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. |
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 |
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 | |||||||||
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 |
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) |
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. |
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. | |||||||||||||||||||||||
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. |
(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. |
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%. |
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. |
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. |
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 | % |
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. | |||||||||||
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. |
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 | |||||||