Clarivate — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for Q3 2026 were $567.9 million, including the Life Sciences & Healthcare (LS&H) segment, compared to $623.1 million in Q3 2025; excluding LS&H (discontinued operations), revenues were $481.6 million versus $530.3 million in the prior year period.
• Organic revenues for continuing operations increased 0.4% in Q3 2026, driven by a 1.5% increase in organic subscription growth and 0.7% in organic re-occurring growth, partially offset by a 12.4% decline in organic transactional revenues.
• Organic Annualized Contract Value (ACV) for continuing operations grew 1.8% year-over-year in Q3 2026.
• Net loss for Q3 2026 including LS&H was $80.8 million ($0.13 per diluted share), compared to a net loss of $28.3 million ($0.04 per diluted share) in Q3 2025, driven by a $62.2 million non-cash LS&H goodwill impairment charge.
• Adjusted net income for Q3 2026 including LS&H was $136.0 million ($0.21 per diluted share), up from $119.3 million ($0.18 per diluted share) in Q3 2025.
• Adjusted EBITDA including LS&H was $245.3 million in Q3 2026, down from $252.4 million in Q3 2025; Adjusted EBITDA for continuing operations was $218.2 million, down 1.8% from $222.2 million in the prior year period.
• For the first nine months of 2026, total revenues including LS&H were $1,740.7 million versus $1,838.2 million in 2025; excluding LS&H, revenues were $1,472.4 million versus $1,546.7 million.
• Net loss for the first nine months of 2026 including LS&H was $389.6 million ($0.61 per diluted share), compared to $204.2 million ($0.30 per diluted share) in 2025, driven by a $283.9 million non-cash LS&H goodwill impairment charge.
• Adjusted net income for the first nine months of 2026 including LS&H was $378.4 million ($0.59 per diluted share), up from $338.4 million ($0.49 per diluted share) in 2025.
• Adjusted EBITDA for the first nine months of 2026 including LS&H was $733.7 million, down from $747.2 million in 2025; Adjusted EBITDA for continuing operations was $645.6 million, flat compared to $645.7 million in 2025.
• Net cash provided by operating activities for the first nine months of 2026 was $399.0 million, down from $468.6 million in 2025.
• Free cash flow for the first nine months of 2026 was $233.1 million, down from $276.1 million in 2025.
• As of September 30, 2026, cash and cash equivalents were $257.0 million, a decrease of $72.2 million from December 31, 2025.
• Total debt outstanding was $4,176.1 million as of September 30, 2026, a decrease of $293.8 million from the prior year, driven by accelerated debt repayments and repurchases at an approximate 5% discount to par.
• Recurring revenues (subscription and re-occurring) increased 1.3% organically in Q3 2026, totaling $444.1 million.
• Transactional revenues decreased $51.6 million to $37.5 million in Q3 2026, primarily due to product group wind-downs within Academia & Government (A&G).

Guidance and Future Outlook:

• Full Year 2026 Outlook (excluding discontinued operations):
  • ACV Organic Growth: 1.75% to 2.25%.
  • Recurring Organic Revenue Growth: 1.00% to 1.50%.
  • Revenues: $1.965 billion to $1.985 billion.
  • Adjusted EBITDA: $865 million to $885 million.
  • Adjusted EBITDA Margin: 43.0% to 45.0%.
  • Adjusted Diluted EPS: $0.73 to $0.77.
  • Free Cash Flow: $320 million to $340 million.
• Q4 2026 Outlook (excluding discontinued operations):
  • ACV Organic Growth: 1.75% to 2.25%.
  • Recurring Organic Revenue Growth: 2.00% to 2.50%.
  • Revenues: $490 million to $510 million.
  • Adjusted EBITDA: $215 million to $235 million.
  • Adjusted EBITDA Margin: 44.0% to 46.0%.
  • Adjusted Diluted EPS: $0.14 to $0.18.
  • Free Cash Flow: $85 million to $105 million.
• Outlook assumes no further acquisitions, divestitures, or unanticipated events.

Business Segments and Product Lines:

• The Company completed the divestiture of the Life Sciences & Healthcare (LS&H) segment on October 6, 2026, positioning the company to focus on two market-leading segments: Academia & Government and Intellectual Property.
• Q3 2026 Continuing Operations Revenue by Segment:
  • Academia & Government: $286.9 million (down 13.7% year-over-year, with 0.9% organic growth).
  • Intellectual Property: $194.7 million (down 1.6% year-over-year, with 0.4% organic growth).
• Subscription revenues increased $2.4 million (0.7%) to $338.3 million in Q3 2026; organic subscription revenues increased 1.5%.
• Re-occurring revenues increased $0.5 million (0.5%) to $105.8 million in Q3 2026; organic re-occurring revenues increased 0.7%, primarily due to higher IP volumes.
• The Intellectual Property segment returned to positive ACV growth in Q3 2026.
• Customer migration to higher margin subscription products contributed to the decline in transactional revenues.

Market and Competitive Landscape:

• Total ACV increased 3.6% year-over-year as of September 30, 2026, primarily due to improved product pricing and foreign exchange movements.
• The Company is leveraging AI-led innovation within the Academia & Government and Intellectual Property segments, citing growing commercial traction and customer validation.
• The portfolio transformation is driving a shift toward a more sustainable, subscription-led revenue base.

Risks and Challenges:

• The press release notes forward-looking statements regarding future results, which involve risks and uncertainties including global macroeconomic uncertainty, foreign exchange impacts, and the timing of strategic transactions.
• Actual results may differ from projections due to factors such as the impact of AI on the business, the success of the Value Creation Plan, and risks described in the company's Form 10-K.

Management Commentary and Tone:

• CEO Matti Shem Tov stated that third quarter results showed improvement across key metrics, including organic recurring revenue growth and the return to positive ACV growth in the Intellectual Property segment.
• Management expressed confidence in delivering on commitments to accelerate sustained organic growth, expand free cash flow, and reduce leverage.
• CFO Michael Easton highlighted disciplined execution, improving growth trends, strong margins, and continued free cash flow generation, with a focus on translating organic growth into sustainable earnings.

Other Key Points:

• The LS&H segment divestiture was closed early on October 6, 2026, generating net cash proceeds of $488.4 million.
• The company redeemed the senior secured notes due November 2026 in full following a $100.0 million accelerated debt repayment in January 2026.
• The company retired $192.6 million aggregate principal of senior secured notes due 2028 and senior notes due 2029 through debt repurchases at an approximate 5% discount to par.
• The LS&H segment results are now presented as discontinued operations.
• A conference call and webcast were hosted on November 3, 2026, to review the results.