Three Months Ended June 30, | Change | Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
(in millions, except percentages and per share data), (unaudited) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues, net | $ | 686.6 | $ | 445.7 | $ | 240.9 | 54.0 | % | $ | 1,348.8 | $ | 874.1 | $ | 474.7 | 54.3 | % | |||||||||||||||||||||||||||||||
Annualized Contract Value (ACV) | $ | 1,625.9 | $ | 924.4 | $ | 701.5 | 75.9 | % | $ | 1,625.9 | $ | 924.4 | $ | 701.5 | 75.9 | % | |||||||||||||||||||||||||||||||
Net income (loss) attributable to ordinary shares | $ | 43.7 | $ | (131.5) | $ | 175.2 | 133.2 | % | $ | 94.5 | $ | (187.5) | $ | 282.0 | 150.4 | % | |||||||||||||||||||||||||||||||
Net income (loss) per share, diluted | $ | 0.00 | $ | (0.22) | $ | 0.22 | 100.0 | % | $ | (0.07) | $ | (0.35) | $ | 0.28 | 80.0 | % | |||||||||||||||||||||||||||||||
Weighted-average shares outstanding (diluted) | 678.4 | 611.1 | — | 11.0 | % | 683.2 | 617.1 | — | 10.7 | % | |||||||||||||||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 274.4 | $ | 189.0 | $ | 85.4 | 45.2 | % | $ | 536.7 | $ | 353.8 | $ | 182.9 | 51.7 | % | |||||||||||||||||||||||||||||||
Adjusted net income (loss)(1) | $ | 165.1 | $ | 110.0 | $ | 55.1 | 50.1 | % | $ | 320.2 | $ | 198.4 | $ | 121.8 | 61.4 | % | |||||||||||||||||||||||||||||||
Adjusted diluted EPS(1) | $ | 0.22 | $ | 0.17 | $ | 0.05 | 29.4 | % | $ | 0.43 | $ | 0.31 | $ | 0.12 | 38.7 | % | |||||||||||||||||||||||||||||||
Weighted-average ordinary shares (diluted)(2) | 736.6 | 641.4 | — | 14.8 | % | 741.6 | 633.1 | — | 17.1 | % | |||||||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 97.2 | $ | 87.6 | $ | 9.6 | 11.0 | % | $ | 164.6 | $ | 261.7 | $ | (97.1) | (37.1) | % | |||||||||||||||||||||||||||||||
Free cash flow(1) | $ | 49.5 | $ | 58.6 | $ | (9.1) | (15.5) | % | $ | 75.5 | $ | 199.7 | $ | (124.2) | (62.2) | % | |||||||||||||||||||||||||||||||
Adjusted free cash flow(1) | $ | 66.8 | $ | 95.2 | $ | (28.4) | (29.8) | % | $ | 258.1 | $ | 258.5 | $ | (0.4) | (0.2) | % | |||||||||||||||||||||||||||||||
(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 net income and Adjusted diluted EPS. |
Updated 2022 Outlook | Prior 2022 Outlook | |||||||
Revenues | $2.70B to $2.76B | $2.80B to $2.88B | ||||||
Adjusted EBITDA | $1.12B to $1.16B | $1.16B to $1.22B | ||||||
Adjusted EBITDA margin | 41% to 42% | 41% to 42% | ||||||
Adjusted Diluted EPS(3) | $0.80 to $0.90 | $0.85 to $0.95 | ||||||
Adjusted Free Cash Flow | $600M to $650M | $675M to $725M |
June 30, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 359.7 | $ | 430.9 | |||||||
Restricted cash | 13.2 | 156.7 | |||||||||
Accounts receivable, net | 812.4 | 906.4 | |||||||||
Prepaid expenses | 102.1 | 76.6 | |||||||||
Other current assets | 72.8 | 66.6 | |||||||||
Total current assets | 1,360.2 | 1,637.2 | |||||||||
Property and equipment, net | 76.8 | 83.8 | |||||||||
Other intangible assets, net | 9,697.3 | 10,392.4 | |||||||||
Goodwill | 7,533.7 | 7,904.9 | |||||||||
Other non-current assets | 71.3 | 50.8 | |||||||||
Deferred income taxes | 28.2 | 27.9 | |||||||||
Operating lease right-of-use assets | 68.6 | 86.0 | |||||||||
Total Assets | $ | 18,836.1 | $ | 20,183.0 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 116.7 | $ | 129.2 | |||||||
Accrued expenses and other current liabilities | 501.1 | 679.6 | |||||||||
Current portion of deferred revenues | 956.7 | 1,030.4 | |||||||||
Current portion of operating lease liability | 29.9 | 32.2 | |||||||||
Current portion of long-term debt | 57.1 | 30.6 | |||||||||
Total current liabilities | 1,661.5 | 1,902.0 | |||||||||
Long-term debt | 5,421.5 | 5,456.3 | |||||||||
Warrant liabilities | 78.4 | 227.8 | |||||||||
Non-current portion of deferred revenues | 50.3 | 54.2 | |||||||||
Other non-current liabilities | 136.7 | 142.7 | |||||||||
Deferred income taxes | 366.0 | 380.1 | |||||||||
Operating lease liabilities | 81.0 | 94.0 | |||||||||
Total liabilities | 7,795.4 | 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 June 30, 2022 and December 31, 2021 | 1,392.6 | 1,392.6 | |||||||||
Ordinary Shares, no par value; unlimited shares authorized at June 30, 2022 and December 31, 2021; 673,821,721 and 683,139,210 shares issued, and 673,316,307 and 683,139,210 shares outstanding at June 30, 2022 and December 31, 2021, respectively | 11,700.9 | 11,827.9 | |||||||||
Treasury shares, at cost; 505,414 and 547,136 shares as of June 30, 2022 and December 31, 2021, respectively | (15.6) | (16.9) | |||||||||
Accumulated other comprehensive (loss) income | (519.2) | 326.7 | |||||||||
Accumulated deficit | (1,518.0) | (1,604.4) | |||||||||
Total shareholders’ equity | 11,040.7 | 11,925.9 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 18,836.1 | $ | 20,183.0 |
Condensed Consolidated Statement of Operations | |||||||||||
(In millions, except share and per share data) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Revenues, net | $ | 686.6 | $ | 445.7 | |||||||
Operating expenses: | |||||||||||
Cost of revenues | 244.1 | 149.7 | |||||||||
Selling, general and administrative costs | 186.1 | 179.7 | |||||||||
Depreciation and Amortization | 175.6 | 130.3 | |||||||||
Restructuring and impairment | 19.2 | 50.7 | |||||||||
Other operating (income) expense, net | (24.6) | (0.9) | |||||||||
Total operating expenses | 600.4 | 509.5 | |||||||||
Income (loss) from operations | 86.2 | (63.8) | |||||||||
Mark to market (gain) loss on financial instruments | (49.0) | 21.0 | |||||||||
Income (loss) before interest expense and income taxes | 135.2 | (84.8) | |||||||||
Interest expense and amortization of debt discount, net | 62.3 | 38.5 | |||||||||
Income (loss) before income taxes | 72.9 | (123.3) | |||||||||
Provision for income taxes | 10.5 | 8.2 | |||||||||
Net income (loss) | 62.4 | (131.5) | |||||||||
Dividends on preferred shares | 18.7 | — | |||||||||
Net income (loss) attributable to ordinary shares | $ | 43.7 | $ | (131.5) | |||||||
Per share: | |||||||||||
Basic | $ | 0.06 | $ | (0.22) | |||||||
Diluted | $ | — | $ | (0.22) | |||||||
Weighted average shares used to compute earnings per share: | |||||||||||
Basic | 674,256,004 | 611,093,882 | |||||||||
Diluted | 678,372,059 | 611,093,882 |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Revenues, net | $ | 1,348.8 | $ | 874.1 | |||||||
Operating expenses: | |||||||||||
Cost of revenues | 493.3 | 297.6 | |||||||||
Selling, general and administrative costs | 379.8 | 314.0 | |||||||||
Depreciation and amortization | 352.0 | 261.9 | |||||||||
Restructuring and impairment | 30.9 | 118.6 | |||||||||
Other operating (income) expense, net | (38.3) | 15.3 | |||||||||
Total operating expenses | 1,217.7 | 1,007.4 | |||||||||
Income (loss) from operations | 131.1 | (133.3) | |||||||||
Mark to market gain on financial instruments | (149.4) | (30.2) | |||||||||
Income (loss) before interest expense and income taxes | 280.5 | (103.1) | |||||||||
Interest expense and amortization of debt discount, net | 121.8 | 75.9 | |||||||||
Income (loss) before income taxes | 158.7 | (179.0) | |||||||||
Provision for income taxes | 26.8 | 8.5 | |||||||||
Net income (loss) | 131.9 | (187.5) | |||||||||
Dividends on preferred shares | 37.4 | — | |||||||||
Net income (loss) attributable to ordinary shares | $ | 94.5 | $ | (187.5) | |||||||
Per share: | |||||||||||
Basic | $ | 0.14 | $ | (0.31) | |||||||
Diluted | $ | (0.07) | $ | (0.35) | |||||||
Weighted average shares used to compute earnings per share: | |||||||||||
Basic | 678,348,003 | 606,795,733 | |||||||||
Diluted | 683,167,949 | 617,138,407 |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash Flows From Operating Activities | |||||||||||
Net income (loss) | $ | 131.9 | $ | (187.5) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 352.0 | 261.9 | |||||||||
Deferred income taxes | (0.9) | (0.6) | |||||||||
Share-based compensation | 47.2 | 18.8 | |||||||||
Restructuring and impairment | (1.0) | 69.6 | |||||||||
Loss (gain) on foreign currency forward contracts | 5.7 | (1.9) | |||||||||
Mark to market adjustment on contingent shares | — | (25.1) | |||||||||
Mark to market gain on financial instruments | (149.4) | (30.2) | |||||||||
Amortization of debt issuance costs | 7.6 | 4.7 | |||||||||
Other operating activities | (39.3) | 9.0 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 53.8 | 108.7 | |||||||||
Prepaid expenses | (26.9) | (7.9) | |||||||||
Other assets | (24.8) | 51.9 | |||||||||
Accounts payable | (8.8) | 5.9 | |||||||||
Accrued expenses and other current liabilities | (150.3) | 49.6 | |||||||||
Deferred revenues | (29.5) | (38.3) | |||||||||
Operating lease right of use assets | 14.5 | 11.8 | |||||||||
Operating lease liabilities | (11.1) | (40.3) | |||||||||
Other liabilities | (6.1) | 1.6 | |||||||||
Net cash provided by operating activities | 164.6 | 261.7 | |||||||||
Cash Flows From Investing Activities | |||||||||||
Capital expenditures | (89.1) | (62.0) | |||||||||
Acquisitions, net of cash acquired | (9.3) | 0.4 | |||||||||
Acquisition of cost method investment | (5.0) | — | |||||||||
Net cash used in investing activities | (103.4) | (61.6) | |||||||||
Cash Flows From Financing Activities | |||||||||||
Proceeds from issuance of debt | — | 2,000.0 | |||||||||
Principal payments on term loan | (14.3) | (14.3) | |||||||||
Payment of debt issuance costs and discounts | (2.1) | (4.4) | |||||||||
Proceeds from issuance of preferred shares | — | 1,393.2 | |||||||||
Proceeds from issuance of ordinary shares | — | 728.8 | |||||||||
Proceeds from issuance of treasury shares | 0.9 | — | |||||||||
Repurchases of ordinary shares | (175.0) | — | |||||||||
Cash dividends on preferred shares | (37.7) | — | |||||||||
Proceeds from stock options exercised | 0.5 | 14.8 | |||||||||
Payments related to finance lease | (1.0) | — | |||||||||
Payments related to tax withholding for stock-based compensation | (10.7) | (21.7) | |||||||||
Net cash (used in) provided by financing activities | (239.4) | 4,096.4 | |||||||||
Effects of exchange rates | (36.5) | 5.0 | |||||||||
Net (decrease) increase in cash and cash equivalents | (71.2) | 2,301.9 | |||||||||
Net (decrease) increase in restricted cash | (143.5) | 1,999.6 | |||||||||
Net (decrease) increase in cash and cash equivalents, and restricted cash | (214.7) | 4,301.5 | |||||||||
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 | 359.7 | 2,559.6 | |||||||||
Restricted cash | 13.2 | 2,014.3 | |||||||||
Total cash and cash equivalents, and restricted cash, end of period | $ | 372.9 | $ | 4,573.9 | |||||||
Supplemental Cash Flow Information: | |||||||||||
Cash paid for interest | 113.4 | 69.7 | |||||||||
Cash paid for income tax | 23.7 | 12.6 | |||||||||
Capital expenditures included in accounts payable | 23.8 | 3.8 | |||||||||
Non-Cash Financing Activities: | |||||||||||
Shares issued to Capri Acquisition Topco Limited | — | 5,052.2 | |||||||||
Retirement of treasury shares | (175.0) | (5,052.2) | |||||||||
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 | |||||||||
Dividends accrued on our 5.25% Series A Mandatory Convertible Preferred Shares | 6.2 | — | |||||||||
Total Non-Cash Financing Activities | $ | (168.8) | $ | 105.5 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions); (unaudited) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net income (loss) attributable to ordinary shares | $ | 43.7 | $ | (131.5) | $ | 94.5 | $ | (187.5) | |||||||||||||||
Dividends on preferred shares | 18.7 | — | 37.4 | — | |||||||||||||||||||
Net income (loss) | 62.4 | (131.5) | 131.9 | (187.5) | |||||||||||||||||||
Provision for income taxes | 10.5 | 8.2 | 26.8 | 8.5 | |||||||||||||||||||
Depreciation and amortization | 175.6 | 130.3 | 352.0 | 261.9 | |||||||||||||||||||
Interest expense and amortization of debt discount, net | 62.3 | 38.5 | 121.8 | 75.9 | |||||||||||||||||||
Deferred revenues adjustment(1) | 0.8 | 1.4 | 0.6 | 4.4 | |||||||||||||||||||
Transaction related costs(2) | 5.1 | 13.9 | 11.8 | (9.0) | |||||||||||||||||||
Share-based compensation expense | 22.1 | 58.2 | 59.1 | 97.2 | |||||||||||||||||||
Restructuring and impairment(3) | 19.2 | 50.7 | 30.9 | 118.6 | |||||||||||||||||||
Mark-to-market (gain) loss on financial instruments(4) | (49.0) | 21.0 | (149.4) | (30.2) | |||||||||||||||||||
Other(5) | (34.6) | (1.7) | (48.8) | 14.0 | |||||||||||||||||||
Adjusted EBITDA | $ | 274.4 | $ | 189.0 | $ | 536.7 | $ | 353.8 | |||||||||||||||
Adjusted EBITDA Margin | 39.9 | % | 42.3 | % | 39.8 | % | 40.3 | % | |||||||||||||||
(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. | |||||||||||||||||||||||
(2) Includes costs incurred to complete business combination transactions, which were comprised of acquisitions, dispositions and capital market activities, as well as advisory, legal, and other professional and consulting costs. | |||||||||||||||||||||||
(3) Primarily reflects costs related to restructuring and impairment associated with One Clarivate, ProQuest and CPA Global Programs. The costs associated with the CPA Global program were substantially complete as of June 30, 2022. | |||||||||||||||||||||||
(4) 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. | |||||||||||||||||||||||
(5) Includes primarily 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 June 30, | Three Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(in millions, except shares and per share amounts); (unaudited) | Amount | Per Share | Amount | Per Share | |||||||||||||||||||
Net loss attributable to ordinary shares, diluted | $ | (3.1) | $ | — | $ | (131.5) | $ | (0.22) | |||||||||||||||
Change in fair value of private placement warrants | 46.8 | 0.07 | — | — | |||||||||||||||||||
Net income (loss) attributable to ordinary shares | 43.7 | 0.06 | (131.5) | (0.22) | |||||||||||||||||||
Dividends on preferred shares | 18.7 | 0.03 | — | — | |||||||||||||||||||
Net income (loss) | 62.4 | 0.09 | (131.5) | (0.22) | |||||||||||||||||||
Deferred revenues adjustment(1) | 0.8 | — | 1.4 | — | |||||||||||||||||||
Transaction related costs(2) | 5.1 | 0.01 | 13.9 | 0.02 | |||||||||||||||||||
Share-based compensation expense | 22.1 | 0.03 | 58.2 | 0.09 | |||||||||||||||||||
Amortization related to acquired intangible assets | 146.1 | 0.20 | 111.2 | 0.17 | |||||||||||||||||||
Restructuring and impairment(3) | 19.2 | 0.03 | 50.7 | 0.08 | |||||||||||||||||||
Mark-to-market loss (gain) on financial instruments(4) | (49.0) | (0.07) | 21.0 | 0.03 | |||||||||||||||||||
Interest on new debt held in escrow(6) | — | — | 1.4 | — | |||||||||||||||||||
Other(5) | (34.6) | (0.05) | (1.7) | — | |||||||||||||||||||
Income tax impact of related adjustments | (7.0) | (0.01) | (14.8) | (0.02) | |||||||||||||||||||
Adjusted net income and Adjusted diluted EPS | $ | 165.1 | $ | 0.22 | $ | 110.0 | $ | 0.17 | |||||||||||||||
Adjusted weighted-average ordinary shares (Diluted) | 736,571,630 | 641,356,463 | |||||||||||||||||||||
(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. | |||||||||||||||||||||||
(2) 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. | |||||||||||||||||||||||
(3) Primarily reflects costs related to restructuring and impairment associated with One Clarivate, ProQuest and CPA Global Programs. The costs associated with the CPA Global program were substantially complete as of June 30, 2022. | |||||||||||||||||||||||
(4) 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. | |||||||||||||||||||||||
(5) Includes primarily 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. | |||||||||||||||||||||||
(6) Reflects interest expense incurred on the principal related to the 2021 debt offering, that was held in escrow until 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, considered as part of the transaction costs associated with the acquisition. | |||||||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(in millions, except shares and per share amounts); (unaudited) | Amount | Per Share | Amount | Per Share | |||||||||||||||||||
Net loss attributable to ordinary shares, diluted | $ | (47.2) | $ | (0.07) | $ | (217.6) | $ | (0.35) | |||||||||||||||
Change in fair value of private placement warrants | (141.7) | (0.21) | (30.1) | (0.05) | |||||||||||||||||||
Net income (loss) attributable to ordinary shares | 94.5 | 0.14 | (187.5) | (0.31) | |||||||||||||||||||
Dividends on preferred shares | 37.4 | 0.05 | — | — | |||||||||||||||||||
Net income (loss) | 131.9 | 0.19 | (187.5) | (0.31) | |||||||||||||||||||
Deferred revenues adjustment(1) | 0.6 | — | 4.4 | 0.01 | |||||||||||||||||||
Transaction related costs(2) | 11.8 | 0.02 | (9.0) | (0.01) | |||||||||||||||||||
Share-based compensation expense | 59.1 | 0.08 | 97.2 | 0.15 | |||||||||||||||||||
Amortization related to acquired intangible assets | 295.8 | 0.40 | 222.1 | 0.35 | |||||||||||||||||||
Restructuring and impairment(3) | 30.9 | 0.04 | 118.6 | 0.19 | |||||||||||||||||||
Mark-to-market adjustment on financial instruments(4) | (149.4) | (0.20) | (30.2) | (0.05) | |||||||||||||||||||
Interest on debt held in escrow(6) | — | — | 1.4 | — | |||||||||||||||||||
Other(5) | (48.8) | (0.07) | 14.0 | 0.02 | |||||||||||||||||||
Income tax impact of related adjustments | (11.7) | (0.02) | (32.6) | (0.05) | |||||||||||||||||||
Adjusted net income and Adjusted Diluted EPS | $ | 320.2 | $ | 0.43 | $ | 198.4 | $ | 0.31 | |||||||||||||||
Adjusted weighted-average ordinary shares (Diluted) | 741,624,264 | 633,109,171 | |||||||||||||||||||||
(1-6) Refer to associated line item descriptions provided for the quarter-to-date table above. | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions); (unaudited) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net cash provided by operating activities | $ | 97.2 | $ | 87.6 | $ | 164.6 | $ | 261.7 | |||||||||||||||
Capital expenditures | (47.7) | (29.0) | (89.1) | (62.0) | |||||||||||||||||||
Free cash flow | 49.5 | 58.6 | 75.5 | 199.7 | |||||||||||||||||||
Cash paid for CPA Global Equity Plan(1) | 0.9 | — | 150.7 | — | |||||||||||||||||||
Cash paid for restructuring costs(2) | 11.6 | 32.7 | 21.7 | 48.7 | |||||||||||||||||||
Cash paid for transaction related costs(3) | 3.4 | 3.6 | 7.9 | 8.8 | |||||||||||||||||||
Cash paid for other costs(4) | 1.4 | 0.3 | 2.3 | 1.3 | |||||||||||||||||||
Adjusted free cash flow | $ | 66.8 | $ | 95.2 | $ | 258.1 | $ | 258.5 | |||||||||||||||
(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 Programs. The costs associated with the CPA Global program were substantially complete as of June 30, 2022. | |||||||||||||||||||||||
(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. | |||||||||||||||||||||||
Twelve Months Ended June 30, | |||||
(in millions); (unaudited) | 2022 | ||||
Net loss attributable to ordinary shares | $ | (29.9) | |||
Dividends on preferred shares | 78.9 | ||||
Net income | 49.0 | ||||
Provision for income taxes | 30.6 | ||||
Depreciation and amortization | 628.0 | ||||
Interest expense and amortization of debt discount, net | 298.3 | ||||
Deferred revenues adjustment(1) | 0.2 | ||||
Transaction related costs(2) | 67.0 | ||||
Share-based compensation expense | 101.5 | ||||
Restructuring and impairment(3) | 41.8 | ||||
Mark-to-market (gain) loss on financial instruments(4) | (200.5) | ||||
Other(5) | (32.6) | ||||
Adjusted EBITDA | $ | 983.3 | |||
Realized foreign exchange loss | 13.7 | ||||
ProQuest Adjusted EBITDA impact(6) | 115.0 | ||||
Patient Connect Adjusted EBITDA impact(6) | (0.5) | ||||
Cost savings(7) | 85.8 | ||||
Standalone Adjusted EBITDA | $ | 1,197.3 | |||
(1-5) Refer to associated line item descriptions provided for the Adjusted EBITDA table for the three and six months ended June 30, 2022 and 2021 above. | |||||
(6) Represents the acquisition Adjusted EBITDA for the period beginning July 1 of the year of the acquisition through the respective acquisition date of each acquired business to reflect the company's Standalone EBITDA as though material acquisitions occurred at the beginning of the presented period. | |||||
(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. |
Variance Increase/(Decrease) | Percentage of Factors Increase/(Decrease) | ||||||||||||||||||||||||||||
Three Months Ended June 30, | Total Variance (Dollars) | Total Variance (Percentage) | Acquisitions | FX Impact | Organic | ||||||||||||||||||||||||
(in millions, except percentages); (unaudited) | 2022 | 2021 | |||||||||||||||||||||||||||
Subscription revenues | $ | 407.4 | $ | 243.4 | $ | 164.0 | 67.4 | % | 68.9 | % | (5.4) | % | 3.8 | % | |||||||||||||||
Re-occurring revenues | 112.0 | 113.7 | (1.7) | (1.5) | % | — | % | (8.2) | % | 6.7 | % | ||||||||||||||||||
Transactional and other revenues | 168.0 | 90.0 | 78.0 | 86.7 | % | 85.6 | % | (3.9) | % | 5.0 | % | ||||||||||||||||||
Deferred revenues adjustment(1) | (0.8) | (1.4) | 0.6 | 42.9 | % | (42.9) | % | — | % | — | % | ||||||||||||||||||
Revenues, net | $ | 686.6 | $ | 445.7 | $ | 240.9 | 54.0 | % | 55.1 | % | (5.8) | % | 4.8 | % | |||||||||||||||
(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) | ||||||||||||||||||||||||||||
Six Months Ended June 30, | Total Variance (Dollars) | Total Variance (Percentage) | Acquisitions | FX Impact | Organic | ||||||||||||||||||||||||
(in millions, except percentages); (unaudited) | 2022 | 2021 | |||||||||||||||||||||||||||
Subscription revenues | $ | 811.2 | $ | 482.4 | $ | 328.8 | 68.2 | % | 68.8 | % | (4.0) | % | 3.3 | % | |||||||||||||||
Re-occurring revenues | 226.5 | 223.2 | 3.3 | 1.5 | % | — | % | (6.5) | % | 8.0 | % | ||||||||||||||||||
Transactional and other revenues | 311.7 | 172.9 | 138.8 | 80.3 | % | 79.7 | % | (3.1) | % | 3.7 | % | ||||||||||||||||||
Deferred revenues adjustment(1) | (0.6) | (4.4) | 3.8 | 86.4 | % | (86.4) | % | — | % | — | % | ||||||||||||||||||
Revenues, net | $ | 1,348.8 | $ | 874.1 | $ | 474.7 | 54.3 | % | 54.2 | % | (4.5) | % | 4.6 | % | |||||||||||||||
(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 June 30, | Total Variance (Dollars) | Total Variance (Percentage) | Acquisitions | FX Impact | Organic | ||||||||||||||||||||||||
(in millions, except percentages); (unaudited) | 2022 | 2021 | |||||||||||||||||||||||||||
Science Segment | $ | 448.2 | $ | 202.3 | $ | 245.9 | 121.6 | % | 121.0 | % | (4.9) | % | 5.5 | % | |||||||||||||||
IP Segment | 239.2 | 244.8 | (5.6) | (2.3) | % | — | % | (6.5) | % | 4.2 | % | ||||||||||||||||||
Deferred revenues adjustment(1) | (0.8) | (1.4) | 0.6 | 42.9 | % | (42.9) | % | — | % | — | % | ||||||||||||||||||
Revenues, net | $ | 686.6 | $ | 445.7 | $ | 240.9 | 54.0 | % | 55.1 | % | (5.8) | % | 4.8 | % | |||||||||||||||
(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) | ||||||||||||||||||||||||||||
Six Months Ended June 30, | Total Variance (Dollars) | Total Variance (Percentage) | Acquisitions | FX Impact | Organic | ||||||||||||||||||||||||
(in millions, except percentages); (unaudited) | 2022 | 2021 | |||||||||||||||||||||||||||
Science Segment | $ | 868.6 | $ | 393.6 | $ | 475.0 | 120.7 | % | 119.4 | % | (3.7) | % | 5.0 | % | |||||||||||||||
IP Segment | 480.8 | 484.9 | (4.1) | (0.8) | % | — | % | (5.1) | % | 4.2 | % | ||||||||||||||||||
Deferred revenues adjustment(1) | (0.6) | (4.4) | 3.8 | 86.4 | % | (86.4) | % | — | % | — | % | ||||||||||||||||||
Revenues, net | $ | 1,348.8 | $ | 874.1 | $ | 474.7 | 54.3 | % | 54.2 | % | (4.5) | % | 4.6 | % | |||||||||||||||
(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 | FX Impact | Organic | ||||||||||||||||||||||||
(in millions) | 2022 Outlook mid-point | 2021 | |||||||||||||||||||||||||||
Revenues, net | $ | 2,730.0 | $ | 1,876.9 | $ | 853.1 | 45.5 | % | 46.2 | % | (5.2) | % | 4.5 | % |
Year Ending December 31, 2022 (Forecasted) | |||||||||||
(in millions) | Low | High | |||||||||
Net income (loss) attributable to ordinary shares | $ | (16.9) | $ | 23.1 | |||||||
Dividends on preferred shares(1) | 75.5 | 75.5 | |||||||||
Net income | $ | 58.6 | $ | 98.6 | |||||||
Provision for income taxes | 73.5 | 73.5 | |||||||||
Depreciation and amortization | 717.5 | 717.5 | |||||||||
Interest expense and amortization of debt discount, net | 265.5 | 265.5 | |||||||||
Deferred revenue adjustment(2) | 0.8 | 0.8 | |||||||||
Restructuring and impairment(3) | 56.3 | 56.3 | |||||||||
Transaction related costs | 29.3 | 29.3 | |||||||||
Mark to market adjustment on financial instruments | (149.4) | (149.4) | |||||||||
Share-based compensation expense(4) | 118.5 | 118.5 | |||||||||
Other | (50.6) | (50.6) | |||||||||
Adjusted EBITDA | $ | 1,120.0 | $ | 1,160.0 | |||||||
Adjusted EBITDA margin | 41 | % | 42 | % | |||||||
(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 stock dividends. | |||||||||||
(2) Reflects the deferred revenues adjustment made as a result of acquisition accounting associated with businesses that were acquired prior to January 1, 2021. | |||||||||||
(3) Reflects restructuring costs primarily associated with the ProQuest acquisition which will be incurred in 2022. | |||||||||||
(4) Includes CPA Global Equity Plan compensation expense. |
Year Ending December 31, 2022 (Forecasted) | |||||||||||
Low | High | ||||||||||
Per Share | Per Share | ||||||||||
Net income (loss) attributable to ordinary shares | $ | (0.02) | $ | 0.03 | |||||||
Dividends on preferred shares(1) | 0.10 | 0.10 | |||||||||
Net income | $ | 0.08 | $ | 0.13 | |||||||
Restructuring and impairment(2) | 0.08 | 0.08 | |||||||||
Transaction related costs | 0.04 | 0.04 | |||||||||
Share-based compensation expense(3) | 0.16 | 0.16 | |||||||||
Amortization related to acquired intangible assets | 0.79 | 0.79 | |||||||||
Mark to market adjustment on financial instruments | (0.20) | (0.20) | |||||||||
Other | (0.10) | (0.05) | |||||||||
Income tax impact of related adjustments | (0.05) | (0.05) | |||||||||
Adjusted Diluted EPS | $ | 0.80 | $ | 0.90 | |||||||
Adjusted weighted-average ordinary shares (Diluted)(4) | 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 stock dividends. | |||||||||||
(2) Reflects restructuring costs primarily associated with the ProQuest acquisition which will be incurred in 2022. | |||||||||||
(3) Includes CPA Global Equity Plan compensation expense. | |||||||||||
(4) For the purposes of calculating adjusted earnings per share, the Company has excluded the accrued and anticipated MCPS stock dividends and assumed the “if-converted” method of share dilution. |
Year Ending December 31, 2022 (Forecasted) | |||||||||||
(in millions) | Low | High | |||||||||
Net cash provided by operating activities | $ | 535.0 | $ | 585.0 | |||||||
Capital expenditures | (190.0) | (190.0) | |||||||||
Free cash flow | 345.0 | 395.0 | |||||||||
Cash paid for restructuring costs(1) | 73.2 | 73.2 | |||||||||
Cash paid for CPA Global Equity Plan(2) | 165.0 | 165.0 | |||||||||
Cash paid for transaction and other related costs | 16.8 | 16.8 | |||||||||
Adjusted Free Cash Flow | $ | 600.0 | $ | 650.0 | |||||||
(1) Reflects cash payments for costs primarily related to restructuring associated with the ProQuest acquisition in 2022. | |||||||||||
(2) Includes cash funded by a trust related to the CPA Global Equity Plan payout upon vesting. |