— Provides 2023 Outlook —
LONDON, March 1, 2023 /PRNewswire/ -- Clarivate Plc -
(NYSE: CLVT) (the "Company" or "Clarivate"), a global leader in
connecting people and organizations to intelligence they can trust,
today reported results for the fourth quarter and full year ended
December 31, 2022.
Fourth Quarter 2022 Financial Highlights
- Revenues of $675.3 million
increased 20.4%, and 25.2% at constant currency(1),
driven primarily by the acquisition of ProQuest
- Organic revenues(1) increased 0.5% as increases in
subscription revenues of 2.5% and re-occurring revenues of 2.5%
were partially offset by a decline in transactional and other
revenues of 5.9%
- Net income attributable to ordinary shares was $304.3 million compared to Net loss attributable
to ordinary shares of $130.4 million
in the prior year quarter driven by the gain from the MarkMonitor
divestiture; Net income per diluted share of $0.44 increased by $0.64
- Adjusted Net Income(1) of $164.0 million increased 0.5%; Adjusted Income
per diluted share(1) of $0.22 decreased 4.3% or $0.01
- Adjusted EBITDA(1) of $304.4
million increased 18.6% driven by earnings contributions
from acquisitions, organic growth and cost savings from integration
programs; Adjusted EBITDA Margin(1) of 45.1% decreased
70 basis points
Full Year 2022 Financial Highlights
- Revenues of $2,659.8 million
increased 41.7%, and 46.9% at constant currency(1),
driven primarily by the acquisition of ProQuest
- Organic revenues(1) increased 2.6% as increases in
subscription revenues of 3.4% and re-occurring revenues of 5.2%
were partially offset by a decline in transactional and other
revenues of 2.7%
- Net loss attributable to ordinary shares of $4,035.6 million increased $3,723.6 million due to the $4,449.1 million non-cash impairment of goodwill;
Net loss per diluted share of $6.24
increased by $5.63
- Adjusted Net Income(1) of $628.0 million increased 30.4%; Adjusted Income
per diluted share(1) of $0.85 increased 18.1% or $0.13
- Adjusted EBITDA(1) of $1,112.7 million increased 39.0% and Adjusted
EBITDA Margin(1) of 41.8% decreased 80 basis points
- Cash Flows from Operations increased $185.5 million to $509.3
million; Adjusted Free Cash Flow(1) increased
$62.4 million to $521.8 million
"2022 was a pivotal year for Clarivate as we made progress on
many fronts and transitioned the company for future achievements,"
said Jonathan Gear, Chief Executive
Officer. "We aligned our three operating segments to drive stronger
performance and unlock value, and we refined our growth
acceleration framework in order to capitalize on product and
service innovation. Our organic growth plan is now better
positioned to capture a larger piece of the $25 billion global market that we service. We
look forward to updating you on our progress and long-range plan
for growth at our upcoming Investor Day in New York on March
9."
Selected Financial Information
The results for the fourth quarter and full year 2022 include
contributions from our 2021 acquisitions of ProQuest, Patient
Connect, and Bioinfogate, compared to one month from ProQuest and
Patient Connect (December 2021) and
four months from Bioinfogate (August
2021) in the respective prior year periods.
|
Three Months
Ended
December 31,
|
|
Change
|
|
Year Ended
December 31,
|
|
Change
|
(in millions, except
percentages and per share
data), (unaudited)
|
2022
|
|
2021
|
|
$
|
|
%
|
|
2022
|
|
2021
|
|
$
|
|
%
|
Revenues,
net
|
$ 675.3
|
|
$ 560.7
|
|
$ 114.6
|
|
20.4 %
|
|
$
2,659.8
|
|
$
1,876.9
|
|
$ 782.9
|
|
41.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ordinary shares
|
$ 304.3
|
|
$
(130.4)
|
|
$ 434.7
|
|
333.4 %
|
|
$ (4,035.6)
|
|
$
(312.0)
|
|
$ (3,723.6)
|
|
N/M
|
Net income (loss) per
share, diluted
|
$
0.44
|
|
$
(0.20)
|
|
$
0.64
|
|
320.0 %
|
|
$
(6.24)
|
|
$
(0.61)
|
|
$
(5.63)
|
|
N/M
|
Weighted-average
ordinary shares (diluted)
|
731.0
|
|
654.9
|
|
—
|
|
11.6 %
|
|
678.6
|
|
640.8
|
|
—
|
|
5.9 %
|
Adjusted
EBITDA(1)
|
$ 304.4
|
|
$ 256.6
|
|
$
47.8
|
|
18.6 %
|
|
$
1,112.7
|
|
$ 800.4
|
|
$ 312.3
|
|
39.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income(1)
|
$ 164.0
|
|
$ 163.2
|
|
$
0.8
|
|
0.5 %
|
|
$ 628.0
|
|
$ 481.7
|
|
$ 146.3
|
|
30.4 %
|
Adjusted diluted
EPS(1)
|
$
0.22
|
|
$ 0.23
|
|
$
(0.01)
|
|
(4.3) %
|
|
$ 0.85
|
|
$ 0.72
|
|
$ 0.13
|
|
18.1 %
|
Adjusted
weighted-average ordinary shares (diluted)(2)
|
731.2
|
|
714.0
|
|
—
|
|
2.4 %
|
|
737.1
|
|
670.4
|
|
—
|
|
10.0 %
|
Net cash provided by
operating activities
|
$ 136.9
|
|
$ 18.3
|
|
$ 118.6
|
|
648.1 %
|
|
$ 509.3
|
|
$ 323.8
|
|
$ 185.5
|
|
57.3 %
|
Free cash
flow(1)
|
$
90.5
|
|
$
(14.1)
|
|
$ 104.6
|
|
741.8 %
|
|
$ 306.4
|
|
$ 205.2
|
|
$ 101.2
|
|
49.3 %
|
Adjusted free cash
flow(1)
|
$ 107.1
|
|
$ 143.8
|
|
$
(36.7)
|
|
(25.5) %
|
|
$ 521.8
|
|
$ 459.4
|
|
$ 62.4
|
|
13.6 %
|
(Amounts in tables may
not sum due to rounding)
|
|
(1) Non-GAAP
measure. Please see "Reconciliation to Certain Non-GAAP measures"
in this earnings release for important disclosures and
reconciliations
of these financial measures to the most directly comparable GAAP
measure. These terms are defined elsewhere in this earnings
release.
|
|
(2)
Calculated assuming a net income position compared to a net loss
position on the statement of operations for calculating Adjusted
diluted EPS.
|
|
Fourth Quarter 2022 Operating Results
Revenues, net for the fourth quarter increased $114.6 million, or 20.4%, to $675.3 million, and increased 25.2% on a constant
currency basis(1). The significant strengthening of the
U.S. dollar had a negative foreign exchange impact on revenue of
4.7% for the fourth quarter of 2022. Organic revenues(1)
increased $2.5 million or 0.5%, which
was partially offset by our decision to cease commercial operations
in Russia in March.
Subscription revenues for the fourth quarter increased
$93.6 million, or 30.6%, to
$399.1 million, and increased
35.2% on a constant currency basis(1), primarily driven
by the acquisition of ProQuest. Organic subscription
revenues(1) increased 2.5%, primarily due to price
increases and the benefit of net installations.
Re-occurring revenues for the fourth quarter decreased
$6.9 million, or 5.8% to
$112.7 million, and increased
2.5% on a constant currency basis(1). Organic
re-occurring revenues(1) increased 2.5%, primarily due
to increases in patent renewal volumes and improvements in yield
per case.
Transactional and other revenues for the fourth quarter
increased $28.5 million, or
21.1%, to $163.6 million, and
increased 23.1% on a constant currency basis(1),
primarily due to the acquisition of ProQuest. Organic transactional
and other revenues(1) decreased 5.9%, due to lower
transactional sales and consulting services revenue.
Full Year 2022 Operating Results
Revenues, net for the full year 2022 increased $782.9 million, or 41.7%, to $2,659.8 million, and increased 46.9% on a
constant currency basis(1). The significant
strengthening of the U.S. dollar had a negative foreign exchange
impact on revenue of 5.2% for the full year 2022. Organic
revenues(1) increased $47.8
million or 2.6%. Organic revenue was slightly impacted by
our decision to cease commercial operations in Russia in March
2022.
Subscription revenues for the full year 2022 increased
$585.4 million, or 56.6%, to
$1,619.8 million, and increased 61.4%
on a constant currency basis(1), primarily driven by the
acquisition of ProQuest. Organic subscription
revenues(1) increased 3.4%, primarily due to price
increases and the benefit of net installations.
Re-occurring revenues for the full year 2022 decreased
$11.3 million, or 2.5% to
$441.9 million, and increased 5.2% on
a constant currency basis(1). Organic re-occurring
revenues(1) increased 5.2%, primarily due to increases
in patent renewal volumes and improvements in yield per case.
Transactional and other revenues for the full year 2022
increased $205.8 million, or 52.3%,
to $599.1 million, and increased
55.4% on a constant currency basis(1), primarily due to
the acquisition of ProQuest. Organic transactional and other
revenues(1) decreased 2.7%, due to lower trademarks
transactional volumes and patent filing revenue.
Balance Sheet and Cash Flow
As of December 31, 2022, cash and
cash equivalents of $348.8 million
decreased $82.1 million compared to
December 31, 2021, driven by
principal payments on the Term Loan Facility, repurchases of
ordinary shares, and higher capital expenditures, partially offset
by the proceeds from the MarkMonitor divestiture. Restricted cash
decreased $148.7 million to
$8.0 million, compared to
December 31, 2021 primarily due to
2022 first quarter employee payroll payments related to the CPA
Global Equity Plan. The payments were funded by the December 2021 sale of shares held in the Employee
Benefit Trust established for the CPA Global Equity Plan.
The Company's total debt outstanding as of December 31, 2022 was $5,071.3 million, a decrease of $495.9 million compared to December 31, 2021.
Net cash provided by operating activities of $509.3 million for the year ended December 31, 2022 increased $185.5 million compared to $323.8 million for the prior year, primarily due
to higher earnings excluding the non-cash goodwill impairment
charge, as well as working capital timing. Adjusted free cash
flow(1) for the year ended December 31, 2022, was $521.8 million, an increase of $62.4 million compared to the prior year
period.
Outlook for 2023 (forward-looking statement)
"Our 2023 outlook reflects improved organic growth as we begin
to benefit from operational initiatives across the segments, which
will be partially offset by the divestiture of MarkMonitor in
November 2022," said Jonathan Collins, Executive Vice President and
Chief Financial Officer. "We currently expect to generate
significantly higher free cash flow as a result of lower one-time
costs even with increased capital investments to fuel product
innovation."
The full year outlook presented below assumes no further
acquisitions, divestitures, or unanticipated events.
|
2023
Outlook
|
Revenues
|
$2.63B
to $2.73B
|
Organic Revenue
Growth
|
2.75%
to 3.75%
|
Adjusted
EBITDA
|
$1.10B to
$1.16B
|
Adjusted EBITDA
Margin
|
42.0%
to 42.5%
|
Adjusted Diluted
EPS(3)
|
$0.75
to $0.85
|
Free Cash
Flow
|
$450M
to $550M
|
|
(3) Adjusted Diluted EPS for 2023 is
calculated based on approximately 740 million fully diluted
weighted average shares outstanding.
|
|
The outlook includes Non-GAAP measures. Please see
"Reconciliation to Certain Non-GAAP measures" presented below for
important disclosure and reconciliations of these financial
measures to the most directly comparable GAAP measures. These terms
are defined elsewhere in this earnings press release.
Conference Call and Webcast
Clarivate will host a conference call and webcast today to
review the results for the fourth quarter at 9:00 a.m. Eastern Time. The conference call will
be simultaneously webcast on the Investor Relations section of the
company's website.
Interested parties may access the live audio broadcast by
dialing +1 (844) 200-6205 in the United
States, +1 (929) 526-1599 for international, and +1 (833)
950-0062 in Canada. The conference
ID number is 217723. The webcast can be accessed at
https://events.q4inc.com/attendee/352264749 and will be available
for replay.
Use of Non-GAAP Financial Measures
Non-GAAP results are not presentations made 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, Free Cash Flow, Adjusted Free Cash Flow,
Standalone Adjusted EBITDA, organic revenue, organic subscription
revenue, organic re-occurring revenue and organic transactional and
other revenue 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.
We calculate constant currency by converting the non-U.S. dollar
income statement balances for the most current year to U.S. dollars
by applying the average exchange rates of the preceding year.
Forward-Looking Statements
This communication contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which express management's current views
concerning future business, events, trends, contingencies,
financial performance, or financial condition, appear at various
places in this communication and may use words like "aim,"
"anticipate," "assume," "believe," "continue," "could," "estimate,"
"expect," "forecast," "future," "goal," "intend," "likely," "may,"
"might," "plan," "potential," "predict," "project," "see," "seek,"
"should," "strategy," "strive," "target," "will," and "would" and
similar expressions, and variations or negatives of these words.
Examples of forward-looking statements include, among others,
statements we make regarding: guidance outlook and predictions
relating to expected operating results, such as revenue growth and
earnings; strategic actions such as acquisitions, joint ventures,
and dispositions, including the anticipated benefits therefrom, and
our success in integrating acquired businesses; anticipated levels
of capital expenditures in future periods; our ability to
successfully realize cost savings initiatives and transition
services expenses; our belief that we have sufficient liquidity to
fund our ongoing business operations; expectations of the effect on
our financial condition of claims, litigation, environmental costs,
the impact of inflation, the impact of foreign currency
fluctuations, the COVID-19 pandemic and governmental responses
thereto, international hostilities, contingent liabilities, and
governmental and regulatory investigations and proceedings; and our
strategy for customer retention, growth, product development,
market position, financial results, and reserves. Forward-looking
statements are neither historical facts nor assurances of future
performance. Instead, they are based only on management's current
beliefs, expectations, and assumptions regarding the future of our
business, future plans and strategies, projections, anticipated
events and trends, the economy, and other future conditions.
Because forward-looking statements relate to the future, they are
difficult to predict and many of which are outside of our control.
Important factors that could cause our actual results and financial
condition to differ materially from those indicated in the
forward-looking statements include those factors discussed under
the caption "Risk Factors" in our annual report on Form 10-K, along
with our other filings with the U.S. Securities and Exchange
Commission ("SEC"). However, those factors should not be considered
to be a complete statement of all potential risks and
uncertainties. Additional risks and uncertainties not known to us
or that we currently deem immaterial may also impair our business
operations. Forward-looking statements are based only on
information currently available to our management and speak only as
of the date of this communication. We do not assume any obligation
to publicly provide revisions or updates to any forward-looking
statements, whether as a result of new information, future
developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws. Please
consult our public filings with the SEC or on our website at
www.clarivate.com.
About Clarivate
Clarivate™ is a leading global information services provider. We
connect people and organizations to intelligence they can trust to
transform their perspective, their work and our world. Our
subscription and technology-based solutions are coupled with deep
domain expertise and cover the areas of Academia & Government,
Life Sciences & Healthcare and Intellectual Property. For more
information, please visit clarivate.com.
Consolidated Balance
Sheets
|
(In millions, except
share and per share data)
|
(unaudited)
|
|
|
December 31,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
348.8
|
|
$
430.9
|
Restricted
cash
|
8.0
|
|
156.7
|
Accounts receivable,
net
|
872.1
|
|
906.4
|
Prepaid
expenses
|
89.4
|
|
76.6
|
Other current
assets
|
76.9
|
|
66.6
|
Total current
assets
|
1,395.2
|
|
1,637.2
|
Property and equipment,
net
|
54.5
|
|
83.8
|
Other intangible
assets, net
|
9,437.7
|
|
10,392.4
|
Goodwill
|
2,876.5
|
|
7,904.9
|
Other non-current
assets
|
97.9
|
|
50.8
|
Deferred income
taxes
|
24.2
|
|
27.9
|
Operating lease
right-of-use assets
|
58.9
|
|
86.0
|
Total
Assets
|
$
13,944.9
|
|
$
20,183.0
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
101.4
|
|
$
129.2
|
Accrued
compensation
|
132.1
|
|
150.6
|
Accrued expenses and
other current liabilities
|
352.1
|
|
529.0
|
Current portion of
deferred revenues
|
947.5
|
|
1,030.4
|
Current portion of
operating lease liability
|
25.7
|
|
32.2
|
Current portion of
long-term debt
|
1.0
|
|
30.6
|
Total current
liabilities
|
1,559.8
|
|
1,902.0
|
Long-term
debt
|
5,005.0
|
|
5,456.3
|
Warrant
liabilities
|
21.0
|
|
227.8
|
Non-current portion of
deferred revenues
|
38.5
|
|
54.2
|
Other non-current
liabilities
|
119.1
|
|
142.7
|
Deferred income
taxes
|
316.1
|
|
380.1
|
Operating lease
liabilities
|
72.9
|
|
94.0
|
Total
liabilities
|
7,132.4
|
|
8,257.1
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Preferred Shares, no
par value; 14,375,000 shares authorized; 5.25% Mandatory
Convertible Preferred Shares, Series A, 14,375,000 shares issued
and outstanding as of both December 31, 2022 and December 31,
2021
|
1,392.6
|
|
1,392.6
|
Ordinary Shares, no
par value; unlimited shares authorized at December 31, 2022 and
December 31, 2021; 674,408,668 and 683,139,210 shares issued and
outstanding at December 31, 2022 and December 31, 2021,
respectively
|
11,744.7
|
|
11,827.9
|
Treasury shares, at
cost; 0 and 547,136 shares as of December 31, 2022 and December 31,
2021, respectively
|
—
|
|
(16.9)
|
Accumulated other
comprehensive (loss) income
|
(665.9)
|
|
326.7
|
Accumulated
deficit
|
(5,658.9)
|
|
(1,604.4)
|
Total shareholders'
equity
|
6,812.5
|
|
11,925.9
|
Total Liabilities
and Shareholders' Equity
|
$
13,944.9
|
|
$
20,183.0
|
Consolidated
Statement of Operations
|
(In millions, except
per share data)
|
(unaudited)
|
|
Three Months Ended
December 31,
|
|
2022
|
|
2021
|
Revenues,
net
|
$
675.3
|
|
$
560.7
|
Operating
expenses:
|
|
|
|
Cost of
revenues
|
237.0
|
|
187.8
|
Selling, general and
administrative costs
|
180.6
|
|
184.2
|
Depreciation and
amortization
|
188.8
|
|
145.2
|
Restructuring and
impairment
|
9.8
|
|
3.8
|
Goodwill
impairment
|
0.5
|
|
—
|
Other operating
(income) expense, net
|
(259.9)
|
|
7.8
|
Total operating
expenses
|
356.8
|
|
528.8
|
Income (loss) from
operations
|
318.5
|
|
31.9
|
Mark to market (gain)
loss on financial instruments
|
(4.1)
|
|
31.9
|
Interest expense and
amortization of debt discount, net
|
77.0
|
|
111.3
|
Income (loss) before
income taxes
|
245.6
|
|
(111.3)
|
(Benefit) provision
for income taxes
|
(77.8)
|
|
0.1
|
Net income
(loss)
|
323.4
|
|
(111.4)
|
Dividends on preferred
shares
|
19.1
|
|
19.1
|
Net income (loss)
attributable to ordinary shares
|
$
304.3
|
|
$
(130.4)
|
|
|
|
|
Per share:
|
|
|
|
Basic
|
$
0.45
|
|
$
(0.20)
|
Diluted
|
$
0.44
|
|
$
(0.20)
|
|
|
|
|
Weighted average shares
used to compute earnings per share:
|
|
|
|
Basic
|
674.2
|
|
654.9
|
Diluted
|
731.0
|
|
654.9
|
Consolidated
Statement of Operations
|
(In millions, except
per share data)
|
(unaudited)
|
|
|
Year Ended December
31,
|
|
2022
|
|
2021
|
Revenues,
net
|
$
2,659.8
|
|
$
1,876.9
|
Operating
expenses:
|
|
|
|
Cost of
revenues
|
954.0
|
|
626.1
|
Selling, general and
administrative costs
|
729.9
|
|
643.0
|
Depreciation and
amortization
|
710.5
|
|
537.8
|
Restructuring and
impairment
|
66.7
|
|
129.5
|
Goodwill
impairment
|
4,449.1
|
|
—
|
Other operating
(income) expense, net
|
(324.8)
|
|
27.5
|
Total operating
expenses
|
6,585.4
|
|
1,963.9
|
Income (loss) from
operations
|
(3,925.6)
|
|
(87.0)
|
Mark to market (gain)
loss on financial instruments
|
(206.8)
|
|
(81.3)
|
Interest expense and
amortization of debt discount, net
|
270.3
|
|
252.5
|
Income (loss) before
income taxes
|
(3,989.1)
|
|
(258.2)
|
(Benefit) provision
for income taxes
|
(28.9)
|
|
12.3
|
Net income
(loss)
|
(3,960.2)
|
|
(270.5)
|
Dividends on preferred
shares
|
75.4
|
|
41.5
|
Net income (loss)
attributable to ordinary shares
|
$
(4,035.6)
|
|
$
(312.0)
|
|
|
|
|
Per share:
|
|
|
|
Basic
|
$
(5.97)
|
|
$
(0.49)
|
Diluted
|
$
(6.24)
|
|
$
(0.61)
|
|
|
|
|
Weighted average shares
used to compute earnings per share:
|
|
|
|
Basic
|
676.1
|
|
631.0
|
Diluted
|
678.6
|
|
640.8
|
Consolidated
Statements of Cash Flows
|
(In
millions)
|
(unaudited)
|
|
|
Year Ended December
31,
|
|
2022
|
|
2021
|
Cash Flows From
Operating Activities
|
|
|
|
Net loss
|
$
(3,960.2)
|
|
$
(270.5)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
710.5
|
|
537.8
|
Deferred income
taxes
|
(54.3)
|
|
(13.3)
|
Share-based
compensation
|
93.9
|
|
33.3
|
Restructuring and
impairment, including Goodwill
|
4,478.5
|
|
48.2
|
Loss (gain) on foreign
currency forward contracts
|
1.2
|
|
6.9
|
Mark to market (gain)
loss on contingent shares
|
—
|
|
(25.1)
|
Mark to market (gain)
loss on financial instruments
|
(206.8)
|
|
(81.3)
|
Gain on sale from
divestitures
|
(278.5)
|
|
—
|
Amortization of debt
issuance costs
|
16.4
|
|
13.2
|
Other operating
activities
|
(19.5)
|
|
6.6
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(28.3)
|
|
(64.1)
|
Prepaid
expenses
|
(17.1)
|
|
2.7
|
Other
assets
|
(45.4)
|
|
27.7
|
Accounts
payable
|
(24.0)
|
|
31.2
|
Accrued expenses and
other current liabilities
|
(114.4)
|
|
85.9
|
Deferred
revenues
|
(9.3)
|
|
0.2
|
Operating lease right
of use assets
|
14.9
|
|
3.4
|
Operating lease
liabilities
|
(24.5)
|
|
(25.8)
|
Other
liabilities
|
(23.8)
|
|
6.8
|
Net cash provided by
operating activities
|
509.3
|
|
323.8
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Capital
expenditures
|
(202.9)
|
|
(118.5)
|
Payments for
acquisitions and cost method investments, net of cash
acquired
|
(24.8)
|
|
(3,930.3)
|
Proceeds from
divestitures, net of cash and restricted cash
|
285.0
|
|
4.3
|
Net cash provided by
(used in) investing activities
|
57.3
|
|
(4,044.5)
|
|
|
|
|
Cash Flows From
Financing Activities
|
|
|
|
Proceeds from issuance
of debt
|
—
|
|
2,000.0
|
Proceeds from
revolving credit facility
|
—
|
|
175.0
|
Redemption of Notes
not exchanged
|
—
|
|
(157.4)
|
Principal payments on
term loan
|
(321.5)
|
|
(28.6)
|
Repayments of
revolving credit facility
|
(175.0)
|
|
—
|
Payment of debt
issuance costs and discounts
|
(2.1)
|
|
(32.5)
|
Proceeds from issuance
of preferred shares
|
—
|
|
1,392.6
|
Proceeds from issuance
of ordinary shares
|
—
|
|
728.0
|
Proceeds from issuance
of treasury shares
|
5.7
|
|
139.9
|
Repurchases of
ordinary shares
|
(175.0)
|
|
(159.4)
|
Cash dividends on
preferred shares
|
(75.4)
|
|
(18.9)
|
Proceeds from stock
options exercised
|
0.9
|
|
18.6
|
Payments related to
finance lease
|
(1.9)
|
|
(0.2)
|
Payments related to tax
withholding for stock-based compensation
|
(14.9)
|
|
(24.9)
|
Net cash (used in)
provided by financing activities
|
(759.2)
|
|
4,032.2
|
Effects of exchange
rates
|
(38.2)
|
|
3.7
|
|
|
|
|
|
|
|
|
Net (decrease) increase
in cash and cash equivalents
|
$
(82.1)
|
|
$
173.1
|
Net (decrease) increase
in restricted cash
|
(148.7)
|
|
142.1
|
Net (decrease) increase
in cash and cash equivalents, and restricted cash
|
(230.8)
|
|
315.2
|
|
|
|
|
Beginning of
period:
|
|
|
|
Cash and cash
equivalents
|
$
430.9
|
|
$
257.7
|
Restricted
cash
|
156.7
|
|
14.7
|
Total cash and cash
equivalents, and restricted cash, beginning of period
|
587.6
|
|
272.4
|
|
|
|
|
End of
period:
|
|
|
|
Cash and cash
equivalents
|
348.8
|
|
430.9
|
Restricted
cash
|
8.0
|
|
156.7
|
Total cash and cash
equivalents, and restricted cash, end of period
|
$
356.8
|
|
$
587.6
|
|
|
|
|
Supplemental Cash Flow
Information:
|
|
|
|
Cash paid for
interest
|
$
251.5
|
|
$
182.4
|
Cash paid for income
tax
|
$
63.7
|
|
$
33.9
|
Capital expenditures
included in accounts payable
|
$
11.7
|
|
$
8.7
|
|
|
|
|
Non-Cash Financing
Activities:
|
|
|
|
Shares issued to Capri
Acquisition Topco Limited
|
—
|
|
5,052.2
|
Retirement of treasury
shares
|
(175.0)
|
|
(5,211.5)
|
Shares issued as
contingent stock consideration associated with the DRG
acquisition
|
—
|
|
61.6
|
Shares issued as
contingent stock consideration associated with the CPA Global
acquisition
|
—
|
|
43.9
|
Shares issued as
dividends on our 5.25% Series A Mandatory Convertible Preferred
Shares
|
—
|
|
16.1
|
Dividends accrued on
our 5.25% Series A Mandatory Convertible Preferred
Shares
|
6.5
|
|
6.5
|
Total Non-Cash
Financing Activities
|
$
(168.5)
|
|
$
(31.2)
|
|
Reconciliations to Certain Non-GAAP Measures
(Amounts in tables may not sum due to rounding)
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents net loss before the provision for
income taxes, depreciation and amortization, interest income and
expense adjusted to exclude the acquisition or disposal-related
transaction costs (such costs include net income from continuing
operations before provision for income taxes, depreciation and
amortization and interest income and expense from divestitures),
share-based compensation, mandatory convertible preferred share
dividend expense, unrealized foreign currency gains (losses),
transformational and restructuring expenses, acquisition-related
adjustments to deferred revenues prior to the adoption of FASB ASU
No. 2021-08 in 2021, non-operating income or expense, the impact of
certain non-cash mark-to-market adjustments on financial
instruments, legal settlements, goodwill impairment and other items
that are included in net income for the period that the Company
does not consider indicative of its ongoing operating performance
and certain unusual items impacting results in a particular period.
Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by
Revenues, net plus the impact of the deferred revenue purchase
accounting adjustments relating to acquisitions prior to 2021.
The following table presents our calculation of Adjusted EBITDA
for the three months ended and the years ended December 31, 2022 and 2021 and reconciles these
measures to our Net income (loss) for the same periods:
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
(in millions, except
percentages); (unaudited)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income (loss)
attributable to ordinary shares
|
$
304.3
|
|
$
(130.5)
|
|
$ (4,035.6)
|
|
$
(312.0)
|
Dividends on preferred
shares
|
19.1
|
|
19.1
|
|
75.4
|
|
41.5
|
Net income
(loss)
|
323.4
|
|
(111.4)
|
|
(3,960.2)
|
|
(270.5)
|
Provision for income
taxes
|
(77.8)
|
|
0.1
|
|
(28.9)
|
|
12.3
|
Depreciation and
amortization
|
188.8
|
|
145.2
|
|
710.5
|
|
537.8
|
Interest expense and
amortization of debt discount, net
|
77.0
|
|
111.3
|
|
270.3
|
|
252.5
|
Deferred revenues
adjustment(1)
|
0.1
|
|
(0.5)
|
|
1.0
|
|
4.0
|
Transaction related
costs(2)
|
6.1
|
|
38.8
|
|
14.2
|
|
46.2
|
Share-based
compensation expense
|
22.3
|
|
31.8
|
|
102.2
|
|
139.6
|
Gain on sale from
divestitures(3)
|
(278.5)
|
|
—
|
|
(278.5)
|
|
—
|
Restructuring and
impairment(4)
|
9.8
|
|
3.8
|
|
66.7
|
|
129.5
|
Goodwill
impairment
|
0.5
|
|
—
|
|
4,449.1
|
|
—
|
Mark-to-market (gain)
loss on financial instruments(5)
|
(4.1)
|
|
31.9
|
|
(206.8)
|
|
(81.3)
|
Other(6)
|
36.8
|
|
5.6
|
|
(26.9)
|
|
30.3
|
Adjusted
EBITDA
|
$
304.4
|
|
$
256.6
|
|
$
1,112.7
|
|
$
800.4
|
Adjusted EBITDA
Margin
|
45.1 %
|
|
45.8 %
|
|
41.8 %
|
|
42.6 %
|
|
(1) Reflects
the deferred revenues adjustment made as a result of purchase
accounting prior to the adoption of ASU No. 2021-08, "Accounting
for Contract Assets and Contract Liabilities from Contracts with
Customers". This guidance was applied retrospectively to all
business combinations for which the acquisition date occurs during
or subsequent to 2021.
|
(2) Includes
costs incurred to complete business combination transactions,
including acquisitions, dispositions and capital market activities
and include advisory, legal, and other professional and consulting
costs. The year ended 2021 also includes the mark-to-market
adjustment (gains) on the contingent stock consideration associated
with the CPA Global and DRG acquisitions.
|
(3) Represents the net gain from the
sale of the MarkMonitor Domain Management business.
|
(4)
Primarily reflects costs related to restructuring and impairment
associated with the One Clarivate, ProQuest and CPA Global
restructuring programs.
|
(5) Reflects
mark-to-market adjustments on financial instruments under ASC 815,
Derivatives and Hedging. Warrant instruments that do not
meet the criteria to be considered indexed to an entity's own stock
shall be initially classified as a liability at their estimated
fair values, regardless of the likelihood that such instruments
will ever be settled in cash. In periods subsequent to issuance,
changes in the estimated fair value of the liabilities are reported
through earnings.
|
(6)
Primarily reflects the net impact of foreign exchange gains and
losses related to the re-measurement of balances and other items
that do not reflect our ongoing operating performance.
|
|
Adjusted Net Income and Adjusted Diluted EPS
Adjusted Net Income is calculated using net income (loss),
adjusted to exclude acquisition or disposal-related transaction
costs (such costs include net income from continuing operations
before the provision for income taxes, depreciation and
amortization and interest income and expense from the divested
business), amortization related to acquired intangible assets,
share-based compensation, mandatory convertible preferred share
dividend expense, unrealized foreign currency gains/(losses),
transformational and restructuring expenses, acquisition-related
adjustments to deferred revenues prior to the adoption of FASB ASU
No. 2021-08 in 2021, the impact of certain non-cash mark-to-market
adjustments on financial instruments, interest on debt held in
escrow, goodwill impairment and other items that are included in
net income for the period that the Company does not consider
indicative of its ongoing operating performance and certain unusual
items impacting results in a particular period, and the income tax
impact of any adjustments. We calculate Adjusted Diluted EPS by
using Adjusted Net Income divided by adjusted diluted weighted
average shares for the period. The adjusted diluted weighted
average shares assumed that all instruments in the calculation are
dilutive.
The following tables presents our calculation of Adjusted Net
Income and Adjusted Diluted EPS for the three months ended and the
years ended December 31, 2022 and
2021 and reconciles these measures to our Net income (loss) and EPS
for the same periods:
|
Three Months
Ended
December
31,
|
|
Three Months
Ended
December
31,
|
|
2022
|
|
2021
|
(in millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net income (loss)
attributable to ordinary shares, diluted
|
$
323.4
|
|
$
0.44
|
|
$
(130.4)
|
|
$
(0.20)
|
Dividends on dilutive
preferred shares(1)
|
(19.1)
|
|
0.01
|
|
—
|
|
—
|
Net income (loss)
attributable to ordinary shares
|
304.3
|
|
0.45
|
|
(130.4)
|
|
(0.20)
|
Dividends on preferred
shares
|
19.1
|
|
(0.01)
|
|
19.1
|
|
0.03
|
Net income (loss) and
EPS
|
323.4
|
|
0.44
|
|
(111.4)
|
|
(0.17)
|
Deferred revenues
adjustment(2)
|
0.1
|
|
—
|
|
(0.5)
|
|
—
|
Transaction related
costs(3)
|
6.1
|
|
0.01
|
|
38.7
|
|
0.06
|
Share-based
compensation expense
|
22.3
|
|
0.03
|
|
31.8
|
|
0.05
|
Amortization related to
acquired intangible assets
|
142.5
|
|
0.19
|
|
117.4
|
|
0.18
|
Restructuring and
impairment(4)
|
9.8
|
|
0.01
|
|
3.8
|
|
0.01
|
Goodwill
impairment
|
0.5
|
|
—
|
|
—
|
|
—
|
Mark-to-market loss
(gain) on financial instruments(5)
|
(4.1)
|
|
(0.01)
|
|
31.9
|
|
0.05
|
Interest on new debt
held in escrow(6)
|
—
|
|
—
|
|
66.6
|
|
0.10
|
Other(7)
|
(241.7)
|
|
(0.32)
|
|
5.6
|
|
(0.02)
|
Income tax impact of
related adjustments
|
(94.9)
|
|
(0.13)
|
|
(20.7)
|
|
(0.03)
|
Adjusted net income
and Adjusted diluted EPS
|
$
164.0
|
|
$
0.22
|
|
$
163.2
|
|
$
0.23
|
Adjusted
weighted-average ordinary shares (Diluted)
|
731.2
|
|
714.0
|
|
|
|
|
|
|
|
|
(1) Reflects
the dilutive impact of mandatory convertible preferred shares under
the if-converted method during the period.
|
(2) Reflects
the deferred revenues adjustment made as a result of purchase
accounting prior to the adoption of ASU No. 2021-08, Accounting
for Contract Assets and Contract Liabilities from Contracts with
Customers. This guidance was applied retrospectively to all
business combinations for which the acquisition date occurs during
or subsequent to 2021.
|
(3) Includes
costs incurred to complete business combination transactions, which
was comprised of acquisitions, dispositions and capital market
activities, as well as advisory, legal, and other professional and
consulting costs.
|
(4)
Primarily reflects costs related to restructuring and impairment
associated with the One Clarivate, ProQuest and CPA Global
restructuring programs.
|
(5) Reflects
mark-to-market adjustments on financial instruments under ASC 815,
Derivatives and Hedging. Warrant instruments that do not
meet the criteria to be considered indexed to an entity's own stock
shall be initially classified as a liability at their estimated
fair values, regardless of the likelihood that such instruments
will ever be settled in cash. In periods subsequent to issuance,
changes in the estimated fair value of the liabilities are reported
through earnings.
|
(6) Reflects
interest expense incurred on secured and unsecured notes issued in
2021, while held in escrow pending the completion of the
acquisition of ProQuest on December 1, 2021. Clarivate used the net
proceeds to finance a portion of the purchase price and therefore
considers this interest expense as part of the transaction costs
associated with the acquisition.
|
(7) 2022
includes the $(278.5) net gain from the sale of the MarkMonitor
Domain Management business. The remaining amount primarily includes
the net impact of foreign exchange gains and losses related to the
re-measurement of balances and other items that do not reflect our
ongoing operating performance.
|
|
Year Ended December
31,
|
|
Year Ended December
31,
|
|
2022
|
|
2021
|
(in millions, except
per share amounts); (unaudited)
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
Net loss
attributable to ordinary shares, diluted
|
$
(4,233.2)
|
|
$
(6.24)
|
|
$
(393.3)
|
|
$
(0.61)
|
Change in fair value
of private placement warrants
|
197.6
|
|
0.29
|
|
81.3
|
|
0.12
|
Net loss attributable
to ordinary shares
|
(4,035.6)
|
|
(5.95)
|
|
(312.0)
|
|
(0.49)
|
Dividends on preferred
shares
|
75.4
|
|
0.11
|
|
41.5
|
|
0.06
|
Net loss
|
(3,960.2)
|
|
(5.84)
|
|
(270.5)
|
|
(0.41)
|
Deferred revenues
adjustment(1)
|
1.0
|
|
—
|
|
4.0
|
|
0.01
|
Transaction related
costs(2)
|
14.2
|
|
0.02
|
|
46.2
|
|
0.07
|
Share-based
compensation expense
|
102.2
|
|
0.15
|
|
139.6
|
|
0.21
|
Amortization related
to acquired intangible assets
|
579.6
|
|
0.85
|
|
450.5
|
|
0.67
|
Restructuring and
impairment(3)
|
66.7
|
|
0.10
|
|
129.5
|
|
0.19
|
Goodwill
impairment
|
4,449.1
|
|
6.56
|
|
—
|
|
—
|
Mark-to-market
adjustment on financial instruments(4)
|
(206.8)
|
|
(0.30)
|
|
(81.3)
|
|
(0.12)
|
Interest on debt held
in escrow(5)
|
—
|
|
—
|
|
95.8
|
|
0.14
|
Other(6)
|
(305.4)
|
|
(0.52)
|
|
30.3
|
|
0.05
|
Income tax impact of
related adjustments
|
(112.4)
|
|
(0.17)
|
|
(62.4)
|
|
(0.09)
|
Adjusted net income
and Adjusted diluted EPS
|
$
628.0
|
|
$
0.85
|
|
$
481.7
|
|
$
0.72
|
Adjusted
weighted-average ordinary shares (Diluted)
|
737.1
|
|
670.4
|
|
|
|
|
|
|
|
|
(1-6) Refer
to associated line item descriptions provided for the
quarter-to-date table above.
|
|
|
|
|
|
|
|
|
|
Free Cash Flow and Adjusted Free Cash Flow
Free cash flow is calculated using net cash provided by
operating activities less capital expenditures. Adjusted free cash
flow is calculated as free cash flow, less cash paid for
restructuring and lease-exit activities, payments related to the
CPA Global Equity Plan, transaction related costs, interest on debt
held in escrow, debt issuance costs, and other one-time payments
that the Company does not consider indicative of its ongoing
operating performance.
The following table reconciles our non-GAAP free cash flow and
Adjusted free cash flow measure to Net cash provided by operating
activities:
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
(in millions);
(unaudited)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net cash provided by
operating activities
|
$
136.9
|
|
$
18.3
|
|
$
509.3
|
|
$
323.8
|
Capital
expenditures
|
(46.4)
|
|
(32.3)
|
|
(202.9)
|
|
(118.5)
|
Free cash
flow
|
90.5
|
|
(14.1)
|
|
306.4
|
|
205.2
|
Cash paid for CPA
Global Equity Plan(1)
|
6.0
|
|
—
|
|
156.7
|
|
—
|
Cash paid for
restructuring costs(2)
|
8.5
|
|
14.5
|
|
41.9
|
|
80.3
|
Cash paid for
transaction related costs(3)
|
1.5
|
|
57.0
|
|
13.4
|
|
78.2
|
Cash paid for other
costs(4)
|
0.6
|
|
0.1
|
|
3.4
|
|
1.6
|
Cash paid for debt
issuance costs
|
—
|
|
50.0
|
|
—
|
|
57.8
|
Cash paid for interest
held in escrow(5)
|
—
|
|
36.3
|
|
—
|
|
36.3
|
Adjusted free cash
flow
|
$
107.1
|
|
$
143.8
|
|
$
521.8
|
|
$
459.4
|
(1) Includes
cash funded by a trust related to CPA Global Equity Plan payout
upon vesting.
|
(2) Reflects
cash payments for costs primarily related to restructuring and
lease-exit activities associated with the One Clarivate, ProQuest
and CPA Global restructuring programs.
|
(3) Includes
cash paid for costs incurred to complete business combination
transactions, which are comprised of acquisitions, dispositions and
capital market activities, as well as advisory, legal, and other
professional and consulting costs.
|
(4) Includes
cash paid for other costs that do not reflect our ongoing operating
performance.
|
(5) Reflects
the portion of cash paid on interest expense incurred on secured
and unsecured notes issued in 2021, while held in escrow pending
the completion of the acquisition of ProQuest on December 1, 2021.
Clarivate used the net proceeds to finance a portion of the
purchase price and therefore considers this interest expense as
part of the transaction costs associated with the
acquisition.
|
|
Required Reported Data
Standalone Adjusted EBITDA
We are required to report Standalone Adjusted EBITDA, which is
identical to Consolidated EBITDA and EBITDA as such terms are
defined under our credit facilities, dated as of October 31, 2019, and the indentures governing
our secured notes due 2026 issued by Camelot Finance S.A. and
guaranteed by certain of our subsidiaries, and the indentures
governing the secured and unsecured notes issued by Clarivate
Science Holdings Corporation in August
2021, respectively. In addition, the credit facilities and
the indentures contain certain restrictive covenants that govern
debt incurrence and the making of restricted payments, among other
matters. These restrictive covenants utilize Standalone Adjusted
EBITDA as a primary component of the compliance metric governing
our ability to undertake certain actions otherwise proscribed by
such covenants. Standalone Adjusted EBITDA reflects further
adjustments to Adjusted EBITDA for cost savings already
implemented.
Because Standalone Adjusted EBITDA is required pursuant to the
terms of the reporting covenants under the credit facilities and
the indentures and because this metric is relevant to lenders and
noteholders, management considers Standalone Adjusted EBITDA to be
relevant to the operation of its business.
Standalone Adjusted EBITDA is calculated under the credit
facilities and the indentures by using our Consolidated Net Loss
for the trailing 12-month period (defined in the credit facilities
and the indentures as our U.S. GAAP net income adjusted for certain
items specified in the credit facilities and the indentures)
adjusted for items including: taxes, interest expense, depreciation
and amortization, non-cash charges, including goodwill impairment,
expenses related to capital markets transactions, acquisitions and
dispositions, restructuring and business optimization charges and
expenses, consulting and advisory fees, run-rate cost savings to be
realized as a result of actions taken or to be taken in connection
with an acquisition, disposition, restructuring or cost savings or
similar initiatives, "run rate" expected cost savings, operating
expense reductions, restructuring charges and expenses and
synergies related to the transition projected by us, costs related
to any management or equity stock plan, other adjustments that were
presented in the offering memorandum used in connection with the
issuance of the secured notes due in 2026 and earnout obligations
incurred in connection with an acquisition or investment.
The following table bridges Net loss to Adjusted EBITDA to
Standalone Adjusted EBITDA, as Adjusted EBITDA reflects a
substantial portion of the adjustments that comprise Standalone
Adjusted EBITDA for the period presented:
(in millions);
(unaudited)
|
Year Ended
December 31, 2022
|
Net loss
attributable to ordinary shares
|
$
(4,035.6)
|
Dividends on preferred
shares
|
75.4
|
Net loss
|
(3,960.2)
|
Provision for income
taxes
|
(28.9)
|
Depreciation and
amortization
|
710.5
|
Interest expense and
amortization of debt discount, net
|
270.3
|
Deferred revenues
adjustment(1)
|
1.0
|
Transaction related
costs(2)
|
14.2
|
Share-based
compensation expense
|
102.2
|
Gain on sale from
divestitures(3)
|
(278.5)
|
Restructuring and
impairment(4)
|
66.7
|
Goodwill
impairment
|
4,449.1
|
Mark-to-market (gain)
loss on financial instruments(5)
|
(206.8)
|
Other(6)
|
(26.9)
|
Adjusted
EBITDA
|
$
1,112.7
|
Realized foreign
exchange gain
|
(14.3)
|
Cost
savings(7)
|
41.2
|
Standalone Adjusted
EBITDA
|
$
1,139.6
|
|
|
(1-6) Refer
to associated line item descriptions provided for the Adjusted
EBITDA table for the year ended December 31, 2022 above.
|
(7) Reflects
the estimated annualized run-rate cost savings, net of actual cost
savings realized, related to restructuring and other cost savings
initiatives undertaken during the period (exclusive of any cost
reductions in our estimated standalone operating costs), including
synergies related to acquisitions.
|
|
The foregoing adjustment (7) is an estimate and is not intended
to represent pro forma adjustments presented within the guidance of
Article 11 of Regulation S-X. Although we believe the estimate is
reasonable, actual results may differ from the estimate, and any
difference may be material. See cautionary statement regarding
Forward-Looking Statements.
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. We
calculate ACV on a constant currency basis to exclude the effect of
foreign currency fluctuations. The following table presents our
Annualized Contract Value ("ACV") as of the periods indicated.
|
December
31,
|
|
Change
|
(in millions, except
percentages); (unaudited)
|
2022
|
|
2021
|
|
2022 vs.
2021(1)
|
Annualized Contract
Value
|
$
1,581.9
|
|
$
1,611.8
|
|
(1.9) %
|
|
(1) The
change in ACV is primarily due to the acquisition of ProQuest in
December 2021 and the disposition of MarkMonitor in October 2022,
supplemented by organic ACV growth of 2.6%.
|
|
The following tables present the amounts of our subscription,
re-occurring and transactional and other revenues, including as a
percentage of our total revenues, for the periods indicated, as
well as the drivers of the variances between periods.
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Three Months
Ended
December 31,
|
|
Total
Variance
(Dollars)
|
Total
Variance
(Percentage)
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2022
|
|
2021
|
|
|
|
|
|
|
|
Subscription
revenues
|
$ 399.1
|
|
$ 305.5
|
|
$
93.6
|
30.6 %
|
36.6 %
|
(3.9) %
|
(4.5) %
|
2.5 %
|
Re-occurring
revenues
|
112.7
|
|
119.6
|
|
(6.9)
|
(5.8) %
|
— %
|
— %
|
(8.3) %
|
2.5 %
|
Transactional and other
revenues
|
163.6
|
|
135.1
|
|
28.5
|
21.1 %
|
29.5 %
|
(0.5) %
|
(2.0) %
|
(5.9) %
|
Deferred revenues
adjustment(1)
|
(0.1)
|
|
0.5
|
|
(0.6)
|
(120.0) %
|
(120.0) %
|
— %
|
— %
|
— %
|
Revenues,
net
|
$ 675.3
|
|
$ 560.7
|
|
$ 114.6
|
20.4 %
|
26.9 %
|
(2.2) %
|
(4.7) %
|
0.5 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects
the deferred revenues adjustment made as a result of purchase
accounting prior to the adoption of ASU No. 2021-08, Accounting
for Contract Assets and Contract Liabilities from Contracts with
Customers. In the fourth quarter of 2021, Clarivate adopted ASU
No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with ASC 606, Revenue from
Contracts with Customers, as if it had originated the
contracts. This guidance was applied retrospectively to all
business combinations for which the acquisition date occurs during
or subsequent to 2021.
|
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Year
Ended
December
31,
|
|
Total
Variance
(Dollars)
|
Total
Variance
(Percentage)
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2022
|
|
2021
|
|
|
|
|
|
|
|
Subscription
revenues
|
$
1,619.8
|
|
$
1,034.4
|
|
$ 585.4
|
56.6 %
|
59.2 %
|
(1.1) %
|
(4.9) %
|
3.4 %
|
Re-occurring
revenues
|
441.9
|
|
453.2
|
|
(11.3)
|
(2.5) %
|
— %
|
— %
|
(7.7) %
|
5.2 %
|
Transactional and other
revenues
|
599.1
|
|
393.3
|
|
205.8
|
52.3 %
|
58.3 %
|
(0.2) %
|
(3.1) %
|
(2.7) %
|
Deferred revenues
adjustment(1)
|
(1.0)
|
|
(4.0)
|
|
3.0
|
75.0 %
|
75.0 %
|
— %
|
— %
|
— %
|
Revenues,
net
|
$
2,659.8
|
|
$
1,876.9
|
|
$ 782.9
|
41.7 %
|
45.0 %
|
(0.7) %
|
(5.2) %
|
2.6 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects
the deferred revenues adjustment made as a result of purchase
accounting prior to the adoption of ASU No. 2021-08, Accounting
for Contract Assets and Contract Liabilities from Contracts with
Customers. In the fourth quarter of 2021, Clarivate adopted ASU
No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with ASC 606, Revenue from
Contracts with Customers, as if it had originated the
contracts. This guidance was applied retrospectively to all
business combinations for which the acquisition date occurs during
or subsequent to 2021.
|
|
The following tables and the discussion that follows present our
revenues by Segment for the periods indicated, as well as the
drivers of the variances between periods, including as a percentage
of such revenues.
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Three Months
Ended
December 31,
|
|
Total
Variance
(Dollars)
|
Total
Variance
(Percentage)
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2022
|
|
2021
|
|
|
|
|
|
|
|
Academia and
Government
|
$ 328.5
|
|
$ 186.1
|
|
$ 142.4
|
76.5 %
|
77.9 %
|
— %
|
(3.9) %
|
2.5 %
|
Life Sciences and
Healthcare
|
124.9
|
|
122.2
|
|
2.7
|
2.2 %
|
5.5 %
|
— %
|
(2.6) %
|
(0.7) %
|
Intellectual
Property
|
222.0
|
|
251.9
|
|
(29.9)
|
(11.9) %
|
— %
|
(5.0) %
|
(6.4) %
|
(0.5) %
|
Deferred revenues
adjustment(1)
|
(0.1)
|
|
0.5
|
|
(0.6)
|
(120.0) %
|
(120.0) %
|
— %
|
— %
|
— %
|
Revenues,
net
|
$ 675.3
|
|
$ 560.7
|
|
$ 114.6
|
20.4 %
|
26.9 %
|
(2.2) %
|
(4.7) %
|
0.5 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects
the deferred revenues adjustment made as a result of purchase
accounting prior to the adoption of ASU No. 2021-08, Accounting
for Contract Assets and Contract Liabilities from Contracts with
Customers. In the fourth quarter of 2021, Clarivate adopted ASU
No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with ASC 606 Revenue from
Contracts with Customers, as if it had originated the
contracts. This guidance was applied retrospectively to all
business combinations for which the acquisition date occurs during
or subsequent to 2021.
|
|
|
|
|
|
Variance
Increase/(Decrease)
|
Percentage of
Factors Increase/(Decrease)
|
|
Year
Ended
December
31,
|
|
Total
Variance
(Dollars)
|
Total
Variance
(Percentage)
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
(in millions, except
percentages); (unaudited)
|
2022
|
|
2021
|
|
|
|
|
|
|
|
Academia and
Government
|
$
1,280.1
|
|
$ 489.4
|
|
$ 790.7
|
161.6 %
|
164.7 %
|
— %
|
(4.9) %
|
1.8 %
|
Life Sciences and
Healthcare
|
452.6
|
|
413.3
|
|
39.3
|
9.5 %
|
8.6 %
|
— %
|
(3.2) %
|
4.1 %
|
Intellectual
Property
|
928.1
|
|
978.2
|
|
(50.1)
|
(5.1) %
|
— %
|
(1.3) %
|
(6.1) %
|
2.3 %
|
Deferred revenues
adjustment(1)
|
(1.0)
|
|
(4.0)
|
|
3.0
|
75.0 %
|
75.0 %
|
— %
|
— %
|
— %
|
Revenues,
net
|
$
2,659.8
|
|
$
1,876.9
|
|
$ 782.9
|
41.7 %
|
45.0 %
|
(0.7) %
|
(5.2) %
|
2.6 %
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects
the deferred revenues adjustment made as a result of purchase
accounting prior to the adoption of ASU No. 2021-08, Accounting
for Contract Assets and Contract Liabilities from Contracts with
Customers. In the fourth quarter of 2021, Clarivate adopted ASU
No. 2021-08 which allows an acquirer to account for the related
revenue contracts in accordance with ASC 606 Revenue from
Contracts with Customers, as if it had originated the
contracts. This guidance was applied retrospectively to all
business combinations for which the acquisition date occurs during
or subsequent to 2021.
|
|
The following table presents our calculation of Revenues, net
for the 2023 outlook:
|
|
|
|
|
Variance
Increase / (Decrease)
|
Percentage of
Factors Increase / (Decrease)
|
|
Year Ending December
31,
|
|
Total
Variance
(Dollars)
|
Total
Variance
(Percentage)
|
Acquisitions
|
Disposals
|
FX
Impact
|
Organic
|
(in
millions)
|
2023
Outlook
mid-point
|
|
2022
|
|
|
|
|
|
|
|
Revenues,
net
|
$
2,680
|
|
$
2,660
|
|
$
20
|
0.8 %
|
— %
|
(2.4) %
|
(0.1) %
|
3.3 %
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents our calculation of Adjusted EBITDA
for the 2023 outlook and reconciles this measure to our Net income
(loss) for the same period:
|
Year Ending December
31, 2023
(Forecasted)
|
(in
millions)
|
Low
|
|
High
|
Net loss
attributable to ordinary shares
|
$
(207)
|
|
$
(147)
|
Dividends on preferred
shares(1)
|
75
|
|
75
|
Net loss
|
(131)
|
|
(71)
|
Provision for income
taxes
|
70
|
|
70
|
Depreciation and
amortization
|
720
|
|
720
|
Interest expense and
amortization of debt discount, net
|
286
|
|
286
|
Restructuring and
impairment(2)
|
25
|
|
25
|
Share-based
compensation expense
|
130
|
|
130
|
Adjusted
EBITDA
|
$
1,100
|
|
$
1,160
|
Adjusted EBITDA
margin
|
42.0 %
|
|
42.5 %
|
|
|
|
|
(1) Dividends on our mandatory
convertible preferred shares ("MCPS") are payable quarterly at an
annual rate of 5.25% of the liquidation preference of $100 per
share. For the purposes of calculating net loss attributable to
Clarivate, we have excluded the accrued and anticipated MCPS
dividends.
|
(2)
Primarily reflects restructuring costs expected to be incurred in
2023 associated with the ProQuest acquisition restructuring
program.
|
|
The following table presents our calculation of Adjusted Diluted
EPS for the 2023 outlook and reconciles this measure to our Net
income (loss) per share for the same period:
|
Year Ending December
31, 2023
(Forecasted)
|
|
Low
|
|
High
|
|
Per
Share
|
|
Per
Share
|
Net loss
attributable to ordinary shares
|
$
(0.28)
|
|
$
(0.20)
|
Dividends on preferred
shares(1)
|
0.10
|
|
0.10
|
Net loss
|
(0.18)
|
|
(0.10)
|
Restructuring and
impairment(2)
|
0.03
|
|
0.03
|
Share-based
compensation expense
|
0.18
|
|
0.18
|
Amortization related to
acquired intangible assets
|
0.77
|
|
0.77
|
Other
|
(0.01)
|
|
0.01
|
Income tax impact of
related adjustments
|
(0.05)
|
|
(0.05)
|
Adjusted Diluted
EPS
|
$
0.75
|
|
$
0.85
|
Adjusted
weighted-average ordinary shares (Diluted)(3)
|
740 million
|
|
|
|
|
(1)
Dividends on our mandatory convertible preferred shares ("MCPS")
are payable quarterly at an annual rate of 5.25% of the liquidation
preference of $100 per share. For the purposes of calculating net
loss attributable to Clarivate, we have excluded the accrued and
anticipated MCPS dividends.
|
(2)
Primarily reflects restructuring costs expected to be incurred in
2023 associated with the ProQuest acquisition restructuring
program.
|
(3) For the
purposes of calculating adjusted earnings per share, the Company
has excluded the accrued and anticipated MCPS dividends and assumed
the "if-converted" method of share dilution.
|
|
The following table presents our calculation of Free cash flow
for the 2023 outlook and reconciles this measure to our Net cash
provided by operating activities for the same period:
|
Year Ending December
31, 2023
(Forecasted)
|
(in
millions)
|
Low
|
|
High
|
Net cash provided by
operating activities
|
$
690
|
|
$
790
|
Capital
expenditures
|
(240)
|
|
(240)
|
Free cash
flow
|
$
450
|
|
$
550
|
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