Clarivate's Q2 2025: Diverging Views on Funding Cuts, Revenue Outlook, and AI Patent Trends

Organic Growth and Subscription Revenue:
- Clarivate reported organic ACV growth of 1.3% in Q2 2025 compared to the previous year, with a 40 basis point improvement from the end of the previous year.
- The growth was driven by higher renewal rates and new business wins in the subscription book, as well as internal cost efficiencies that increased the adjusted EBITDA margin to 41%.

AI and Operational Efficiency:
- Clarivate launched 10 cutting-edge product and AI-powered capabilities since the Value Creation Plan's inception, focusing on AI-enabled subscription-based solutions.
- This strategic focus has enhanced sales execution and operational efficiency, contributing to improved performance across all segments.

IP Segment Recovery:
- The IP segment returned to organic recurring revenue growth in the first half of 2025, with an increase of about 1.5%.
- This recovery is attributed to the surge in AI innovation, leading to a significant increase in patent filings, which are expected to drive IP renewal business growth in the future.

Disposals and Strategic Review:
- Clarivate is narrowing the scope of their review for strategic alternatives, aiming to complete this work in the second half of the year and communicate results with year-end performance.
- The disposals and strategic review are part of the company's Value Creation Plan, which is focused on optimizing business model, capital allocation, and operational effectiveness.