Clarivate 2025 Q1 Earnings Net Income Widened by 38.5%

Clarivate (CLVT) reported its fiscal 2025 Q1 earnings on April 29th, 2025. The company's financial results for the quarter showed a decline in revenue and an increase in net loss compared to the previous year. Despite the challenges, clarivate reaffirmed its full-year 2025 outlook. The revenue of $593.7 million surpassed the expectations set by analysts, while the adjusted earnings per share of $0.14 exceeded the consensus estimate of $0.12. The company maintained its guidance, projecting no changes to its revenue and adjusted EPS targets for the full year.

Revenue

Clarivate's total revenue saw a decrease of 4.4% to $593.7 million for Q1 2025, compared to $621.2 million in Q1 2024. Subscription revenue amounted to $388.6 million, impacted by the ScholarOne product group divestiture. Re-occurring revenue rose by 3.3% to $105.9 million, driven by increased IP patent renewals. Transactional revenue declined by 14.2% to $99.2 million, largely due to the Valipat product group divestiture and product group wind-downs.

Earnings/Net Income

Clarivate experienced a deepening net loss of $103.9 million, or $0.15 per share, in Q1 2025, a 38.5% increase from the $75 million loss in Q1 2024. Adjusted net income was $95.8 million, or $0.14 per share. The EPS indicates a challenging financial period with expanding losses.

Post Earnings Price Action Review

Following Clarivate's earnings release, the stock displayed moderate short-term momentum, with a 3-Day win rate of 57.14%, indicating a tendency for the stock price to rise in the immediate aftermath. This momentum appears to extend slightly over a 10-day period, maintaining the same win rate, but diminishes over 30 days, with a win rate of 52.38%. The average returns reflect this trend, with a 3-Day return of 1.64%, a 10-Day return of 1.40%, and a 30-Day return of 1.14%. These figures suggest that while the earnings report can prompt short-lived positivity, its lasting impact on stock price is limited. The maximum return post-earnings was 4.61%, observed on the 48th day after release, underscoring the rarity of such significant gains. Overall, investors should anticipate modest returns and remain cautious of potential reversion to pre-earnings levels in the medium-term.

CEO Commentary

Matti Shem Tov, CEO, highlighted the positive trajectory in Q1 2025, noting improvements in organic ACV and renewal rates. He emphasized the shift to a subscription-centric model, with a recurring revenue mix of 83%, enhancing innovation and sales. Despite macroeconomic challenges, he expressed optimism about the company's solid start and progress on the Value Creation Plan.

Guidance

Clarivate reaffirmed its full-year 2025 outlook, anticipating revenue around $2.34 billion at midpoint and adjusted EBITDA between $940 million and $1 billion. The company projects diluted adjusted EPS between $0.60 and $0.70 and expects free cash flow near $340 million at midpoint, maintaining focus on profitability amid external challenges.

Additional News

In recent weeks, Clarivate has been active in share repurchases, buying back $50 million worth of ordinary shares, reflecting its commitment to returning value to shareholders. Additionally, the company launched the DRG Commercial Analytics 360 platform to support medtech companies in optimizing their commercial strategies. Furthermore, Clarivate announced a strategic partnership with Iprova, integrating invention creation solutions with its IP management software, IPfolio, to strengthen its position in the IP lifecycle management space.

Ask Aime: Clarivate's earnings reveal a complex market landscape, with revenue decline offsetting profitability gains.