The accompanying earnings call presentation is available on the Investor Relations section of the company's website. Reconciliation of these measures to GAAP measures are available in our earnings release and supplemental presentation on our website. In 2025, we delivered on our initial full-year financial guide for the first time since 2019. The value creation plan is working, as evidenced by improved performance and forward outlook.

We have accelerated organic ACV, organic recurring revenue, and enhanced our free cash flow conversion. Looking ahead to 2026, our guidance calls for 10% free cash flow growth and continued improvement in our KPIs. With strong cash generation, stable revenue retention rates of 93%, and a business that generates 97% of its revenue from proprietary solutions enhanced by AI, we see tremendous opportunity in front of us. We believe selling this segment will allow further emphasis on the A&G and IP market and strengthen our balance sheet through reduced leverage.

While we understand the market's concern around AI disruption for software and information services companies in general, we believe our business is highly proprietary with significant moats. Today, 97% of Clarivate's revenue come from proprietary assets, including intelligence solutions, workflow software, and tech-enabled services. This reflects decades of strategic investment in proprietary content, expert enrichment and curation, and the development of software products embedded across customer workflows. We see this new technology as a legitimate accelerant to our organic growth.

What went well
  • Delivered on the initial full-year guidance for the first time since 2019, with organic ACV growth of nearly 2% (high end of the range) and organic recurring revenue mix improved to 88%.
  • Produced more than $1 billion of adjusted EBITDA and $365 million of free cash flow, toward the high end of the range.
  • Q4 net income turned positive at $3 million, a $195 million year-over-year improvement, and adjusted diluted EPS rose to $0.20 with a Q4 margin run rate just over 41%.
  • Launched a process to sell the Life Sciences & Healthcare segment to sharpen focus and reduce leverage, and delivered 270 bps of year-over-year improvement in IP annuities revenue.
  • Guided 2026 to 2-3% organic ACV growth, about 10% free cash flow growth to ~$400 million, adjusted EPS ~$0.75 (up ~9%), and margin near 43%; retired 56 million shares (about 7%) via $225 million of buybacks.
What went wrong
  • Full-year revenue declined about $116 million to $2.455 billion, driven entirely by disposals and divestitures, with organic revenue essentially flat.
  • Q4 total organic revenue declined about 1% as recurring and transactional revenues offset roughly 1% subscription growth.
  • Operating expenses were higher on continued growth investment and incentive compensation, causing about a $16 million Q4 profit decline.
  • Cash taxes are expected to rise in 2026 on a new Jersey corporate tax, and working capital is expected to be a roughly $20 million use next year.
  • The LS&H sale remained uncertain, with active discussions but no guarantee of an agreement.

More on Clarivate Plc

Reported 2026-02-24 · figures from the Clarivate Plc Q4 2025 earnings call.

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