CLARIVATE PLC (CLVT)
SIC breadcrumb: Services > Business Services > SIC 7374 Services-Computer Processing & Data Preparation
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1764046. Latest filing source: 0001764046-26-000019.
Informational only - descriptive public-record data, not investment advice.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 2,455,200,000 | USD | 2025 | 2026-02-24 |
| Net income | -201,100,000 | USD | 2025 | 2026-02-24 |
| Assets | 11,069,400,000 | USD | 2025 | 2026-02-24 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001764046.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 917,634,000 | 968,468,000 | 974,345,000 | 1,254,100,000 | 1,876,900,000 | 2,659,800,000 | 2,628,800,000 | 2,556,700,000 | 2,455,200,000 | |
| Net income | -263,930,000 | -242,162,000 | -258,633,000 | -350,600,000 | -270,500,000 | -3,960,200,000 | -911,200,000 | -636,700,000 | -201,100,000 | |
| Operating income | -147,027,000 | -105,708,000 | -82,486,000 | -36,300,000 | -87,000,000 | -3,925,600,000 | -734,700,000 | -275,600,000 | 71,500,000 | |
| Diluted EPS | -1.11 | -0.94 | -0.82 | -0.61 | -6.24 | -1.47 | -0.96 | -0.30 | ||
| Operating cash flow | 6,667,000 | -26,100,000 | 117,580,000 | 263,500,000 | 323,800,000 | 509,300,000 | 744,200,000 | 646,600,000 | 628,500,000 | |
| Capital expenditures | 45,410,000 | 69,836,000 | 107,700,000 | 118,500,000 | 202,900,000 | 242,500,000 | 289,100,000 | 263,200,000 | ||
| Dividends paid | 0.00 | 18,900,000 | 75,400,000 | 75,500,000 | 37,700,000 | 0.00 | ||||
| Assets | 3,709,674,000 | 3,791,371,000 | 14,790,698,000 | 20,183,000,000 | 13,944,900,000 | 12,706,800,000 | 11,490,200,000 | 11,069,400,000 | ||
| Liabilities | 2,659,067,000 | 2,542,772,000 | 5,755,908,000 | 8,257,100,000 | 7,132,400,000 | 6,714,500,000 | 6,351,200,000 | 6,226,500,000 | ||
| Stockholders' equity | 1,505,361,000 | 1,286,106,000 | 1,050,607,000 | 1,248,600,000 | 9,034,800,000 | 11,925,900,000 | 6,812,500,000 | 5,992,300,000 | 5,139,000,000 | 4,842,900,000 |
| Cash and cash equivalents | 77,136,000 | 53,186,000 | 25,575,000 | 76,100,000 | 257,700,000 | 430,900,000 | 356,800,000 | 370,700,000 | 295,200,000 | 329,200,000 |
| Free cash flow | -71,510,000 | 47,744,000 | 155,800,000 | 205,300,000 | 306,400,000 | 501,700,000 | 357,500,000 | 365,300,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | -28.76% | -25.00% | -26.54% | -27.96% | -14.41% | -148.89% | -34.66% | -24.90% | -8.19% | |
| Operating margin | -16.02% | -10.91% | -8.47% | -2.89% | -4.64% | -147.59% | -27.95% | -10.78% | 2.91% | |
| Return on equity | -20.52% | -23.05% | -20.71% | -3.88% | -2.27% | -58.13% | -15.21% | -12.39% | -4.15% | |
| Return on assets | -6.53% | -6.82% | -2.37% | -1.34% | -28.40% | -7.17% | -5.54% | -1.82% | ||
| Liabilities / equity | 2.53 | 2.04 | 0.64 | 0.69 | 1.05 | 1.12 | 1.24 | 1.29 | ||
| Current ratio | 0.63 | 0.76 | 0.81 | 0.86 | 0.89 | 0.91 | 0.87 | 0.84 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001764046.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2020-Q3 | 2020-09-30 | -0.10 | reported discrete quarter | ||
| 2020-Q4 | 2020-12-31 | 455,595,000 | -199,144,000 | derived Q4 = FY annual - nine-month YTD | |
| 2023-Q3 | 2023-06-30 | -123,100,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 647,200,000 | -0.01 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 683,700,000 | -843,900,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 621,200,000 | -75,000,000 | -0.14 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | -75,000,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 650,300,000 | -0.46 | reported discrete quarter | |
| 2024-Q3 | 2024-06-30 | -304,300,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 622,200,000 | -0.09 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 663,000,000 | -191,800,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 593,700,000 | -103,900,000 | -0.15 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | -103,900,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 621,400,000 | -0.11 | reported discrete quarter | |
| 2025-Q3 | 2025-06-30 | -72,000,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 623,100,000 | -0.04 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 617,000,000 | 3,100,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 585,500,000 | -40,200,000 | -0.06 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001764046-26-000058.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion should be read in conjunction with our historical financial statements and related notes included in
our annual report on Form 10-K for the year ended December 31, 2025 and the condensed consolidated financial statements
and related notes included elsewhere in this quarterly report on Form 10-Q. Certain statements in this section are forward-
looking, subject to the risks and uncertainties described in the Cautionary Note Regarding Forward-Looking Statements and
in Item 1A. Risk Factors of this quarterly report, as well as the factors described Item 1A. Risk Factors in our most recently
filed annual report on Form 10-K.
Overview
We are a leading global provider of transformative intelligence. We support the entire innovation lifecycle, from cultivating
curiosity to protecting the world’s critical intellectual property assets. Our aim is to fuel the world’s greatest breakthroughs
by harnessing the power of human ingenuity. From research and learning to commercialization, we offer intelligence
solutions, workflow solutions, and tech-enabled services to customers in the Academia & Government (“A&G”), Intellectual
Property (“IP”), and Life Sciences & Healthcare (“LS&H”) end markets, which form the basis of our reportable segment
structure.
•Intelligence solutions. Continuously enriched, up-to-date knowledge assets, combining expert-curated data, structured
taxonomies, and analytical models that transform complex information into actionable insights powered by a unique
combination of AI-enabled software and human expertise.
•Workflow solutions. Automated, flexible software tools complemented by our enriched data sets and expert analysis
tailored to meet specific needs.
•Tech-enabled services. We are home to industry specialists, consultants, and data scientists with deep subject-matter
expertise and global experience.
In February 2026, we announced that we are pursuing a sale of our LS&H segment. We believe that a potential sale will
allow us to increase our focus on our A&G and IP businesses, and we anticipate that proceeds from a potential sale would
strengthen our balance sheet through reduced leverage. We are currently engaged in active discussions with interested parties
but cannot assure that the sale process will result in a transaction.
Key Performance Indicators
We regularly monitor organic revenue growth, annualized contract value (“ACV”), annual renewal rates, Adjusted EBITDA,
Adjusted EBITDA margin, and Free cash flow as key performance indicators that we use to evaluate our business and trends,
measure performance, prepare financial projections, and make strategic decisions.
Adjusted EBITDA, Adjusted EBITDA margin, and Free cash flow are financial measures that are not prepared in accordance
with U.S. generally accepted accounting principles (“non-GAAP”). Although we believe these measures may be useful to
investors in evaluating our business, these measures are not a substitute for GAAP financial measures or disclosures.
Reconciliations of our non-GAAP measures from the most directly comparable GAAP measures are provided further below.
Organic revenue growth
We define organic revenue as revenue generated from pricing, up-selling, securing new customers, sales of new or enhanced
products, and similar activities. Organic revenues exclude revenues from acquisitions and disposals (including divestitures)
completed within the past 12 months and the impact from changes in foreign currency exchange rates (“FX”).
We review year-over-year organic revenue growth in our segments as a key measure of our success in addressing customer
needs. We also review year-over-year organic revenue growth by transaction type to help us identify and address broad
changes in product mix, and by geography to help us identify and address changes and revenue trends by region.
Annualized contract value
Our ACV, at any point in time, represents the annualized value of all active customer subscription-based license agreements
for the next 12 months, assuming those coming up for renewal during the measurement period are renewed at their current
price level. We use ACV as a key indicator of the health and trajectory of our core business as well as to assist in the
evaluation of underlying sales execution and customer engagement trends. This metric is particularly important to us because
the majority of our revenues are generated from subscription-based license agreements.
21
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Actual subscription revenues that we recognize during any 12-month period are likely to differ from ACV at the beginning of
that period, sometimes significantly, due to subsequent changes in volume (including upgrades, downgrades, new business,
and cancellations) and price, acquisitions, divestitures and disposals, and changes in FX.
Our organic ACV grew 1.6% compared to March 31, 2025, primarily driven by improved product pricing. Our total ACV for
March 31, 2026, compared to March 31, 2025, increased 3.2%, primarily due to improved product pricing and FX
movements.
Annual renewal rate
Our annual renewal rate, at any point in time, represents (a) the annualized value of all active customer subscription-based
license agreements renewed during the measurement period (including the value of any product downgrades), divided by
(b) the annualized value of all active subscription-based license agreements that were up for renewal during the measurement
period. “Open renewals,” which we define as active customer subscription-based license agreements that were up for renewal
during the measurement period but were neither renewed nor canceled, are excluded from both the numerator and
denominator of the calculation. Additionally, the impact from product downgrades upon renewal is reflected in the annual
renewal calculation, but the impact from product upgrades is not, because upgrades reflect the purchase of additional
products and services. The impact of upgrades, new subscriptions, and improved product pricing is reflected in ACV, but not
in annual renewal rates.
As the majority of our revenues are generated from subscription-based license agreements, we use the annual renewal rate as
a key indicator of our ability to retain existing customers, evaluate the execution of our sales strategy and customer
engagement trends, and to help analyze our historical results and prepare financial projections.
Our annual renewal rate of 92.5% as of March 31, 2026 remained stable compared to December 31, 2025.
Adjusted EBITDA and Adjusted EBITDA margin
We use Adjusted EBITDA as a basis for evaluating our ongoing operating performance, and we believe it is useful for
investors to understand the underlying trends of our operations. Adjusted EBITDA represents Net income (loss) before the
Provision (benefit) for income taxes, Depreciation and amortization, and Interest expense, net, adjusted to exclude share-
based compensation, impairments, restructuring expenses, the impact of certain non-cash fair value adjustments on financial
instruments, acquisition and/or disposal-related transaction costs, unrealized foreign currency gains/losses, legal settlements,
and other items that are included in Net income (loss) for the period that we do not consider indicative of our ongoing
operating performance. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues.
Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our future
results will be unaffected by any of the adjusted items, or that our projections and estimates will be realized in their entirety
or at all. In addition, because of these limitations, Adjusted EBITDA should not be considered as a measure of liquidity or
discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our
obligations. Our reconciliation between Net income (loss) and Net income (loss) margin and Adjusted EBITDA and Adjusted
EBITDA margin is provided further below.
Free cash flow
We use Free cash flow in our operational and financial decision-making and believe it is useful to investors because similar
measures are frequently used by securities analysts, investors, ratings agencies, and other interested parties to measure the
ability of a company to service its debt. Our presentation of Free cash flow should not be considered as a measure of liquidity
or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our
obligations.
We define Free cash flow as Net cash provided by operating activities less Capital expenditures. Our reconciliation between
Net cash provided by operating activities and Free cash flow is provided further below.
22
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
| Three Months Ended March 31, | |||||
|---|---|---|---|---|---|
| 2026 | 2025 | % Change | |||
| Revenues | $585.5 | $593.7 | (1) % | ||
| Operating expenses: | |||||
| Cost of revenues | 192.1 | 207.0 | (7) % | ||
| Selling, general and administrative costs | 176.3 | 178.4 | (1) % | ||
| Depreciation and amortization | 184.0 | 185.4 | (1) % | ||
| Restructuring costs | 12.0 | 24.7 | (51) % | ||
| Other operating expense (income), net | (9.1) | 19.0 | N/M | ||
| Total operating expenses | 555.3 | 614.5 | |||
| Income (loss) from operations | 30.2 | (20.8) | |||
| Interest expense, net | 59.0 | 64.3 | (8) % | ||
| Income (loss) before income taxes | (28.8) | (85.1) | |||
| Provision (benefit) for income taxes | 11.4 | 18.8 | (39) % | ||
| Net income (loss) | $(40.2) | $(103.9) | |||
| N/M - Represents a change approximately equal to or in excess of 100% or is not meaningful. |
In December 2024, our Board approved the wind-down of three product groups within the LS&H and A&G segments, which
is continuing into 2026 and partially affects prior year comparability as further discussed below.
Revenues
The following tables present our revenues by type, segment, and geography, as well as the components driving the changes
between periods.
Revenues by transaction type
| Three Months EndedMarch 31, | Change | % of Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 2025 | $ | % | Acquisitions | Disposals | FX | Organic | |||||
| Subscription | $397.5 | $388.6 | $8.9 | 2.3 % | – % | (1.3) % | 1.9 % | 1.7 % | ||||
| Re-occurring | 108.6 | 105.9 | 2.7 | 2.5 % | – % | (0.1) % | 4.2 % | (1.6) % | ||||
| Recurring revenues | 506.1 | 494.5 | 11.6 | 2.3 % | – % | (1.1) % | 2.4 % | 1.0 % | ||||
| Transactional | 79.4 | 99.2 | (19.8) | (20.0) % | – % | (19.3) % | 1.3 % | (2.0) % | ||||
| Revenues | $585.5 | $593.7 | $(8.2) | (1.4) % | – % | (4.2) % | 2.2 % | 0.6 % |
Subscription revenues increased primarily due to organic growth driven by new sales and pricing, along with FX, partially
offset by product group wind-downs within LS&H. Re-occurring revenues increased primarily due to FX. The transactional
decline was primarily due to product group wind-downs in A&G and LS&H, while the organic decline was related to lower
A&G activity.
Revenues by segment
[[GREPCENT_TABLE]]
[["","Three Months EndedMarch 31,","","Change","","% of Change"],["","2026","","2025","","$","","%","","Acquisitions","Disposals","FX","Organic"],["A&G","$295.0","","$302.7","","$(7.7)","","(2.5) %","","\u2013 %","(6.2) %","1.7 %","2.0 %"],["IP","197.2","","192.7","","4.5","","2.3 %","","\u2013 %","\u2013 %","3.6 %","(1.3) %"],["LS&H","93.3","","98.3","","
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion should be read in conjunction with our consolidated financial statements and related notes included
elsewhere in this annual report on Form 10-K. Certain statements in this section are forward-looking, subject to the risks and
uncertainties described in the Cautionary Note Regarding Forward-Looking Statements and under Item 1A. Risk Factors of
this annual report.
This section generally discusses our financial condition and results of operations for the years ended December 31, 2025 and
2024, including year-over-year comparisons. Discussion of our financial condition and results of operations for the year
ended December 31, 2023, and comparisons between 2024 and 2023, are not included in this annual report and may be
found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our annual
report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 19, 2025.
Overview
We are a leading global provider of transformative intelligence. We support the entire innovation lifecycle, from cultivating
curiosity to protecting the world’s critical intellectual property assets. Our aim is to fuel the world’s greatest breakthroughs
by harnessing the power of human ingenuity. From research and learning to commercialization, we offer intelligence
solutions, workflow solutions, and tech-enabled services to customers in the Academia & Government (“A&G”), Intellectual
Property (“IP”), and Life Sciences & Healthcare (“LS&H”) end markets, which form the basis of our reportable segment
structure.
•Intelligence solutions. Continuously enriched, up-to-date knowledge assets, combining expert-curated data,
structured taxonomies, and analytical models that transform complex information into actionable insights powered
by a unique combination of AI-enabled software and human expertise.
•Workflow solutions. Automated, flexible software tools complemented by our enriched data sets and expert
analysis tailored to meet specific needs.
•Tech-enabled services. We are home to industry specialists, consultants, and data scientists with deep subject-
matter expertise and global experience.
For further information about our business, customers, segments, and people, see Item 1. Business included in Part I of this
annual report.
Key Performance Indicators
We regularly monitor organic revenue growth, annualized contract value, annual renewal rates, Adjusted EBITDA, Adjusted
EBITDA margin, and Free cash flow as key performance indicators that we use to evaluate our business and trends, measure
performance, prepare financial projections, and make strategic decisions.
Adjusted EBITDA, Adjusted EBITDA margin, and Free cash flow are financial measures that are not prepared in accordance
with U.S. generally accepted accounting principles (“non-GAAP”). Although we believe these measures may be useful to
investors in evaluating our business, these measures are not a substitute for GAAP financial measures or disclosures.
Reconciliations of our non-GAAP measures to the most directly comparable GAAP measures are provided further below.
Organic revenue growth
We define organic revenue as revenue generated from pricing, up-selling, securing new customers, sales of new or enhanced
products, and similar activities. Organic revenues exclude revenues from acquisitions and disposals (including divestitures)
completed within the past 12 months and the impact from changes in foreign currency exchange rates (“FX”).
We review year-over-year organic revenue growth in our segments as a key measure of our success in addressing customer
needs. We also review year-over-year organic revenue growth by transaction type to help us identify and address broad
changes in product mix, and by geography to help us identify and address changes and revenue trends by region.
Annualized contract value
Our ACV, at any point in time, represents the annualized value of all active customer subscription-based license agreements
for the next 12 months, assuming those coming up for renewal during the measurement period are renewed at their current
price level. We use ACV as a key indicator of the health and trajectory of our core business as well as to assist in the
26
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
evaluation of underlying sales execution and customer engagement trends. This metric is particularly important to us because
the majority of our revenues are generated from subscription-based license agreements.
Actual subscription revenues that we recognize during any 12-month period are likely to differ from ACV at the beginning of
that period, sometimes significantly, due to subsequent changes in volume (including upgrades, downgrades, new business,
and cancellations) and price, acquisitions, divestitures and disposals, and changes in FX.
Our organic ACV grew 1.8% in 2025, compared to 2024, primarily driven by improved product pricing. Our total ACV for
2025, compared to 2024, declined 1.0% primarily due to the wind-down of certain product groups beginning in the first
quarter of 2025.
Annual renewal rate
Our annual renewal rate, at any point in time, represents (a) the annualized value of all active customer subscription-based
license agreements renewed during the measurement period (including the value of any product downgrades), divided by
(b) the annualized value of all active subscription-based license agreements that were up for renewal during the measurement
period. “Open renewals,” which we define as active customer subscription-based license agreements that were up for renewal
during the measurement period but were neither renewed nor canceled, are excluded from both the numerator and
denominator of the calculation. Additionally, the impact from product downgrades upon renewal is reflected in the annual
renewal calculation, but the impact from product upgrades is not, because upgrades reflect the purchase of additional
products and services. The impact of upgrades, new subscriptions, and improved product pricing is reflected in ACV, but not
in annual renewal rates.
As the majority of our revenues are generated from subscription-based license agreements, we use the annual renewal rate as
a key indicator of our ability to retain existing customers, evaluate the execution of our sales strategy and customer
engagement trends, and to help analyze our historical results and prepare financial projections.
Our annual renewal rate for the years ended December 31, 2025 and 2024 was 92.5% and 91.9%, respectively.
Adjusted EBITDA and Adjusted EBITDA margin
We use Adjusted EBITDA as a basis for evaluating our ongoing operating performance, and we believe it is useful for
investors to understand the underlying trends of our operations. Adjusted EBITDA represents Net income (loss) before the
Provision (benefit) for income taxes, Depreciation and amortization, and Interest expense, net, adjusted to exclude share-
based compensation, impairments, restructuring expenses, the impact of certain non-cash fair value adjustments on financial
instruments, acquisition and/or disposal-related transaction costs, unrealized foreign currency gains/losses, legal settlements,
and other items that are included in Net income (loss) for the period that we do not consider indicative of our ongoing
operating performance. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues.
Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our future
results will be unaffected by any of the adjusted items, or that our projections and estimates will be realized in their entirety
or at all. In addition, because of these limitations, Adjusted EBITDA should not be considered as a measure of liquidity or
discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our
obligations. For a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to Net income (loss) and Net income
(loss) margin, refer to Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measures) below.
Free cash flow
We use Free cash flow in our operational and financial decision-making and believe it is useful to investors because similar
measures are frequently used by securities analysts, investors, ratings agencies, and other interested parties to measure the
ability of a company to service its debt. Our presentation of Free cash flow should not be considered as a measure of liquidity
or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our
obligations.
We define Free cash flow as Net cash provided by operating activities less Capital expenditures. For further discussion
related to Free cash flow, including a reconciliation to Net cash provided by operating activities, refer to Liquidity and
Capital Resources - Cash Flows below.
Critical Accounting Policies and Estimates
The preparation of the consolidated financial statements in accordance with GAAP requires management to make significant
judgments and estimates that affect the amounts reported in the consolidated financial statements. We base our estimates on
historical experience and various other assumptions that we believe are reasonable under the circumstances, and we review
27
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
these estimates on an ongoing basis. We consider the following accounting policies and associated estimates to be critical to
understanding our financial statements because the application of these policies requires management’s subjective or complex
judgments about the effects of matters that are inherently uncertain. These significant judgments could have a material impact
on our financial statements if actual performance should differ from historical experience or from our initial estimates, or if
our assumptions were to change. For further information about our significant accounting policies, including the policies
discussed below, see Note 1 - Nature of Operations and Summary of Significant Accounting Policies included in Part II, Item
8 of this annual report.
Revenue Recognition
Most of our products and services are provided under agreements containing standard terms and conditions. The majority of
our revenue is derived from subscription arrangements, which generally are initially deferred and then recognized ratably
over the contract term. These arrangements typically do not require any significant judgments or estimates about when
revenue should be recognized.
A limited number of re-occurring and transaction agreements contain multiple performance obligations. We apply judgment
in identifying the separate performance obligations to be delivered under the arrangement and allocating the transaction price
based on the estimated standalone selling price of each performance obligation.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill
We perform goodwill impairment testing during the fourth quarter of each year, or more frequently if events or changes in
circumstances indicate that carrying value may not be recoverable. In assessing whether a potential impairment event has
occurred, we evaluate various factors, many of which are subjective and require significant judgment. Examples of such
factors include significant negative industry or economic trends, persistent declines in our market value, significant changes
in regulatory requirements or the legal environment, and segment changes.
We engage outside experts as deemed necessary to assist in estimating the fair value of a reporting unit using a DCF model.
Our DCF model relies significantly on our internal forecasts of future cash flows and long-term growth rates. Significant
judgments and estimates made in this analysis include projected revenue growth rates and EBITDA margins, tax rates,
terminal values, and discount rates. The use of a different set of assumptions and estimates could result in materially different
results.
Between 2023 and 2025, we have performed the following goodwill impairment assessments, with the associated results of
each assessment:
| Q4-23(1) | Q2-24(2) | Q4-24(2) | Q4-25 | ||||
|---|---|---|---|---|---|---|---|
| Type of assessment | Quantitative, annual | Quantitative, interim | Quantitative,annual | Quantitative,annual | |||
| Goodwill impairment: | |||||||
| A&G | $— | $— | $— | $— | |||
| IP | (582.2) | — | — | — | |||
| LS&H | (265.5) | (302.8) | (149.1) | — | |||
| Total | $(847.7) | $(302.8) | $(149.1) | $— | |||
| (1) The impairment was primarily due to worsening macroeconomic and market conditions and sustained declines in our share price. | |||||||
| (2) The impairments were primarily due to sustained declines in our share price. |
In each assessment, we compared the estimated fair value to the carrying value for the A&G and LS&H reporting units (the
IP reporting unit was fully impaired in 2023). Based on these assessments, in 2023 and 2024, we concluded that the estimated
fair value of the A&G reporting unit was still substantially in excess of its carrying value, while the LS&H reporting unit fair
value was below its carrying value, resulting in the goodwill impairment charges shown in the table above. In our 2025
quantitative assessment, we determined that the A&G reporting unit fair value was approximately 12% in excess of its
carrying value and the LS&H reporting unit fair value was approximately 8% in excess of its carrying value; therefore, no
impairment charge was required for 2025.
In completing our goodwill assessment in the fourth quarter of 2025, we used weighted average cost of capital (“WACC”)
discount rate assumptions of 12% and 10% for the A&G and LS&H reporting units, respectively. The discount rates were
derived using a capital asset pricing model and analyzing published rates for industries relevant to each reporting unit to
estimate the cost of equity financing. We used discount rates we believe to be commensurate with the risks and uncertainty
28
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
inherent in the respective reporting units and in our internally developed forecasts. A 50 basis point increase in the discount
rate would have resulted in the fair values of the A&G and LS&H reporting units being approximately 7% in excess of and
approximately equal to their carrying values, respectively.
If our share price and market capitalization continues to decline, other adverse developments in economic or market
conditions occur, or our actual results fall short of our projections or estimates, the estimated fair values of our reporting units
may fall below their carrying values, triggering future impairment charges.
Indefinite-Lived Intangible Assets
Our indefinite-lived intangible assets consist of purchased brand trade names. In 2025, 2024, and 2023, we used a qualitative
assessment to evaluate events and circumstances that might impact the value of each trade name. We did not identify any
impairments of our indefinite-lived intangible assets in 2025, 2024, or 2023.
Long-Lived Assets (including Other Intangible Assets)
We evaluate long-lived assets, including property and equipment, definite-lived intangible assets, and right-of-use lease
assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may
not be recoverable. Upon such an occurrence, we assess recoverability by comparing the carrying amount of the asset group
to our estimate of the future undiscounted cash flows expected to be generated by the asset group over its remaining life. We
exercise judgment in selecting the appropriate assumptions to use in the estimated future undiscounted cash flows analysis. If
the carrying amount of the asset group exceeds its estimated future cash flows, we recognize an impairment charge equal to
the amount by which the carrying amount of the asset group exceeds its fair value.
Share-Based Compensation
Share-based compensation expense includes cost associated with restricted share units (“RSUs”) and performance share units
(“PSUs”) granted to certain key members of management.
The share-based compensation cost of time-based RSU and PSU grants is calculated by multiplying the grant date fair value
by the number of shares granted. We engage a third-party valuation expert to perform a Monte Carlo simulation that
estimates the grant date fair value for PSUs that have a market-based modifier component. We recognize compensation
expense over the vesting period of the award on a graded-scale basis, and we recognize forfeitures as they occur. Each
quarter, we estimate the number of shares that are expected to vest and adjust our expense accordingly.
Income Taxes
We recognize income taxes under the asset and liability method. Our income tax expense, deferred tax assets and liabilities,
and reserves for unrecognized tax benefits reflect our best assessment of estimated current and future taxes to be paid.
Significant judgments and estimates are required in determining the consolidated income tax expense for financial statement
purposes. In assessing the realizability of deferred tax assets, we consider all available positive and negative evidence factors,
including historical and projected future taxable income by tax jurisdiction, character and timing of income or loss, and
prudent and feasible tax planning strategies. We record a valuation allowance to reduce our deferred tax assets to an amount
that is more likely than not to be realized. Unforeseen future events, such as changes in market conditions and changes in tax
laws, could have a material impact on the realizability of deferred tax assets.
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations
in a multitude of jurisdictions across our global operations. We record tax benefits when it is more likely than not that the
position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the
technical merits of the position. Because of the complexity of some of these uncertainties, the ultimate resolution of our
uncertain tax positions may result in a payment that is materially different from our current estimates. These differences will
be reflected as increases or decreases to income tax expense in the period in which new information is available.
Recently Issued Accounting Pronouncements
For a discussion related to recently issued and adopted accounting pronouncements, see Note 1 - Nature of Operations and
Summary of Significant Accounting Policies included in Part II, Item 8 of this annual report.
29
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
| Year Ended December 31, | Change | ||||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | $ | % | ||||
| Revenues | $2,455.2 | $2,556.7 | (101.5) | (4)% | |||
| Operating expenses: | |||||||
| Cost of revenues | 833.6 | 869.2 | (35.6) | (4)% | |||
| Selling, general and administrative costs | 708.6 | 727.6 | (19.0) | (3)% | |||
| Depreciation and amortization | 757.2 | 727.0 | 30.2 | 4% | |||
| Goodwill and intangible asset impairments | 15.0 | 540.7 | (525.7) | (97)% | |||
| Restructuring and other impairments | 50.7 | 19.6 | 31.1 | N/M | |||
| Other operating expense (income), net | 18.6 | (51.8) | 70.4 | N/M | |||
| Total operating expenses | 2,383.7 | 2,832.3 | |||||
| Income (loss) from operations | 71.5 | (275.6) | |||||
| Fair value adjustment of warrants | — | (5.2) | 5.2 | N/M | |||
| Interest expense, net | 265.4 | 283.4 | (18.0) | (6)% | |||
| Income (loss) before income taxes | (193.9) | (553.8) | |||||
| Provision (benefit) for income taxes | 7.2 | 82.9 | (75.7) | (91)% | |||
| Net income (loss) | (201.1) | (636.7) | |||||
| Dividends on preferred shares | — | 31.3 | (31.3) | N/M | |||
| Net income (loss) attributable to ordinary shares | $(201.1) | $(668.0) | |||||
| N/M - Represents a change approximately equal to or in excess of 100% or is not meaningful. |
As discussed below and in the notes to the financial statements, the following factors had a significant impact on the
comparability of our results of operations between the periods presented and may affect the comparability of our results of
operations in future periods:
•In December 2024, the Board approved the wind-down of three product groups within the LS&H and A&G
segments, which is expected to reduce revenues and profit by less than 10% and 5%, respectively.
•In November 2024, we completed the sale of the ScholarOne product group within our A&G segment.
•In the second and fourth quarters of 2024, we recognized substantial goodwill impairments.
•In April 2024, we completed the sale of our Valipat product group within our IP segment.
Revenues
The following tables present our revenues by type, segment, and geography, as well as the components driving the changes
between periods.
Revenues by transaction type
| Year Ended December 31, | Change | % of Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | $ | % | Acquisitions | Disposals | FX | Organic | |||||
| Subscription | $1,605.5 | $1,626.8 | $(21.3) | (1.3)% | 0.1% | (2.7)% | 0.5% | 0.8% | ||||
| Re-occurring | 434.2 | 429.8 | 4.4 | 1.0% | —% | —% | 1.4% | (0.4)% | ||||
| Recurring revenues | 2,039.7 | 2,056.6 | (16.9) | (0.8)% | 0.1% | (2.2)% | 0.7% | 0.6% | ||||
| Transactional | 415.5 | 500.1 | (84.6) | (16.9)% | 0.1% | (12.6)% | 0.4% | (4.8)% | ||||
| Revenues | $2,455.2 | $2,556.7 | $(101.5) | (4.0)% | 0.1% | (4.7)% | 0.7% | (0.1)% |
Subscription organic growth was driven by new sales and improved retention and pricing, with the disposals decrease
primarily attributable to the ScholarOne divestiture and product group wind-downs within LS&H. Re-occurring revenues
increased primarily due to FX translation gains. The transactional organic decline was primarily due to lower IP activity,
while the disposal decrease was primarily due to the product group wind-downs in A&G and LS&H, as well as the Valipat
divestiture.
30
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Revenues by segment
| Year Ended December 31, | Change | % of Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | $ | % | Acquisitions | Disposals | FX | Organic | |||||
| A&G | $1,266.0 | $1,326.4 | $(60.4) | (4.6)% | —% | (6.7)% | 0.5% | 1.6% | ||||
| IP | 799.4 | 811.4 | (12.0) | (1.5)% | 0.1% | (1.0)% | 1.3% | (1.9)% | ||||
| LS&H | 389.8 | 418.9 | (29.1) | (6.9)% | 0.2% | (6.0)% | 0.3% | (1.4)% | ||||
| Revenues | $2,455.2 | $2,556.7 | $(101.5) | (4.0)% | 0.1% | (4.7)% | 0.7% | (0.1)% |
A&G segment revenues decreased primarily due to the product group wind-downs and ScholarOne divestiture, partially
offset by subscription organic growth driven by new sales and improved retention and pricing. IP segment revenues
decreased primarily due to lower transactional volumes and subscription retention, as well as the Valipat divestiture. LS&H
segment revenues decreased primarily due to product group wind-downs and lower transactional and subscription revenues.
Revenues by geography
| Year Ended December 31, | Change | % of Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | $ | % | Acquisitions | Disposals | FX | Organic | |||||
| Americas | $1,303.0 | $1,381.4 | $(78.4) | (5.7)% | 0.1% | (5.4)% | 0.1% | (0.5)% | ||||
| EMEA | 654.8 | 667.8 | (13.0) | (1.9)% | —% | (4.3)% | 2.1% | 0.3% | ||||
| APAC | 497.4 | 507.5 | (10.1) | (2.0)% | —% | (2.6)% | 0.3% | 0.3% | ||||
| Revenues | $2,455.2 | $2,556.7 | $(101.5) | (4.0)% | 0.1% | (4.7)% | 0.7% | (0.1)% |
Americas revenues decreased primarily due to the product group wind-downs within A&G and LS&H, the ScholarOne
divestiture, and, to a lesser extent, lower IP contribution. EMEA (Europe/Middle East/Africa) revenues decreased primarily
due to the product group wind-downs within A&G, and the Valipat and ScholarOne product group divestitures. APAC (Asia
Pacific) revenues decreased due to product group wind-downs within A&G.
Cost of revenues
Cost of revenues consists of costs related to the production, servicing, and maintenance of our products and are composed
primarily of related personnel costs, data center services and licensing costs, and costs to acquire or produce content,
including royalty fees.
The decrease of 4% compared to 2024 was primarily driven by the product wind-downs, as well as the ScholarOne and
Valipat divestitures. As a percentage of revenues, Cost of revenues were largely unchanged compared to the prior year.
Selling, general and administrative costs
Selling, general and administrative costs (“SG&A”) include nearly all business costs not directly attributable to the
production, servicing, and maintenance of our products and are composed primarily of personnel costs, third-party
professional services fees, facility costs like rent and utilities, technology costs associated with our corporate infrastructure,
and transaction expenses associated with acquisitions, divestitures, and capital market activities including advisory, legal, and
other professional and consulting costs.
The decrease of 3% compared to 2024 was primarily driven by cost management and product group wind-downs. As a
percentage of revenues, SG&A costs were largely unchanged compared to the prior year.
Depreciation and amortization
Depreciation expense relates to our fixed assets, including computer hardware, leasehold improvements, and furniture and
fixtures. Amortization expense relates to our definite-lived intangible assets, including customer relationships, technology
and content, internally developed computer software, and trade names.
The increase of 4% compared to 2024 was primarily driven by increased investment in computer software assets. As a
percentage of revenues, Depreciation and amortization increased by 2% from the prior year.
Goodwill and intangible asset impairments
In 2024, we recorded a goodwill impairment charge of $465.7 primarily due to sustained declines in our share price and
worsening macroeconomic and market conditions.
31
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
In December 2024, the Board approved the wind-down of three product groups within the LS&H and A&G segments in
connection with the Value Creation Plan and we recorded an intangible assets impairment charge of $75.0 to write down the
carrying values of the associated intangibles, primarily technology and content assets, to their respective estimated net book
values.
For additional information regarding our recent goodwill and intangible asset impairments, see Note 6 - Other Intangible
Assets, Net and Goodwill included in Part II, Item 8 of this annual report.
Restructuring and other impairments
Restructuring and other impairment expense includes costs associated with certain involuntary termination benefits, contract
terminations, and other exit or disposal activities, as well as impairment charges primarily associated with right-of-use assets.
Restructuring charges during the year ended December 31, 2025 were associated with the Value Creation Plan, which began
in the fourth quarter of 2024. Restructuring charges for the year ended December 31, 2024 were primarily associated with the
Segment Optimization Program, which was substantively completed in 2024.
As of December 31, 2025, the Value Creation Plan is our only active restructuring program. We have extended this program
to include additional reductions in force and lease rationalization activities in 2026. We expect to incur approximately $25 of
additional costs associated with this plan, primarily in 2026. For further information regarding our restructuring initiatives
and impairment impacts, see Note 12 - Restructuring and Other Impairments included in Part II, Item 8 of this annual report.
Other operating expense (income), net
The change of $70.4 compared to 2024 was primarily driven by a prior year net gain on sale of $54.7 from divestitures
completed in 2024 and a $30.7 increase to expense from the net impact of realized and unrealized gains and losses on foreign
currency transactions, with the largest impacts derived from transactions denominated in GBP.
Interest expense, net
The decrease of 6% compared to 2024 was primarily driven by lower interest rates on our outstanding variable-rate debt and
reduced total debt outstanding.
Provision (benefit) for income taxes
The income tax provision of $7.2 in 2025 was primarily driven by the mix of tax jurisdictions in which pre-tax profits and
losses were recognized. These were partially offset by benefits of $21.7 and $10.9 in the U.S. and U.K., respectively, that
resulted from intra-entity transactions, as well as a $7.1 benefit due to a reduction in the Base Erosion and Anti-Abuse Tax
(“BEAT”).
The income tax provision of $82.9 in 2024 was primarily driven by a $53.9 expense related to a new 15% Multinational
Corporate Income Tax (“MCIT”) enacted by a tax law change in Jersey, Channel Islands, a $10.2 expense to establish
valuation allowances, and expenses from the mix of tax jurisdictions in which pre-tax profits and losses were recognized.
These were partially offset by benefits of $16.6 and $14.2 associated with the impairment of intangible assets and goodwill,
respectively. Although the MCIT is designed to align with certain elements of the OECD model rules, it is distinct legislation
that enacted a new 15% corporate income tax, which qualifies as a regular corporate income tax under ASC 740.
32
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measures)
The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the years ended
December 31, 2025 and 2024, and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss)
margin for the same periods:
| Year Ended December 31, | |||
|---|---|---|---|
| 2025 | 2024 | ||
| Net income (loss) | $(201.1) | $(636.7) | |
| Provision (benefit) for income taxes | 7.2 | 82.9 | |
| Depreciation and amortization | 757.2 | 727.0 | |
| Interest expense, net | 265.4 | 283.4 | |
| Share-based compensation expense | 63.0 | 60.6 | |
| Goodwill and intangible asset impairments | 15.0 | 540.7 | |
| Restructuring and other impairments | 50.7 | 19.6 | |
| Fair value adjustment of warrants | — | (5.2) | |
| Transaction related costs | 22.5 | 17.9 | |
| Other(1) | 21.9 | (29.8) | |
| Adjusted EBITDA | $1,001.8 | $1,060.4 | |
| Net income (loss) margin | (8.2)% | (24.9)% | |
| Adjusted EBITDA margin | 40.8% | 41.5% | |
| (1) Includes the net impact of foreign exchange gains and losses related to the remeasurement of balances and other items that do not reflect our ongoing operating performance. This amount includes a net gain on sale of $54.7 from divestitures in 2024. See Note 2 - Acquisitions and Divestitures for further details. |
Liquidity and Capital Resources
We finance our operations primarily through cash generated by operating activities and through borrowing activities. As of
December 31, 2025, we had $329.2 of cash on hand and $768.5 of available borrowing capacity under our revolving credit
facility.
Cash Flows
We have historically generated significant cash flows from our operating activities. Our subscription-based revenue model
provides a steady and predictable source of revenue and cash flow for us, as we typically receive payments from our
customers at the start of the subscription period (usually 12 months) and recognize revenue ratably throughout that period.
Our high customer renewal rate, stable margins, and efforts to improve operating efficiencies and working capital
management also contribute to our ability to generate solid operating cash flows.
The following table discloses our consolidated cash flows by activity for the periods presented:
| Year Ended December 31, | Change | ||||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | $ | % | ||||
| Net cash provided by operating activities | $628.5 | $646.6 | $(18.1) | (3)% | |||
| Net cash used for investing activities | $(263.2) | $(236.7) | $(26.5) | 11% | |||
| Net cash used for financing activities | $(343.1) | $(470.1) | $127.0 | (27)% |
The decrease in net cash provided by operating activities was primarily due to higher restructuring costs and related cash
outflows compared to the prior year.
The increase in net cash used for investing activities was due to net inflows from acquisition and divestiture-related activity
in the prior year that did not recur in the current year, partially offset by lower capital expenditures in the current year.
The decrease in net cash used for financing activities was primarily driven by higher debt repayments and dividends paid to
holders of our mandatory convertible preferred shares in the prior year, partially offset by increased share repurchase activity
in the current year.
33
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Free cash flow (non-GAAP measure)
The following table reconciles our non-GAAP Free cash flow measure to Net cash provided by operating activities:
| Year Ended December 31, | Change | ||||||
|---|---|---|---|---|---|---|---|
| 2025 | 2024 | $ | % | ||||
| Net cash provided by operating activities | $628.5 | $646.6 | $(18.1) | (3)% | |||
| Capital expenditures | (263.2) | (289.1) | 25.9 | (9)% | |||
| Free cash flow | $365.3 | $357.5 | $7.8 | 2% |
Free cash flow increased primarily due to a significant reduction in capital expenditures, partially offset by the change in net
cash provided by operating activities described above. Our capital expenditures in both periods presented consisted primarily
of capitalized labor associated with product and content development.
Borrowings
As of December 31, 2025, we had $4,441.8 of outstanding borrowings under our notes and credit facilities. We incurred
$265.4 and $283.4 of interest expense associated with our debt obligations for the years ended December 31, 2025 and 2024,
respectively. Our contingent liabilities consist primarily of letters of credit and performance bonds and other similar
obligations in the ordinary course of business.
In May 2025, we entered into an incremental $500.0 tranche of term loans under our term loan facility. These term loans
carry an interest rate margin of 325 basis points per annum in the case of loans bearing interest by reference to term SOFR
and are not subject to amortization. We used the issuance proceeds to redeem $500.0 aggregate principal amount of our
outstanding Senior Secured Notes due 2026, plus accrued and unpaid interest through the May 30, 2025 redemption date. To
offset the incremental interest expense impact of this refinancing, we entered into foreign currency-swap transactions that
economically reduce the interest rate by approximately 2%. In August 2025, we amended our $700.0 revolving credit facility
by increasing it to a $775.0 facility and, in September 2025, we redeemed an additional $100.0 of our outstanding Senior
Secured Notes due 2026, plus accrued and unpaid interest through the September 30, 2025 redemption date. In January 2026,
we redeemed the remaining $100.0 of our outstanding Senior Secured Notes due 2026, plus accrued and unpaid interest
through the January 30, 2026 redemption date.
For further discussion related to our outstanding borrowings and associated hedging activities, see Note 9 - Debt and Note 8 -
Derivative Instruments included in Part II, Item 8 of this annual report.
Commitments and Contingencies
In addition to the scheduled future debt repayments that we will need to make, we also have commitments and plans related
to our share repurchase program, capital expenditures. and other commitments in the ordinary course of business, primarily
for cloud computing services and software license costs. Any amounts for which we are currently liable are reflected in our
Consolidated Balance Sheets as Accounts payable or Accrued expenses and other current liabilities.
In December 2024, the Board authorized a new share repurchase program of up to $500.0 of our ordinary shares for a period
of two years, from January 1, 2025 through December 31, 2026. As of December 31, 2025, we had $275.5 of availability
remaining. The share repurchase program does not obligate us to repurchase any set dollar amount or number of shares and
may be modified, suspended, or terminated at any time without prior notice. Under the share repurchase program, we are
authorized to conduct open-market purchases of our ordinary shares from time to time through any method or program,
including through Rule 10b5-1 trading plans or the use of other techniques as permitted by our shareholder authorization,
approved by the Board or a designated committee thereof, and subject to availability of ordinary shares, price, market
conditions, alternative uses of capital, and applicable regulatory requirements, at management’s discretion.
We estimate capital expenditures to be approximately $250 during 2026, primarily for product and content development. We
also expect to incur approximately $210 of primarily cloud computing services and software license costs in 2026 for
ongoing support of our existing business operations. We expect to fund these expenditures primarily through cash flows from
operations. Any amounts for which we are presently liable are reflected in our Consolidated Balance Sheets as Accounts
payable or Accrued expenses and other current liabilities.
From time to time, we may seek to refinance, redeem, repurchase, or retire our outstanding debt in open market purchases,
privately negotiated transactions, tender offers, or otherwise. Such refinancings, redemptions, repurchases, or retirements, if
any, would depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
34
Table of Contents
CLARIVATE PLC
Management’s Discussion and Analysis of Financial Condition and Results of Operations
In addition, we are engaged in various legal proceedings and claims that have arisen in the ordinary course of business and
have taken what we believe to be adequate reserves related to the litigation and threatened claims. We maintain appropriate
insurance policies in place, which are likely to provide some coverage for these liabilities or other losses that may arise from
litigation matters. For additional information about our legal proceedings and claims, see Note 16 - Commitments and
Contingencies included in Part II, Item 8 of this annual report.
We require and will continue to need significant cash resources to, among other things, meet our debt service requirements,
fund our share repurchase program, fund our working capital requirements, make capital expenditures (including product and
content development), redeem or repurchase our outstanding indebtedness, and expand our business through acquisitions.
Based on our forecasts, we believe that cash flow from operations, available cash on hand, borrowing capacity, and access to
capital markets will be adequate to service debt, meet liquidity needs, and fund capital expenditures and other business plans
for both the next 12 months and the foreseeable future. Our future capital requirements will depend on many factors,
including the number of future acquisitions and the timing and extent of spending to support product development efforts. We
could be required, or could elect, to seek additional funding through public or private equity or debt financings; however,
additional funds may not be available on terms acceptable to us.