Executive Summary

CLVT delivered a solid Q3: revenues were $623.1M (+0.1% YoY), adjusted EBITDA $252.4M with a 40.5% margin, and adjusted diluted EPS $0.18; GAAP diluted EPS improved to -$0.04 from -$0.09 YoY .
The quarter featured a clear beat vs Wall Street: revenue and adjusted EPS exceeded S&P Global consensus, while EBITDA (SPGI definition) modestly missed; management raised full-year revenue guidance to $2.42B–$2.45B, the only guidance metric changed this quarter .
Organic ACV accelerated to 1.6% (+30 bps seq.), renewal rate reached 93% (+100 bps YoY), and recurring organic revenue mix improved to 88% YTD; management highlighted AI-led product innovation and improved sales execution under the Value Creation Plan .
Capital allocation remained active: CLVT repurchased 11.7M shares (~$50M) and called $100M of 2026 bonds in Q3; net leverage ~4x and swaps extended to 2030, providing interest rate protection .
Stock reaction catalysts: raised revenue guidance, sequential ACV acceleration, and visible AI product momentum (e.g., Innography AI Classifier and SEP Analyzer) and IPfolio customer wins (Winbond, FUJIFILM) supporting segment narratives .

What Went Well and What Went Wrong

What Went Well

Organic ACV acceleration and mix improvement: ACV +1.6% YoY and recurring organic revenue mix improved to 88% YTD; CEO emphasized “accelerating product and AI development… driving organic ACV growth” .
Guidance raised: full-year revenue outlook increased to $2.42B–$2.45B on stronger transactional book sales ahead of disposal and FX tailwind; CFO: “The full year 2025 revenue outlook was revised upward…” .
Capital returns and balance sheet actions: 11.7M shares repurchased in Q3, $100M debt repayment, extended $500M swaps to 2030; net leverage ~4x maintained .
Segment wins and AI product momentum: major A&G renewals (largest US consortium) and AI enhancements across IP (Derwent Patent Monitor) and LS&H (Cortellis Regulatory Assistant); multiple customer contracts secured .

What Went Wrong

Margin compression: adjusted EBITDA margin declined to 40.5% (from 42.5% YoY) due to continued investment and higher incentive compensation expense; adjusted EBITDA down to $252.4M from $264.4M YoY .
Transactional and re-occurring headwinds organically: organic re-occurring -3.2% and transactional -2.8% on IP volumes and A&G wind-down; overall organic revenue -0.1% in Q3 .
LS&H segment softness YoY in Q3: LS&H revenues declined to $92.8M (from $101.1M), reflecting disposals and minor organic decline; IP segment also modestly down YoY .

Financial Results

Quarterly performance vs prior quarters and YoY

Metric	Q1 2025	Q2 2025	Q3 2025
Revenues ($USD Millions)	$593.7	$621.4	$623.1
GAAP Diluted EPS ($)	-$0.15	-$0.11	-$0.04
Adjusted Diluted EPS ($)	$0.14	$0.18	$0.18
Adjusted EBITDA ($USD Millions)	$233.2	$261.6	$252.4
Adjusted EBITDA Margin (%)	39.3%	42.1%	40.5%
Net Income Margin (%)	-17.5%	-11.6%	-4.5%

Metric	Q3 2024	Q3 2025
Revenues ($USD Millions)	$622.2	$623.1
GAAP Diluted EPS ($)	-$0.09	-$0.04
Adjusted Diluted EPS ($)	$0.19	$0.18
Adjusted EBITDA ($USD Millions)	$264.4	$252.4
Adjusted EBITDA Margin (%)	42.5%	40.5%

Revenue mix and segment detail

Revenue Type ($USD Millions)	Q3 2024	Q3 2025	YoY Change
Subscription	$411.1	$405.4	-$5.7 (-1.4%)
Re-occurring	$106.7	$105.3	-$1.4 (-1.3%)
Transactional	$104.4	$112.4	+$8.0 (+7.7%)
Total Revenues	$622.2	$623.1	+$0.9 (+0.1%)

Segment Revenues ($USD Millions)	Q3 2024	Q3 2025	YoY Change
Academia & Government (A&G)	$321.3	$332.5	+$11.2 (+3.5%)
Intellectual Property (IP)	$199.8	$197.8	-$2.0 (-1.0%)
Life Sciences & Healthcare (LS&H)	$101.1	$92.8	-$8.3 (-8.2%)
Total Revenues	$622.2	$623.1	+$0.9 (+0.1%)

KPIs and cash flow

KPI	Q1 2025	Q2 2025	Q3 2025
Organic ACV Growth (%)	1.2%	1.3%	1.6%
Renewal Rate (%)	—	—	93%
Recurring Organic Revenue Mix (YTD) (%)	—	88%	88%
Operating Cash Flow ($USD Millions)	$171.2	$116.3	$181.1
Free Cash Flow ($USD Millions)	$110.3	$50.3	$115.5
Share Repurchases (Quarter)	$50.0M	$99.5M	~$50.0M (11.7M shares)
Debt Outstanding (Period-End) ($USD Millions)	$4,570.8	$4,570.5	$4,470.2

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenues	FY 2025	$2.28B–$2.40B	$2.42B–$2.45B	Raised
Organic ACV	FY 2025	1.0%–2.0%	No change	Maintained
Recurring Organic Revenue Growth	FY 2025	(1.0)%–1.0%	No change	Maintained
Adjusted EBITDA	FY 2025	$940M–$1,000M	No change	Maintained
Adjusted EBITDA Margin	FY 2025	40.5%–42.5%	No change	Maintained
Adjusted Diluted EPS	FY 2025	$0.60–$0.70	No change	Maintained
Free Cash Flow	FY 2025	$300M–$380M	No change	Maintained

Management also indicated Q4 revenue “about $600M” and adjusted EBITDA “approach $250M,” framing FY revenue/EBITDA drivers (disposals timing, FX, organic recurring) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/Technology Initiatives	Q1: Transition to subscription-first, early ACV uplift; reaffirmed 2025 outlook . Q2: Continued ACV acceleration; AI tailwinds in IP; DRG, Cortellis releases .	Intensified AI rollouts: Derwent Patent Monitor AI threat rating; Innography enhancements; Cortellis Regulatory Assistant; Web of Science AI agent pilots .	Accelerating
Sales Execution & VCP	Q1: Improved renewal and usage; VCP on track . Q2: Sales model enhancements; customer success scaling .	CEO: VCP driving “focus, growth and innovation”; improved engagement/retention; >100 A&G subscription content contracts YTD .	Improving
Disposals & Mix Shift	Q1/Q2: A&G transactional wind-down weighing transactional revenues .	Q3: Multiple large eBook transactions lifted disposals temporarily; revenue guidance raised; disposals shift ~$90M in 2025 and >$100M in 2026; recurring mix toward lower end due to slower attrition .	Transitional; disposal timing stretched
IP Renewal Trends	Q2: Re-occurring organic decline (-2.3%) from timing; improvement 1H .	CFO: IP patent/trademark renewals flat YTD vs -3% last year; competitive positioning and market recovery expected to lift volumes; AI innovation upswing as a tailwind .	Stabilizing; potential upswing
Strategic Alternatives	Q2: Review underway; expect more detail with FY results .	Q3: Narrowed scope; expect to disclose at year-end earnings in Feb 2026 .	Progressing
FX/Macro	Q2: Weaker USD aiding translation and transaction gains .	Q3: FX tailwind remains; raised FY revenue mid-point partly on weaker USD .	Tailwind persists

Management Commentary

CEO (prepared remarks): “By accelerating product and AI development, investing in proprietary assets, and collaborating closely with our customers… driving organic ACV growth” .
CFO (prepared remarks): “The full year 2025 revenue outlook was revised upward, reflecting increased transactional book sales… and the favorable impact of a weaker U.S. dollar” .
CFO (guidance detail): “Recurring organic growth in the upper half… adjusted EBITDA ~high end of range; diluted adjusted EPS and FCF near midpoints” .
CFO (disposals timing): “Without [Q3 eBook deals], disposals would be down >$20M… ~$90M decline in 2025 and a little over $100M next year will go away” .
CEO (IP strategy): “We are… introducing changes into our IP segment with renewed sales structure and upcoming new products… confident we will turn IP into a growing segment” .

Q&A Highlights

IP renewal business trajectory: Recurring renewal services flat YTD vs -3% FY24; improving competitive position (workflow software investment) and market recovery expected to drive growth in 2026 .
AI product roadmap: Dual track of AI-enablement of existing products and AI-native launches (e.g., RiskMark, Web of Science Research Intelligence agent); ~20 early contracts ahead of formal launch .
Disposals and guide dynamics: Q3 benefitted from large low-margin eBook transactions; disposals attrition slower than expected, lifting FY revenue; timing suggests more revenue roll-off in 2026 .
IP market underlying trends: Patents-in-force rising, AI innovation cycle seen as multi-year lift to volumes; near-term lumpiness by region/customer .
Content vs workflow: Majority of AI innovation applied to information services (Web of Science, Derwent); substantial proprietary/enriched datasets underpin differentiation .

Estimates Context

Metric	Consensus*	Actual	Surprise
Revenue ($USD Millions)	570.4*	623.1	+52.7; +9.2% — bold beat
Primary EPS ($)	0.156*	0.18	+0.024; +15.4% — bold beat
EBITDA ($USD Millions) (SPGI definition)	239.2*	236.5*	-2.7; -1.1% — slight miss

Values retrieved from S&P Global.
Note: Company-reported adjusted EBITDA was $252.4M (40.5% margin), which differs in definition from SPGI “EBITDA” .

Key Takeaways for Investors

Raised FY revenue guidance amid slower disposal attrition and FX tailwind; expect adjusted EBITDA towards the high end, with EPS/FCF near midpoints — supportive to near-term sentiment .
Sequential ACV acceleration and 93% renewal rate signal strengthening core; focus on subscription mix (88% YTD) improves predictability .
AI-led product cadence across segments (Derwent, Innography, Cortellis, Web of Science) is a strategic differentiator, likely to aid retention and upsell into 2026 .
Watch disposal timing: Q3 revenue benefitted from one-off eBook deals; expect lower Q4 revenue vs prior year and further disposal roll-off in 2026 — monitor mix and margin conversion .
IP renewal services stabilizing; macro innovation cycle (AI) may lift volumes in outer years — monitor competitive wins and software attach .
Capital allocation remains shareholder-friendly (buybacks, debt reduction, interest-rate hedges) while holding leverage ~4x — balanced optionality into Q4 .
Strategic alternatives review progressing with narrowed scope; potential portfolio action could re-rate, with updates expected at FY results (Feb 2026) .

CLARIVATE PLC (CLVT)·Q3 2025 Earnings Summary