London, November 3rd / PRNewswire / -- Clarivate Plc ( NYSE : CLVT, hereinafter referred to as "the Company" or " Clarivate ") is a globally leading provider of transformative intelligence. Today, the Company announced its financial results for the third quarter ending September 30, 2026.
Management Commentary
CEO Matti Shem Tov stated:
"Third-quarter performance continued to improve across key indicators, including growth in organic recurring revenue, as well as a recovery in the annual contract value of our Intellectual Property (IP) segment (ACV). We also achieved an important milestone by completing the divestiture of our Life Sciences and Healthcare (Life Sciences & Healthcare) business ahead of schedule, which enhances our ability to create value in two of our leading market segments: academia and government (Academia & Government), as well as intellectual property. The commercialization progress and customer recognition driven by innovation in our A&G and IP businesses, led by AI, continue to strengthen, giving 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 business (“LS &H”) that was divested on October 6, 2026; whereas in the third quarter of 2025, total revenue was 623.1 million US dollars, mainly due to non-endogenous divestitures. Excluding the LS &H business, which is now classified as discontinued operations, the total revenue from continuing operations was 481.6 million US dollars, and in the third quarter of 2025 it was 530.3 million US dollars, 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% year-on-year, reflecting the company's continued progress towards a more sustainable revenue structure 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 third quarter of 2025, the net loss was 28.3 million US dollars, which is a diluted loss of 0.04 US dollars per share. The increase in losses was mainly due to a non-cash impairment expense of 62.2 million US dollars related to the LS &H goodwill. Including LS &H, the adjusted net profit was 136 million US dollars, which is an earnings per share of 0.21 US dollars after dilution; in the third quarter of 2025, it was 119.3 million US dollars, which is an earnings per share of 0.18 US dollars after dilution. Including LS &H, the adjusted EBITDA was 245.3 million US dollars, while in the third quarter of 2025 it was 252.4 million US dollars.
Performance for the first nine months of 2026
Total revenue amounted to 1.7407 billion US dollars, including LS. Total revenue for the first nine months of 2025 was 1.8382 billion US dollars, mainly due to non-endogenous divestitures. Excluding LS, which has now been classified as a discontinued operation, total revenue from continuing operations was 1.4724 billion US dollars, while for the same period in 2025 it was 1.5467 billion US dollars, also primarily due to non-endogenous divestitures.
Organic revenue from ongoing operations increased by 0.1%, of which organic recurring revenue (subscriptions and recurring income) grew 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 impairment expense of 283.9 million US dollars related to the LS &H goodwill. Including LS &H, the adjusted net profit was 378.4 million US dollars, which is an adjusted earnings per share of 0.59 US dollars; in the first nine months of 2025, it was 338.4 million US dollars, which is an adjusted earnings per share of 0.49 US dollars. 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) achieved operating cash flow of $399 million and free cash flow of $233.1 million.
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 price increase 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 intellectual property business volume.
Recurring revenue, which consists of subscriptions and recurring income, grew organically by 1.3%, 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 business segments. Part of this is because customers are shifting to subscription products with higher profit margins, and the company is also working to shift its revenue towards more recurring income.
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 the preferred secured notes due in November 2026. Additionally, through a series of debt repurchases, a total of $192.6 million in principal of the preferred secured notes due in 2028 and 2029 was repurchased at a discount of about 5% below par value and subsequently cancelled.
In the first nine months of 2026, the net cash flow from operating activities, including the termination of business operations, was $399 million, which is lower than the $468.6 million in the same period of the previous year. In the first nine months of 2026, the free cash flow from operating activities, including the termination of business operations, was $233.1 million, which is lower than the $276.1 million in the same period of the previous year.
On October 6, 2026, the company completed the sale of LS &H business, obtaining a net cash proceeds of $488.4 million.
2026 Outlook Update, Excluding Business Termination (Forward-Looking Statement)
The outlook for the entire year 2026 presented below assumes that there will be no new acquisitions, divestitures, or unforeseen events. The forecast for the fourth quarter of 2026 also assumes that there will be no new acquisitions, divestitures, or unforeseen events, in addition to the completion of the LS &H divestiture.
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 webcast of the performance conference can be viewed through the company's website on the Investor Relations page. Please visit: https :// events.q4inc.com / attendee /388781202.
Interested individuals can 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 388 781 202.
The live webcast replay will also be available at https :// ir.clarivate.com two hours after the end of the teleconference, and will be retained for one year.
Use of non-GAAP financial indicators
This press release contains 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 GAAP recognized terms, nor are they measures of financial condition or liquidity. They should not be considered as an alternative to the current period's profit or loss calculated in accordance with GAAP, or as an alternative indicator of cash flows from operating activities. Therefore, these indicators should not be viewed in isolation, nor should they be regarded as substitutes for financial indicators or operating results calculated in accordance with GAAP.
The company uses non-GAAP indicators in its internal operations and financial decision-making to assess business performance, employee compensation evaluation, and resource allocation. The company believes that these indicators help to focus on what it considers to be more reflective of ongoing operational performance and the ability to generate cash from business 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 comparable to the company, and many of these companies provide non-GAAP indicators when disclosing their financial results. In addition, the company believes that these indicators facilitate comparison of its performance with that of 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 non-GAAP financial indicators disclosed by the company may not be directly comparable to those of other companies with the same names.
The definition and adjustment table between the non-GAAP indicators and the most directly comparable GAAP indicators can be found in the appendix 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. Therefore, under the “Safe Harbor Provisions” of the 1995 Private Securities Litigation Reform Act, these statements constitute or may be deemed to constitute “forward-looking statements.” Such forward-looking statements include all non-historical factual matters, such as any future strategic transactions the company may explore, the anticipated uses of proceeds from the divestiture of its life sciences and healthcare business and related cost savings or other benefits, operating performance, financial condition, liquidity, capital allocation plans and stock repurchases, foreign exchange impacts, prospects, growth, strategy 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 other growth strategies and their expected benefits, global macroeconomic uncertainties and volatility, 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, as well as 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. These forward-looking 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 Item 1A “Risk Factors” of the company’s 10-K annual report, as well as factors described in other documents submitted by the company to the U.S. Securities and Exchange Commission (SEC). There is no guarantee that future developments affecting the company will be in line with the company’s expectations.If one or more of the above risks or uncertainties occur, or if any assumptions prove to be incorrect, the actual results may differ significantly from the forecasts contained 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, which are also available on the company's website at www.clarivate.com.
About Clarivate
Clarivate is a globally leading provider of transformative intelligence. The company offers a wealth of data, insights and analysis, 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 license agreements based on customer subscriptions for the next 12 months, assuming that agreements that expire during the measurement period will be renewed at the current price level. The company's organic ACV is expected to grow by 1.8% compared to September 30, 2025, mainly driven by improvements in product pricing. As of September 30, 2026, the company's total ACV has 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 divided by revenue type and business segment, as well as the driving factors for changes during the period.
Adjustments to several indicators other than GAAP
Adjusted EBITDA and adjusted EBITDA profit margins
After adjustment, EBITDA refers to net profit (loss) before deducting income tax expenses (income), depreciation and amortization, and net interest expenses. It further adjusts to exclude the impacts of equity incentives, impairment, restructuring costs, non-cash fair value adjustments of certain financial instruments, acquisition and/or disposal-related transaction costs, unrealized foreign exchange gains and losses, legal settlements, and other items that the company considers do not reflect the ongoing operating performance of the current period's net profit (loss). The net profit (loss) margin is calculated by dividing net profit (loss) by revenue. After adjustment, 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 (including discontinued operations) and adjusted EBITDA profit margins of the company for three months and nine months ending September 30, 2026, and September 30, 2025, respectively. These non-GAAP indicators are then compared with the net profit (loss) for the same periods, as well as 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 amortization related to the acquisition of intangible assets, equity incentives, impairment, restructuring costs, non-cash fair value adjustments of certain financial instruments, transaction costs related to acquisitions and/or dispositions, unrealized foreign exchange gains and losses, legal settlements, and other items in the current period that the company deems do not reflect ongoing operating performance. It is then adjusted by adding the corresponding impact on income tax.
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 (including discontinued operations) and adjusted diluted earnings per share (including discontinued operations) for three months and nine months ending September 30, 2026, and September 30, 2025, respectively. 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), and this non-GAAP indicator is adjusted compared to 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 presents the adjusted diluted earnings per share for the company's outlook for 2026 (including the impact of the termination of operations in the first nine months), and compares 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 in the company's outlook for 2026 (including 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.
