's organic revenues increased by 1.7%, driven by a 3.5% increase in transactional and other revenues, a 1.3% increase in subscription revenues, and a 0.5% increase in re-occurring revenues.
Financial Highlights
The company reported a net loss attributable to ordinary shares of $6.6 million, translating to a net loss per diluted share of $0.01. The adjusted net income stood at $152.6 million, marking a 6.2% increase. The adjusted income per diluted share was $0.21, a 5.0% increase or $0.01. Adjusted EBITDA for the period was $281.4 million, a 3.6% increase driven by cost savings from integration programs. The adjusted EBITDA margin was 43.5%, an increase of 80 basis points.
Net cash provided by operating activities decreased by $44.4 million to $163.4 million. Free cash flow decreased by $38.7 million to $101.7 million, driven by timing-related, in-quarter working capital requirements.
Performance Analysis
Clarivate's improved Q3 performance was driven by organic growth from its Academia & Government and Life Sciences & Healthcare (LS&H) segments. The company secured new customer wins across all three of its segments and launched new product offerings, including an AI-powered tool to simplify IP budgets and forecasts and an enhanced search platform within LS&H powered by generative artificial intelligence.
As of September 30, 2023, the company's cash and cash equivalents stood at $398.9 million, an increase of $50.1 million compared to December 31, 2022. The company's total debt outstanding as of September 30, 2023, was $4,920.5 million, a decrease of $150.8 million compared to December 31, 2022.
Outlook for 2023
Clarivate reaffirmed its 2023 outlook, with revenues expected to be between $2.60 billion and $2.67 billion. The company anticipates an organic revenue growth of 0.00% to 2.00%, and an adjusted EBITDA of $1.09 billion to $1.14 billion. The adjusted EBITDA margin is expected to be between 42% and 42.5%, with an adjusted diluted EPS of $0.77 to $0.83. Free cash flow is projected to be between $450 million and $500 million.
Explore the complete 8-K earnings release (here) from Clarivate PLC for further details.
