London, November 3rd / PRNewswire / -- Clarivate Plc (New York Stock Exchange ticker: CLVT, hereinafter referred to as "the Company" or " Clarivate") today announced its third-quarter results for the period ending September 30, 2026. The Company is a global provider of transformative intelligence services.

Executive Comment

CEO Matti Shem Tov stated:

"Third-quarter performance continued to improve across key indicators, including growth in organic recurring revenue, as well as a return to positive annual contract value ( ACV ) in the intellectual property ( IP ) segment. We also achieved an important milestone with the divestiture of our life sciences and healthcare ( Life Sciences & Healthcare ) business unit, which allows us to create greater value in two of our leading segments: academia and government ( Academia & Government ) as well as intellectual property. The innovation driven by AI within the A&G and IP businesses is gaining increasing recognition from the business community and customer validation, which gives us confidence to fulfill our commitments to accelerate sustained organic growth, expand free cash flow, and reduce leverage."

Executive Vice President and Chief Financial Officer Michael Easton stated:

"We have seen the benefits of disciplined execution across all aspects of our business, with an improved growth trend, stable profit margins, and a continuous generation of free cash flow. Our focus remains on transforming organic growth into sustainable profitability and free cash flow, while maintaining a prudent capital allocation approach. Looking ahead, we are well-prepared to further strengthen our financial position and enhance financial flexibility."

Third Quarter 2026 Performance

Total revenue amounted to 567.9 million US dollars, which includes the Life Sciences and Healthcare segment that was divested on October 6, 2026; the total revenue for the same period last year was 623.1 million US dollars, mainly due to non-endogenous divestitures. Excluding the LS &H segment, which is now listed as a discontinued business, the total revenue was 481.6 million US dollars, compared to 530.3 million US dollars in the third quarter of 2025, also mainly due to non-endogenous divestitures.

Organic revenue from ongoing operations increased by 0.4%, of which organic subscription revenue grew by 1.5% and organic recurring revenue increased by 0.7%. This growth was partially offset by a decline in organic transaction revenue.

The organic ACV of the ongoing business increased by 1.8% as of September 30, 2025, reflecting the company's continuous progress towards a more sustainable revenue base that is primarily based on subscriptions.

Including LS &H, the net loss was 80.8 million US dollars, which is a diluted loss of 0.13 US dollars per share; in the same period last year, the net loss was 28.3 million US dollars, which is a diluted loss of 0.04 US dollars per share. The increase in loss was mainly due to a non-cash goodwill impairment of 62.2 million US dollars related to LS &H. Including LS &H, the adjusted net profit was 136 million US dollars, which is 0.21 US dollars per share after dilution; in the same period last year, it was 119.3 million US dollars, which is 0.18 US dollars per share after dilution. Including LS &H, the adjusted EBITDA was 245.3 million US dollars, compared to 252.4 million US dollars in the third quarter of 2025.

Performance for the first nine months of 2026

Total revenue amounted to 1.7407 billion US dollars, including the LS &H segment; in the same period last year, it was 1.8382 billion US dollars, mainly due to non-endogenous divestitures. If the LS &H segment, which is now listed as a discontinued business, is excluded, total revenue would be 1.4724 billion US dollars, and for the first nine months of 2025, it was 1.5467 billion US dollars, also mainly due to non-endogenous divestitures.

Organic revenue growth from ongoing operations was 0.1%, of which organic recurring revenue (subscriptions and recurring income) increased by 0.9%, but this was offset by a decline in organic transaction revenue.

Including LS &H, the net loss was 389.6 million US dollars, which is a diluted loss of 0.61 US dollars per share; in the first nine months of 2025, the net loss was 204.2 million US dollars, which is a diluted loss of 0.30 US dollars per share. The increase in losses was mainly due to a non-cash goodwill impairment of 283.9 million US dollars related to LS &H. Including LS &H, the adjusted net profit was 378.4 million US dollars, which is 0.59 US dollars per share after dilution; in the same period last year, it was 338.4 million US dollars, which is 0.49 US dollars per share after dilution. Including LS &H, the adjusted EBITDA was 733.7 million US dollars, while in the first nine months of 2025 it was 747.2 million US dollars.

In the first nine months of 2026, Clarivate (including LS &H) generated cash flows from operating activities amounting to 399 million US dollars, with free cash flows reaching 233.1 million US dollars.

Some financial information

2026 Third Quarter Continuing Operations Commentary

Subscription revenue increased by $2.4 million to $338.3 million, representing a growth of 0.7%. Organic subscription revenue grew by 1.5%, mainly due to new sales and pricing measures.

Recurring revenue increased by $500,000 to $105.8 million, representing a growth of 0.5%. Organic recurring revenue grew by 0.7%, mainly due to an increase in the volume of IP business.

Recurring revenue, which consists of subscription income and recurring income, grew by 1.3% on an organic basis, amounting to $5.7 million.

Transaction revenue decreased by $51.6 million to $37.5 million, mainly due to the gradual withdrawal of some product teams within A&G. On an organic basis, transaction revenue fell by 12.4%, or $3.9 million, primarily due to reduced activity in two segments. Part of this is attributed to customers shifting to subscription products with higher profit margins, which is in line with the company's strategy of focusing on recurring revenue.

Balance Sheet and Cash Flow

As of September 30, 2026, cash and cash equivalents amounted to $257 million, which is a decrease of $72.2 million compared to December 31, 2025.

As of September 30, 2026, the total debt amounted to $4.1761 billion, which is a reduction of $293.8 million compared to the previous year. The reasons for this include: the early repayment of $100 million in debt in January 2026, which allowed for the full redemption of senior secured notes due in November 2026; and through a series of debt repurchases, a total of $192.6 million in principal of senior secured notes due in 2028 and 2029 was repurchased at a discount of approximately 5% below par value and subsequently cancelled.

In the first nine months of 2026 (including the termination of business operations), the net cash flow from operating activities was $399 million, compared to $468.6 million in the same period of the previous year. In the first nine months of 2026 (including the termination of business operations), the free cash flow was $233.1 million, whereas it was $276.1 million in the same period of the previous year.

On October 6, 2026, the company completed the sale of the LS &H sector, with net cash income amounting to 488.4 million US dollars.

Updated outlook for 2026 (excluding termination of business operations, forward-looking statements)

The outlook for the entire year of 2026 presented below assumes that there will be no new acquisitions, divestitures, or other unforeseen events. Related to the completion of the divestiture with LS &H, the outlook for the fourth quarter of 2026 also assumes that there will be no new acquisitions, divestitures, or other unforeseen events.

Teleconference and online live broadcast

Clarivate will hold a teleconference and webcast at 8:30 a.m. Eastern Time today to review the third-quarter performance. This webcast is open to all interested parties and may contain forward-looking information.

The live broadcast of the performance conference can be accessed through the Investor Relations page on the company's official website. To participate in the live broadcast, please visit: https :// events.q4inc.com / attendee /388781202.

Interested parties may also listen to the live audio broadcast. Participants within the United States can call 833-461-5787; international participants can call +1 585-542-9983 (long-distance charges apply). The meeting ID is ID 388 781 202.

Live broadcast replays will also be available at https :// ir.clarivate.com two hours after the live broadcast ends, and will be retained for one year.

Use of non-GAAP financial indicators

This press release contains several financial indicators that have not been prepared in accordance with generally accepted accounting principles in the United States (GAAP), including adjusted EBITDA, adjusted EBITDA profit margins, adjusted net profit, adjusted earnings per share diluted, and free cash flow. Non-GAAP financial indicators are not terms recognized under GAAP, nor are they indicators for measuring financial condition or liquidity. They should not be considered as profits or losses determined under the GAAP framework, nor as substitutes for operating cash flow. Therefore, these indicators should not be viewed in isolation, nor should they be used as substitutes for GAAP financial indicators or operating results.

The company stated that it uses these non-GAAP indicators internally for operational and financial decision-making purposes, in order to assess business performance, employee compensation, and to determine resource allocation. The company believes that these indicators help to focus on what it considers to be more reliable measures of ongoing operational performance and the ability to generate cash from operating activities; it also believes that investors may find these non-GAAP financial indicators useful for the same reasons. Securities analysts, investors, and other relevant parties also frequently use non-GAAP indicators when evaluating companies similar to the one in question, and many of these companies disclose such indicators in their performance reports. Furthermore, the company believes that these indicators are helpful for comparison with peer companies, as they provide users with valuable insights into key components of GAAP financial disclosures. However, non-GAAP indicators have their limitations as analytical tools, and not all companies use the same calculation methods; therefore, the disclosure of the company's non-GAAP financial indicators may not be directly comparable to those of other companies with the same names.

The definitions and adjustment tables between the non-GAAP indicators and the most directly comparable GAAP indicators can be found in the appendices of this press release. The disclosure of non-GAAP indicators by the company should not be construed as implying that future performance will not be affected by any adjustment items, or that all or part of any forecasts and estimates will be realized.

Forward-looking Statements

This press release contains statements that express the company's views, expectations, beliefs, plans, objectives, assumptions, or predictions regarding future events or results, and therefore constitute or may be deemed to constitute “forward-looking statements” as defined by the “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include various non-historical matters, such as potential future strategic transactions the company may explore, the anticipated uses of proceeds from the sale of its life sciences and healthcare businesses and related cost savings or other benefits, operating results, financial conditions, liquidity, capital allocation plans and stock repurchases, foreign exchange impacts, prospects, growth, strategies, and shareholder value, the market in which the company operates, financial guidance for the fiscal year 2026 and its key drivers and underlying assumptions, value creation plans and their impact on or expected benefits, global macroeconomic uncertainties and fluctuations, the impact of artificial intelligence (AI) on the company’s business and strategy, and the timing of the aforementioned matters. Such forward-looking statements can typically be identified by words such as “believes,” “estimates,” “expects,” “anticipates,” “plans,” “intends,” “projects,” “may,” “will,” “should,” and their negative forms, other variations, or similar expressions. These forward-looking statements are based on current market information available to management as well as management’s expectations, beliefs, and projections regarding future events that may affect the company. Such statements involve various risks and uncertainties (some of which are beyond the company’s control) or other assumptions that could lead to significant differences between actual results or performance and those expressed or implied in these forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the company’s annual report Form 10-K and Form 1A “Risk Factors,” as well as factors disclosed in other documents submitted by the company to the U.S. Securities and Exchange Commission (SEC).It cannot be guaranteed that future developments will be as expected by the company. If one or more risks or uncertainties materialize, or if any assumptions prove to be incorrect, actual results may deviate significantly from those predicted in these forward-looking statements. Except as required by securities laws, the company assumes no obligation to update or revise any forward-looking statements due to new information, future events, or other reasons. Please refer to the public documents submitted by the company to SEC; these documents are also available on the company's website at www.clarivate.com.

About Clarivate

Clarivate is a leading global provider of transformative intelligence services. The company offers a wealth of data, insights and analyses, workflow solutions, and expert services in the fields of academia, government, and intellectual property. For more information, please visit www.clarivate.com.

Supplement income information

The annual contract value ( ACV ) at any given point in time represents the annualized value of all valid customer subscription-based licensing agreements for the next 12 months, assuming that contracts that expire during the measurement period are renewed at the current price level. The company's organic ACV increased by 1.8% as of September 30, 2025, mainly driven by improvements in product pricing. The company's total ACV as of September 30, 2026, increased by 3.6% compared to September 30, 2025, primarily due to improvements in product pricing and foreign exchange fluctuations.

The following table shows the company's revenue categorized by type and sector, as well as various factors that drove the changes during the period in question.

Adjustments to several indicators other than GAAP

Adjusted EBITDA and adjusted EBITDA profit margins

After adjustment, EBITDA refers to the amount of net profit (loss) before deducting income tax expenses (benefits), depreciation and amortization, and net interest expenses. It is further adjusted to exclude the effects of share-based payments, impairment, restructuring costs, non-cash adjustments to the fair value of certain financial instruments, transaction costs related to acquisitions and/or dispositions, unrealized foreign exchange gains and losses, legal settlements, and other items that the company considers do not reflect ongoing operating performance. The net profit (loss) margin is calculated by dividing net profit (loss) by revenue. The adjusted EBITDA margin is calculated by dividing the adjusted EBITDA by revenue.

The following table shows the adjusted EBITDA and adjusted EBITDA profit margins of the company for the three months and nine months ending September 30, 2026, and September 30, 2025, respectively. These non-GAAP indicators are then adjusted in comparison with the after-tax income (loss) from continuing operations and the profit margin from continuing operations for the same periods:

The following table shows the adjusted EBITDA and adjusted EBITDA profit margins of the company for the three-month and nine-month periods ending September 30, 2026, and September 30, 2025, including the termination of business operations. These non-GAAP indicators are then adjusted in comparison with the net profit (loss) for the same periods and the net profit (loss) margin:

Adjusted net profit and adjusted diluted earnings per share

Adjusted net profit refers to the net profit (loss) after excluding the effects of amortization related to the acquisition of intangible assets, share-based payments, impairment, restructuring costs, non-cash adjustments to the fair value of certain financial instruments, transaction costs related to acquisitions and/or dispositions, unrealized foreign exchange gains and losses, legal settlements, and other items that the company deems do not reflect ongoing operating performance. It also includes the addition back of the income tax effects related to these adjustments.

The adjusted diluted earnings per share are calculated by dividing the adjusted net profit by the adjusted diluted weighted average number of shares. The calculation of the adjusted diluted weighted average number of shares assumes that all relevant instruments have a dilutive effect.

The following table shows the company's adjusted net profit and adjusted diluted earnings per share for three months and nine months ending September 30, 2026 and 2025, including the termination of business operations. These non-GAAP indicators are compared with the net profit (loss) and diluted earnings per share for the same periods:

Free Cash Flow

Free cash flow refers to the net cash flow generated from operating activities minus capital expenditures. The following table shows the company's free cash flow for three months and nine months ending September 30, 2026 and 2025, including the termination of operating businesses. This non-GAAP indicator is then adjusted against the net cash flow generated from operating activities during the same period:

Adjustments to several indicators other than GAAP - Outlook for 2026

Adjusted EBITDA and adjusted EBITDA profit margins

The following table shows the adjusted EBITDA and adjusted EBITDA profit margins for the company's ongoing operations in its 2026 outlook, and these non-GAAP indicators are compared with the net profit (loss) for the same period, as well as the net profit (loss) margin:

Earnings per share diluted after adjustment

The following table shows the adjusted diluted earnings per share for the company's outlook for 2026, including the impact of the termination of operating activities in the first nine months, and adjusts this non-GAAP indicator with the earnings per share of net profit (loss) for the same period:

Free Cash Flow

The following table presents the free cash flow forecast for the company for 2026, taking into account the impact of terminating operations in the first nine months, and adjusts this non-GAAP indicator with the net cash flow generated from operating activities during the same period.