Executive Summary

Q1 2025 topped Street on revenue and adjusted EPS: revenue $593.7M vs $570.4M consensus* and adjusted EPS $0.14 vs $0.116 consensus*, with organic revenue returning to modest growth (+0.3% YoY) and adjusted EBITDA margin up 130 bps YoY to 39.3% .
Management reaffirmed full-year 2025 outlook (revenue $2.28B–$2.40B, adjusted EBITDA $940M–$1.00B, adjusted EPS $0.60–$0.70, FCF $300M–$380M), unchanged from February, signaling confidence despite ongoing portfolio rationalization .
Mix continues to improve as subscription-first transition progresses: recurring organic revenue +0.6% and re-occurring organic revenue +5.3% (IP patent annuities led); transactional organic revenue declined 2.3% as planned disposals and wind-downs continue .
Stock catalysts: strategic alternatives review remains active, AI product cadence accelerating (agentic AI in Academia, Derwent AI upgrades, EndNote 2025) and marquee customer wins (British Library, Brazil’s CAPES) support narrative of improving durability and innovation .

What Went Well and What Went Wrong

What Went Well
- “We delivered improved sequential organic ACV growth in the first quarter from higher renewals and new business wins,” underscoring progress on the Value Creation Plan and subscription-first strategy .
- IP re-occurring revenue returned to growth: “we saw mid-single-digit growth… primarily… patent and trademark renewals… positive signs there on the IP renewal business” .
- Commercial momentum: multiyear British Library SaaS win (Alma/Primo) and a large CAPES renewal/expansion across segments validate cross-sell and enterprise value, with A&G renewal rate in mid-90s and LS&H renewals at 90% (+3 pts YoY) .
What Went Wrong
- GAAP loss widened YoY to $(103.9)M (diluted EPS $(0.15)), driven by higher restructuring tied to the Value Creation Plan; CFO flagged restructuring as primary driver of GAAP EPS reduction .
- Subscription revenue down YoY on divestiture effects and organic −0.6%; transactional revenue declined 14.2% YoY (organic −2.3%) as wind-downs proceed, weighing on reported top line despite organic recurring growth .
- Macro/Policy watch: management completed a U.S. federal funding exposure analysis; risk deemed contained within guidance, but A&G budgets remain a monitored headwind .

Financial Results

Quarterly performance and trajectory

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$622.2	$663.0	$593.7
Adjusted Diluted EPS ($)	$0.19	$0.21	$0.14
Adjusted EBITDA ($M)	$264.4	$285.3	$233.2
Adjusted EBITDA Margin (%)	42.5%	43.0%	39.3%
Organic Revenue Growth YoY (%)	(2.6)%	(0.7)%	0.3%

Q1 2025 vs S&P Global consensus

Metric	Consensus	Actual	Beat/Miss
Revenue ($M)	570.4*	593.7	Bold beat
Adjusted/Primary EPS ($)	0.116*	0.14	Bold beat
EBITDA ($M, SPGI def.)	213.5*	216.3*	Beat (SPGI EBITDA); note company Adjusted EBITDA $233.2

Values retrieved from S&P Global*

Segment performance

Segment Revenue ($M)	Q1 2024	Q1 2025	Notes (YoY drivers/organic)
Academia & Government	$317.7	$302.7	Organic +0.7%; decline largely disposals/FX
Intellectual Property	$200.9	$192.7	Organic +1.3%; re-occurring up on patent renewals
Life Sciences & Healthcare	$102.6	$98.3	Organic (3.0)%; some disposal/FX impacts

KPIs and cash flow (Q1 2025)

KPI	Q1 2025
Organic ACV growth YoY (%)	1.2%
Recurring organic revenue growth (%)	0.6%
Re-occurring organic revenue growth (%)	5.3%
Transactional organic revenue growth (%)	(2.3)%
Recurring revenue mix (%)	83%
Renewal rate	94% (+1 pt YoY)
Operating Cash Flow ($M)	$171.2
Free Cash Flow ($M)	$110.3
Free Cash Flow Conversion (%)	47.3%
Share repurchases	$50M; 11.7M shares @ $4.29 avg

Why results differed: Revenue outperformance vs consensus was supported by recurring organic growth (+0.6%) and stronger IP annuity volumes (re-occurring +5.3%), partly offset by FX translation and divestiture/disposal headwinds; adjusted margin expansion YoY reflected cost discipline and VCP actions, while GAAP loss was impacted by restructuring and amortization .

Guidance Changes

Metric	Period	Previous Guidance (Feb 19, 2025)	Current Guidance (Apr 29, 2025)	Change
Organic ACV	FY 2025	1.0%–2.0%	1.0%–2.0%	Maintained
Recurring Organic Revenue Growth	FY 2025	(1.0)%–1.0%	(1.0)%–1.0%	Maintained
Revenue ($B)	FY 2025	$2.28–$2.40	$2.28–$2.40	Maintained
Adjusted EBITDA ($M)	FY 2025	$940–$1,000	$940–$1,000	Maintained
Adjusted EBITDA Margin (%)	FY 2025	40.5%–42.5%	40.5%–42.5%	Maintained
Adjusted Diluted EPS ($)	FY 2025	$0.60–$0.70	$0.60–$0.70	Maintained
Free Cash Flow ($M)	FY 2025	$300–$380	$300–$380	Maintained

Management reiterated recurring mix to improve ~5 pts in 2025 as transactional disposals roll off, with margin/FCF conversion maintained via cost actions .

Earnings Call Themes & Trends

Topic	Q3 2024 (Prev-2)	Q4 2024 (Prev-1)	Q1 2025 (Current)	Trend
Guidance posture	Removed 2024 outlook amid VCP reset	Introduced FY25 outlook	Reaffirmed FY25 outlook	Improving
Subscription-first mix	Over-dependence on transactional highlighted	Plan to discontinue low-margin transactional by ’25–’26	Recurring mix 83%, +200 bps YoY	Improving
IP renewals/volumes	Weakness in re-occurring	Modest caution; divestiture impacts	Re-occurring organic +5.3% on patent volumes	Improving
A&G funding risk	Noted macro budget pressures	—	Risk “contained within guidance”; renewals strong mid-90s	Stable/Cautious
AI/product cadence	Early AI features; reset planned	AI launches across segments; VCP milestones	Agentic AI to roll out; Cortellis/Derwent AI enhancements; EndNote 2025	Accelerating
Strategic alternatives	—	Review initiated, advisors retained	Ongoing; no specifics yet	Ongoing

Management Commentary

Strategy and execution: “Clarivate’s offerings are mission-critical… enabling us to successfully transition to a subscription-first strategy, improve renewal rates, and drive higher usage… Our Value Creation Plan is on track” .
Growth drivers: “Organic ACV grew sequentially… recurring organic revenue grew nearly 1%… renewal rates… improved… adjusted EBITDA margin increased more than a percentage point” .
Margin/FCF discipline: “We accelerated our profit margins by more than 1 percentage point… careful operating expense management… Free cash flow was $110 million… conversion of 47%” .
AI/innovation pipeline: “We will be incorporating Agentic AI… in Web of Science for literature review… release enhanced AI-powered search in Cortellis… AI-powered patent search in Derwent” .

Q&A Highlights

A&G U.S. funding exposure: Mgmt conducted a layered direct/indirect risk analysis; with many government contracts already renewed, any potential impact is reflected within the guidance range .
Strategic alternatives: No comment on reported PE interest in IP; the review is active with advisors, updates when appropriate .
IP annuity volumes: Rebound primarily volume-driven with minor timing help; durable long-term trends but quarterly variability possible .
Transactional revenue: Expected to remain soft; focus remains on accelerating ACV and recurring growth while deemphasizing transactional .
Sales incentives: Leadership upgrades, expanded customer success, and incentive rebalancing toward recurring growth and retention are tracking positively .

Estimates Context

Q1 2025 results vs S&P Global consensus: Revenue $593.7M vs $570.4M*, Primary/Adjusted EPS $0.14 vs $0.116*; both beats. SPGI EBITDA consensus $213.5M* vs SPGI actual $216.3*, while company-reported Adjusted EBITDA was $233.2M (different definition) .
Estimate depth: 9 EPS estimates*, 7 revenue estimates* for the quarter.
Implications: Beats plus reaffirmed FY25 guide support modest upward bias to near-term revenue/EPS models, with mix and cost actions offsetting transactional declines. Values retrieved from S&P Global*

Key Takeaways for Investors

Revenue and adjusted EPS beats with organic revenue back to growth; margin up 130 bps YoY—evidence the subscription-first and VCP cost actions are gaining traction .
Re-occurring (IP annuities) strength is a tangible green shoot; monitor sustainability as macro cycles through .
2025 outlook reaffirmed despite portfolio changes—predictability should improve as transactional disposals run off; recurring mix targeted higher .
AI/product momentum (agentic AI, Derwent/Cortellis, EndNote 2025) and marquee wins (British Library, CAPES) bolster competitive positioning and cross-sell .
Capital allocation balanced: $50M buyback in Q1, with flexibility to repurchase or delever alongside FCF conversion targets .
Watch list: execution on ACV/renewals, cadence of transactional roll-off, FX translation volatility, and any outcomes from strategic alternatives process .

Citations:

Q1 2025 8-K/press release and supplemental:
Q1 2025 earnings call transcript (remarks and Q&A):
Q4 2024 8-K/press release:
Q3 2024 press release:
Product/prioritized press releases: Academic AI Platform expansion ; EndNote 2025 ; DRG Commercial Analytics 360 .