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CCC Intelligent Solutions Holdings Inc. (CCCS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue $246.5M grew 8% YoY and landed at the high end of guidance; adjusted EBITDA was $106.3M and came in ahead of guidance, with margin at 43% .
  • GAAP net income declined to $6.3M vs. $26.3M a year ago, largely reflecting a prior-year benefit from warrant revaluation; adjusted net income rose to $64.5M from $59.0M .
  • Management issued FY25 guidance of $1.055B–$1.065B revenue and $417M–$427M adjusted EBITDA (40% margin midpoint); Q1’25 revenue $249.0M–$250.5M and adjusted EBITDA $92.5M–$94.0M .
  • Strategic updates: closed EvolutionIQ acquisition (Jan 6) to expand into disability/workers’ comp and enhance AI/medical summarization; Board authorized a $300M share repurchase program .
  • Estimate comparisons: S&P Global consensus was unavailable at retrieval; we cannot quantify beat/miss vs Street this quarter.

What Went Well and What Went Wrong

What Went Well

  • Strong execution: Revenue +8% YoY to $246.5M; adjusted EBITDA $106.3M, margin 43%, at/high-end of guidance and ahead on EBITDA; FY24 revenue +9% to $944.8M and adjusted EBITDA +12% to $397.4M .
  • Network & customer momentum: Renewed a top-20 auto insurer for five years; Estimate‑STP now live at 40+ insurers; Subrogation live at 20+ insurers; repair facility base grew to 30,500+ with >1,000 new rooftops in 2024 .
  • AI traction with measurable ROI: Insurer saw 30% lift in early total loss IDs and 3–7 day cycle-time reductions; parts returns for Build Sheets users down 25% by quantity and >50% by dollar value; thousands of shops adopted Build Sheets within months .

What Went Wrong

  • GAAP optics: Net income fell to $6.3M from $26.3M YoY due to lack of prior-year fair value tailwinds (warrants); diluted EPS was $0.01 vs $(0.01) YoY as methodology effects impacted comparability .
  • Margin mix: Adjusted gross margin slipped to 76% from 79% YoY, driven by higher depreciation from capitalized projects and faster growth in lower‑margin casualty solutions .
  • Volume/headwinds & adoption pacing: 2024 total claims volumes ended ~5% lower (Q4 moderated to -3%); emerging solutions remained ~3% of run-rate revenue and ~1 point contribution to growth as pilots and change management extended conversion timelines .

Financial Results

Headline P&L and Profitability

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($M)$228.601 $232.618 $238.481 $246.464
GAAP Net Income ($M)$26.292 $21.445 $4.132 $6.260
GAAP Diluted EPS ($)$(0.01) $0.03 $0.00 $0.01
Adjusted EBITDA ($M)$100.053 $95.797 $101.554 $106.309
Adjusted EBITDA Margin (%)44% 41% 43% 43%
Adjusted Net Income ($M)$58.992 $56.186 $62.580 $64.514
Adjusted Diluted EPS ($)$0.09 $0.09 $0.10 $0.10
GAAP Operating Income ($M)$19.361 $22.513 $28.688 $21.108
Adjusted Operating Income ($M)$90.647 $85.983 $91.195 $92.906
Adjusted Gross Margin (%)79% 78% 78% 76%

Notes: YoY revenue up 8% and adjusted EBITDA up 6% in Q4; GAAP net income down YoY due to prior-year fair value gains on warrants not repeating .

Cash, Debt, and Free Cash Flow

MetricQ2 2024Q3 2024Q4 2024
Cash & Equivalents ($M)$237.893 $286.303 $398.983
Total Debt ($M)$780.0 $778.0 $776.0
Free Cash Flow ($M, quarterly)$36.213 $49.383 $105.706

KPIs and Commercial Metrics

KPIQ2 2024Q3 2024Q4 2024
Software Gross Dollar Retention (GDR)99% 99% 99%
Software Net Dollar Retention (NDR)107% 106% 105%
Claims Volume Trend (YoY)—~-6% YTD through Sep ~-3% in Q4; -5% FY24
Emerging Solutions Revenue Mix—~3% run-rate ~3% run-rate

Segment breakdown: CCC does not report segment revenues in earnings materials; results are presented on a consolidated basis .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q1 2025—$249.0–$250.5 New
Adjusted EBITDA ($M)Q1 2025—$92.5–$94.0 New
Revenue ($B)FY 2025—$1.055–$1.065 New
Adjusted EBITDA ($M)FY 2025—$417–$427 (≈40% margin midpoint) New
QualitativeFY 2025—EIQ adds $45–$50M revenue; ~200 bps EBITDA margin dilution; ex‑EIQ margin +~75 bps YoY New

Management also noted EvolutionIQ closed Jan 6; total debt rose to ~$1.0B post‑close; net leverage ~2x; SBC expected ~15% of revenue in 2025 (incl. ~3 pts from EIQ) before declining in 2026 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3’24)Current Period (Q4’24)Trend
AI/Technology initiatives300+ AI models; Estimate‑STP in 30+ insurers; IX Cloud as event-driven “distribution system” for AI workflows .Tangible ROI: 30% lift in early total loss IDs; 3–7 days faster cycle; AI in production at 100+ insurers and 10k+ shops .Accelerating adoption and ROI.
Emerging solutions adoptionPilots robust but slower revenue conversion; ~1 pt growth contribution; Build Sheets launched; 2k+ shops in 3 months .Run-rate ~3% of revenue; ~1 pt growth; actions to accelerate via packaging, change management, IX Cloud .Building, still pacing slower than hoped.
Claims volumes/macroYTD claims down ~6% through Sep; ~1 pt growth headwind .Moderated to ~-3% in Q4; ended FY24 at ~-5%; 2025 guide assumes no volume tailwind/drag .Modest improvement; cautious planning.
Packaging/PricingInsurance packaging introduced; pricing a consideration but not a material growth driver .More holistic insurance packages; pricing embedded in NDR; growth mainly from new solutions .Execution focus over price.
EvolutionIQ (EIQ)Announced Dec 20: $730M deal; strategic adjacency .Integration underway; FY25 rev +$45–$50M; MedHub medical summarization synergy with Casualty; initial EBITDA dilution .New growth vector; near‑term margin dilution.
Gross margin dynamicsTarget 80% long-term; Q3 adj GP margin 78% .Q4 adj GP margin 76% on higher depreciation and mix (Casualty) .Near‑term pressure; long‑term 80% reiterated.

Management Commentary

  • “Adjusted EBITDA for the fourth quarter was $106 million, ahead of our guidance range… Adjusted EBITDA margin was 43%.” – CEO .
  • “Estimate‑STP… paid volume… is still just 4% of our annual claims overall, [but] a top 10 insurer was on track to process 20% of their repairable claims… We are helping other carriers set similar goals.” – CEO .
  • “In Q4 2024, our GDR was 99%… our NDR was 105%.” – CFO .
  • “Adjusted gross profit margin… down from 79% in Q4 2023… increase in depreciation… and mix.” – CFO .
  • “We expect EvolutionIQ to contribute $45–$50 million in 2025… adjusted EBITDA margin… ~40% including EvolutionIQ… excluding EvolutionIQ up ~75 bps.” – CFO .

Q&A Highlights

  • Organic growth pacing: Management guided base business growth toward lower end of long‑term 7–10% range in 2025; EvolutionIQ scales through the year to reach ~5 pts of full‑year growth contribution .
  • Claims volumes outlook: Q4 moderated to ~-3%; FY24 ~-5%. 2025 assumes no claim frequency tailwind or drag; January weather noise too early to extrapolate .
  • Pricing/packaging: Pricing embedded in NDR and not a material growth driver; new insurance packages aim to increase cross‑product synergies and streamline rollouts .
  • Gross margins and EIQ impact: Long‑term gross margin target ~80%; EIQ has similar gross margin profile; 2025 EBITDA margin diluted ~200 bps by EIQ with improvement thereafter .
  • Interest expense modeling: Post‑EIQ debt ~$1.0B; 4% cap on $600M plus ~200–225 bps spread; use that framework for 2025 .

Estimates Context

  • We attempted to retrieve S&P Global consensus (revenue and EPS) for Q4 2024 but were unable to do so due to a data access limit at retrieval time. As a result, we cannot provide objective beat/miss versus Street for Q4 2024 or quantify dispersion.
  • Company‑provided context: Q4 revenue was at the high end of guidance and adjusted EBITDA ahead of guidance; FY25 guidance embeds EvolutionIQ revenue and initial margin dilution .

Key Takeaways for Investors

  • Quality of print: Solid top‑line (+8% YoY) with adjusted EBITDA ahead of guidance and strong quarterly FCF ($105.7M), despite transitory mix pressure on gross margin .
  • 2025 setup: New FY25 revenue guide +12% YoY (midpoint) with EIQ adding $45–$50M and margin at ~40% including EIQ; ex‑EIQ EBITDA margin expansion continues, with dilution reversing beyond 2025 .
  • Adoption flywheel: Packaging, IX Cloud, and enhanced change‑management (including EIQ playbook) aim to accelerate emerging solutions’ revenue velocity from ~1 point contribution toward a higher run‑rate over time .
  • Volume exposure bounded: Only ~20% of revenue has transactional components; planning assumes no claim frequency tailwinds/drag in 2025, de‑risking near‑term macro variability .
  • Strategic optionality: EIQ expands TAM into disability/workers’ comp and augments CCC Casualty via MedHub; expect cross‑sell as integrations mature (revenue synergy not yet in FY25 guide) .
  • Capital allocation: New $300M repurchase authorization and robust FCF provide support while investing in AI product cycle .
  • Trading lens: Near‑term stock reactions likely hinge on confidence in emerging solutions inflection, cadence of EIQ integration, and visibility on margin trajectory across 2025–2026; monitor GDR/NDR stability and quarterly FCF as corroborating signals .

Appendix: Other Relevant Q4 Items

  • EvolutionIQ acquisition announced Dec 20, 2024; closed Jan 6, 2025; consideration ~$730M (≈60% cash/40% stock); Board also approved $300M share repurchase authorization .
  • Additional operating highlights: 30,500+ repair facilities on CCC ONE; >10,000 repairers using AI in production .

SOURCES: Q4’24 press release and financial statements ; Q4’24 8‑K (incl. exhibit) ; Q4’24 earnings call transcript (management remarks and Q&A) ; Q3’24 press/8‑K ; Q2’24 press/8‑K ; EvolutionIQ acquisition press release .