Cannae Holdings, Inc. Third Quarter 2026 Earnings Call - CANNAE HOLDINGS INC

Explicit Guidance:

• Corporate Holding Company Expenses: Expected to realize approximately $3 million in additional annualized savings by eliminating a lease and cost-sharing agreement.
• Cash Flow/Run Rate: O'Charlie's closure is expected to save approximately $16 million annually in cash (based on the H1 2026 funding run rate).
• Shareholder Returns: Commitment to continue "discipline share buybacks" and quarterly dividends; $16 million of remaining buyback authorization is available under current programs.
• Black Knight Football (Bournemouth): Phase 2 of stadium renovation (opening next year) is expected to increase capacity to approx. 17,600 and generate an additional $10 million in match-day revenue upon completion.

Business-Segment Outlook:

• Portfolio Strategy: Full transition to sports and entertainment assets; 91% of new investment capital already allocated to these assets (excluding restaurant group funding); search for new investments will continue given "strong macroeconomic tailwinds."
• Black Knight Football (AFC Bournemouth):
  • Stadium: Phase 2 opening next year; revenue uplift of $10M expected post-completion.
  • Competitive: Team is in second place in Europa League; 7th in Premier League; 8-game winning streak; quarterfinals in Carabao Cup.
  • Financial: Fiscal year 2026 revenue up 50% vs. acquisition; EBITDA up 250% vs. acquisition (currently $84M).
  • Valuation: Management sees "significant upside" to valuation as the platform executes growth plans.
• Exeter Rugby: Early stage transformation; focus on hiring commercial/marketing talent to expand fan base and revenues; optimizing facilities and squad within salary cap constraints.
• Restaurant Group (O'Charlie's): Operations closed; cash usage expected to be "much lower going forward."
• Watkins Company / 99 / Bursada Ranch:
  • Bursada Ranch: Sold; put-right terminated.
  • Watkins: 49% stake sold in Q3.
  • 99 (Casual Dining): Monetization "still ongoing" but delayed due to performance challenges and difficult market conditions; management remains "resolute" in finding a solution.

Market and Competitive Outlook:

• Casual Dining Sector: Market for "casual dining restaurants has generally been challenged" since the strategic review began in February, complicating transaction timelines.
• Sports & Entertainment: Viewed as having "strong macroeconomic tailwinds" and "unique characteristics that support long-term value creation"; investments compared against buybacks based on long-term return potential.
• Competitive Positioning: Bournemouth's improved financials and sporting success expected to enhance brand and recruit top talent.

Macro / Industry Outlook:

• Market Conditions: Management notes the broader market for casual dining (specifically the 99 transaction) has been challenging.
• Capital Market Environment: Commitment to capital allocation discipline continues regardless of cash balance fluctuations; framework for buybacks vs. investments remains unchanged.

Strategic Initiatives:

• Non-Core Asset Monetization: Ongoing review to identify and sell select non-core assets to fund share buybacks and new sports investments; announcements will be made "as appropriate."
• Capital Investments:
  • Black Knight: $22M investment in Q3 to accelerate growth/expansion (20% premium to initial raise).
  • Restaurant Group: Capital allocated to close losses and fund wind-down.
  • Exeter Rugby: Active transformation post-acquisition (end of June 2026).
• Governance/Structure: Board size reduced to 10 members; two members leaving; focus on improving governance policies and holding company efficiency.

Risks and Headwinds to Outlook:

• Transaction Delays: The 99 monetization has taken "longer and been more complicated than expected" due to market conditions; no timeline provided for resolution.
• Market Volatility: Casual dining sector headwinds impact potential transaction outcomes.
• Execution Risk: Stadium renovation phases (Phase 2) and new investments carry execution risks regarding timelines and revenue realization.
• General Forward-Looking Statement Risks: Actual results may differ materially from projections due to risks detailed in SEC filings and quarterly shareholder letters (standard disclaimer applies).

Management Tone on the Future:

• Confidence: High confidence in the sports/entertainment strategy ("very optimistic" about Exeter; "significant upside" to Black Knight valuation); "resolute" regarding 99 monetization.
• Commitment: Strong commitment to capital returns and portfolio transformation; "disciplined" approach to monetization.
• Hedges: No specific financial hedges mentioned, but management notes that capital allocation decisions (buybacks vs. investments) will be made on an "ongoing basis" to "maximize value."

Miscellaneous:

• Financial Reporting Changes: O'Charlie's presented as discontinued operation; Bursada Ranch results included through sale date; Exeter Rugby results consolidated with a lag (first full reporting in Q4 2026).
• Tax: $45 million federal tax refund collected in Q3 2026.
• Share Count: 7.7 million shares repurchased year-to-date (representing >16% of shares outstanding).