Executive Summary

CCCS delivered Q1 2024 revenue of $227.2M (+11% YoY) and adjusted EBITDA of $93.7M (41% margin), both above guidance; GAAP net loss was $0.6M due to higher stock-based comp and interest, while adjusted net income was $54.8M ($0.09 diluted EPS) .
Management raised FY 2024 guidance midpoints to revenue $944–$950M (midpoint $947M) and adjusted EBITDA $389–$395M (midpoint $392M); introduced Q2 2024 guidance of revenue $228.5–$230.5M and adjusted EBITDA $89–$91M (midpoint 39% margin) .
Strategic catalysts: accelerating adoption of AI-enabled solutions (Estimate-STP, Subrogation, Impact Dynamics) and the new CCC Intelligent Experience “IX Cloud” event-driven architecture to simplify deployment and cross-solution usage .
Balance sheet and cash flow remained solid with $191.2M cash, $782.0M total debt, net leverage ~1.6x adjusted EBITDA, and free cash flow of $39.6M in Q1 (TTM FCF margin 24%) .

What Went Well and What Went Wrong

What Went Well

Strong top-line and profitability: revenue +11% YoY to $227.2M; adjusted EBITDA +18% YoY to $93.7M; adjusted gross margin 78% (+200 bps YoY) driven by operating leverage .
AI traction and network expansion: rising adoption of Estimate-STP, Subrogation, Impact Dynamics; addition of repair facilities and parts suppliers; “IX Cloud” to speed multi-solution deployment (“customers do not need to upgrade… it just gets better”) .
KPI resilience: software GDR 99% and NDR 1.07, sustaining predictable growth via upsell/cross-sell; repair shop package upgrades and casualty/parts strength cited by CFO .

What Went Wrong

GAAP profitability pressure: GAAP net loss of $0.6M vs GAAP net income of $2.2M a year ago, driven by higher stock-based compensation and interest expense; GAAP operating income down YoY (to $7.8M from $13.3M) .
Elevated costs: IT hosting costs increased during decommissioning of legacy cloud environment; stock-based compensation stepped up in Q1 (expected to normalize to ~12–14% of revenue in 2025) .
Margin seasonality: management expects Q2 to be the margin low point due to employee expense resets and industry conference costs, with second-half margins above first-half .

Financial Results

Metric	Q1 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$204.9	$228.6	$227.2
GAAP Operating Income ($M)	$13.3	$19.4	$7.8
GAAP Net Income (Loss) ($M)	$2.2	$26.3	$(0.6)
GAAP Diluted EPS ($)	$0.00	$(0.01)	$(0.00)
Adjusted Operating Income ($M)	$70.3	$90.6	$84.1
Adjusted Net Income ($M)	$46.5	$59.0	$54.8
Adjusted Diluted EPS ($)	$0.07	$0.09	$0.09
Gross Margin (%)	72%	76%	74%
Adjusted Gross Margin (%)	76%	79%	78%
Adjusted EBITDA ($M)	$79.5	$100.1	$93.7
Adjusted EBITDA Margin (%)	39%	44%	41%
Cash from Operations ($M)	$33.1	$86.9	$55.2
Free Cash Flow ($M)	$18.5	$75.1	$39.6

Segment breakdown: Not disclosed; CCCS reports consolidated results .

KPIs

KPI	Q1 2023	Q4 2023	Q1 2024
Software Gross Dollar Retention (GDR)	98–99% (consistent since 1Q20)	99%	99%
Software Net Dollar Retention (NDR)	1.07	1.08	1.07
Repair Facilities on CCC Network	~29,500	~29,500	“almost 5,000 used JumpStart in Q1”
Parts Suppliers on CCC Network	~5,000	~5,000	Steady; electronic parts ordering adoption rising
Net Leverage (Adj. EBITDA basis)	—	1.7x	~1.6x
Cash & Equivalents ($M)	—	$195.6	$191.2
Total Debt ($M)	—	$784.0	$782.0

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q2 2024	N/A	$228.5–$230.5	New
Adjusted EBITDA ($M)	Q2 2024	N/A	$89–$91	New
Revenue ($M)	FY 2024	$942–$950	$944–$950	Raised (midpoint +$1M)
Adjusted EBITDA ($M)	FY 2024	$387–$395	$389–$395	Raised (midpoint +$1M)

Management emphasized Q2 margin seasonality (lowest quarter), emerging solutions contribution rising to ~2 pts of growth in 2024, and broader strength across insurance, casualty, and parts .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023 and Q4 2023)	Current Period (Q1 2024)	Trend
AI initiatives (Estimate-STP, Impact Dynamics, Subrogation)	Emerging solutions contributed ~1 pt growth; Estimate-STP under 1% of total claims but capable of ~10% of repairable claims; top-5 carrier contracted Impact Dynamics	Emerging solutions ~1 pt in Q1, expected ~2 pts for 2024; expanded use cases; strong client operating metrics and visibility to second-half step-up	Positive adoption momentum
IX Cloud architecture	Public cloud transition completed; 7 infrastructure benefits; setup for faster releases and scalability	IX Cloud overlay enhances event-driven orchestration; no upgrade needed; increases multi-solution deployment paths	Platform leverage increasing
Repair facility products (Mobile JumpStart, Amplify)	Mobile JumpStart introduced; time-to-initial-estimate cut to <2 minutes; Amplify websites integrated with CCC ONE	~5,000 facilities used JumpStart in Q1; continued category expansion opportunities (payments, digital presence)	Strong early traction
Casualty solutions	Growing adoption; Impact Dynamics bridges APD to casualty; multiple new casualty insurers added	Continued uptake; inbound Subrogation interest leading; linkage of physics-of-accident to medical outcomes	Expanding cross-sell
Parts/electronic ordering	17% industry parts volume ordered electronically on CCC; rising adoption; OEM dealer sign-ups (Toyota/Lexus)	Ongoing strength; parts a faster growth contributor	Structural share gains
Payments	Revenue exists but slower adoption; higher complexity and use-case buildouts	Continued work; slower than Subrogation/Estimate-STP; update expected later in year	Gradual build
Macro/labor	Inflation shock in 2022 moderating; secular labor retirements driving digital adoption	Complexity and labor shortages cited as drivers for AI-enabled transformation	Digital shift accelerating

Management Commentary

“CCC delivered strong first quarter results, highlighted by 11% year-over-year revenue growth and 41% adjusted EBITDA margin – both above our guidance ranges.” — CEO G. Ramamurthy .
“The CCC Intelligent Experience (IX) Cloud… will make it faster and easier for customers to deploy new CCC solutions… Customers do not need to upgrade as a CCC IX cloud represents an enhancement to the existing CCC cloud platform. It just gets better.” — CEO .
“Approximately 8 points of our growth in Q1 was driven by cross-sell, upsell… roughly 3 points from new logos… about 1 point from emerging solutions.” — CFO B. Herb .
“We ended the quarter with $191 million in cash… $782 million of debt… net leverage was 1.6x adjusted EBITDA… trailing 12-month free cash flow margin in Q1 2024 was 24%.” — CFO .
“We expect the upsell, cross-sell of these new solutions will contribute about 2 points of growth in 2024… step-up in the second half.” — CFO .

Q&A Highlights

Emerging solutions visibility: CFO outlined three drivers (volume ramp at existing customers, test-to-pay conversions, pipeline wins) underpinning the step-up to ~2 pts growth in 2024 .
Cloud transition costs: Hosting costs increased during legacy environment wind-down; margins still progressed YoY by ~240 bps; decommissioning to moderate over time .
Stock-based compensation: Elevated in Q1; expected to decline through 2024 and normalize to ~12–14% of revenue in 2025 .
New top-20 APD insurer rollout: Began in Q1; expected partial contribution in Q2 and full revenue contribution in the second half .
Seasonality and margins: Management reiterated second-half margins > first-half; Q2 likely margin low point due to expense resets and conference costs .

Estimates Context

S&P Global consensus for Q1 2024 EPS and revenue was unavailable at time of analysis due to data access limits; therefore, a beat/miss vs Wall Street consensus cannot be confirmed.*
Company-reported performance exceeded its own guidance ranges for revenue and adjusted EBITDA, indicating operational outperformance vs management expectations .

*Values are typically retrieved from S&P Global but were unavailable.

Key Takeaways for Investors

Durable growth algorithm intact: High GDR/NDR, multi-sided network, and increasing AI-led cross-sell drive consistent mid-to-high single-digit organic growth; FY 2024 guidance midpoints modestly raised .
AI adoption inflection: Estimate-STP, Subrogation, and Impact Dynamics are gaining traction; management guides emerging solutions contribution from ~1 pt in Q1 to ~2 pts for the year, with second-half acceleration .
Platform advantage: IX Cloud overlay should improve deployment velocity and multi-solution integration without disruptive upgrades, reinforcing switching costs and upsell potential .
Watch near-term margin seasonality: Expect Q2 margin dip due to expense resets and conference costs; second-half margins historically stronger .
Cash generation supports flexibility: Strong FCF and modest net leverage (~1.6x) provide capacity to invest in R&D, customer-facing functions, and selective M&A (domestic product expansion prioritized) .
Payments optionality longer-dated: Revenue exists but adoption is slower given complexity; prioritize AI solutions for nearer-term growth contributions .
Stock liquidity improved: Public float increased to ~60%, aiding potential investor participation and trading dynamics .

CCC Intelligent Solutions Holdings Inc. (CCCS)·Q1 2024 Earnings Summary